Tax

He singled out two ideas for new wealth taxes to The Telegraph on Wednesday. The first is a 2 per cent tax on assets of more than £10 million, which is an idea being pushed by the Patriotic Millionaires UK campaign group, and the second is increasing capital gains tax in line with income tax.

“It is the broadest shoulders argument. ‘Distributed to each according to his need.’ That’s not Marx, it’s the Bible,” Mr McDonald said.

“I’ve made the case for the last six months for wealth taxes. I’ll continue to do so in the next six months because it’s right.”

Both such taxes would be above the peak of the Laffer Curve. They’d raise less income, not more…..

A Treasury spokesman said: “The UK remains highly attractive.

“Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is simpler and more attractive than the previous one, whilst it also addresses tax system unfairness so every long-term resident pays their taxes here.”

Fairness is rather in the hands of the person who has to hand over the cheque. Or at least, one of the relevant views of fairness is in those hands. And they’re leaving.

Mr Bessent said the G7 had agreed not to impose what is known as OECD Pillar 2 on US companies. That refers to a 15pc minimum corporate tax rate, which was agreed in principle by 140 countries to be imposed on companies with global revenues of more than €750m (£639m).

Doesn’t that just piss on the tax campaigners’ chips.

Decades of Spud insisting that business must be taxed where the money is made. Which he insisted is where the sales/people are.

But that’s not where value is added. Apple, for example. Some chunk of the value is the brand. Some other chunk is the software, the design etc. All of which are created in Cupertino. So, Cupertino is where theose should be taxed – by Spud’s own valuation. Which is, of course, the old tax system and now again the new one.

But Spud will bitch all the same.

Glastonbury founder could avoid £80m in inheritance tax
The festival could be worth £400m and Sir Michael Eavis, its founder, has moved most of his financial interest to his daughter and a family trust

But, but, it’s charitable!

Financial experts suggested that Eavis may have decided to transfer the assets after tax advisers told him that HM Revenue & Customs would not accept a valuation of his companies for IHT purposes based upon the festival having some “quasi-charitable position”. While Glastonbury operates with a strong charitable ethos — last year it gave more than £5.9 million to good causes — it remains a private company and is not a charity, so HMRC is likely to value it as such when considering an IHT bill.

Yes, but being able to distribute £9.5 million a year to your favourite causes is wealth. So, it should be taxed as wealth, right?

The fiscal watchdog assumed that 12pc of non-doms without trusts and 25pc with trusts would go. However, the OBR warned that predicting behavioural responses was difficult.

“How many?” is the important question about an awful lot of economic ideas. We can theorise about who will do what as a result of this or that change. But we only actually find out when we see how many do, in fact, do that.

This is the very base of that Laffer Curve of course. The substitution effects says some will, at some tax rate, say bugger it I’m off fishing. And the income effect means some will work more at a higher tax rate in order to make their nut before they go off fishing. The overall effect on tax collection of a higher rate is the combination of how many do each.

Empirically – counting the actual numbers – we tend to find that the reaction of the lower paid, especially pieceworkers, is domainated by the income effect. That of the richer by substitution. Which is, of course, darkly amusing. For it means that at proper high tax rates we end up shifting the tax burden from the highly paid to the lower. Because that’s how the reactions to the higher taxes change behaviour.

Most socialist and equitable, eh?

But in large part this boils down to the US’s low-tax, low-regulation environment, which has helped keep wages there above those of the rest of the West for more than a century.

Tax in Britain levied on income, property and all purchases, are forecast to hit a historical high of 37.7pc of GDP in 2027 to 2028. The equivalent US rate is expected to come in at less than half, at 17.8pc.

Low taxes might well increase growth. And thereby wages. But low taxes on wages themselves won’t create higher wages.

Also, they’ve just measured the US tax burden as the Federal one. There’s another 8 or 9% of GDP levied by states, counties and so on….

Tsk.

Labour politicians told us again and again during the election campaign that closing the non-dom rule that allows wealthy foreigners to be taxed only on their UK instead of their global income, would bring in billions in extra revenue to be spent on public services. They dismissed warnings that they would simply leave as “fear-mongering”. It turns out they were wrong. There were already anecdotal reports of hundreds making an exit. It has now emerged that one of the wealthiest non-doms in the country, Lakshmi Mittal, is planning to get out.

As I’ve pointed out elsewhere this morning.

So, we change the social contract. Those with the ability to accept or decline that change get to accept or decline that change. Some will decline it.

And there we are.

After all, each cut inflicts more pain than the last, hacking away at a public realm and social expenditure already shrunken by the previous round of slashing.

What cuts? We’re still spending more than we were in 2008 as a portion of everything. Taxes are up, spending is up, in real, nominal and %ge of GDP terms.

Yet this week, our supposedly Labour chancellor, Rachel Reeves, will take a scalpel to departmental budgets already devastated by 15 years of austerity.

What austerity?

But I do think he really believes this shite:

Back in 2020, a team of accountants, economists and lawyers set up a Wealth Tax Commission. They weren’t messing about: one of its main architects specialised in helping private clients navigate the British tax system, and therefore knew its loopholes inside out.

Their proposal: a one-off wealth tax on millionaire couples for five years would raise £260bn.

Ah, yes, that was Arun Advani’s idea for flat out theft. Unlikely to work really….

Spain will struggle to match Nato defence spending targets because of political divisions and the weak position of the country’s Left-wing government.

But there is another factor that is making it difficult for the country to spend 2 per cent of its GDP on its military: its booming economy.

Pedro Sánchez, Spain’s prime minister, is meeting the heads of other parties on Thursday to seek support for his objective of accelerating the 2 per cent target in response to the call from Ursula von der Leyen, the European Commission president, for an €800 billion spending rise across the EU to face the threat of Vladimir Putin’s Russia.

Spain’s buoyant economy, with GDP growing by 3.2 per cent in 2024, only makes the target harder to reach. Countries such as Germany and France are barely registering economic growth, meaning such GDP-based spending objectives are static and not such a moving target.

No, it works the other way around. Tac revenues are leveraged towards growth.

Say – just an example – you get 40% of GDP in taxes. If you get 3% of growth then you – probably, a guess – get 60% of that 3% of growth in taxes.

Because everyone’s already using all their tax free allowances, any increase in income gets taxed at full whack – and perhaps more as people are pushed up income bands. Etc, etc, across the economy as the money circulates.

The marginal tax rate in the economy is always higher than the average rate…..

Two British taxi companies have launched a crowdfunding drive for the last leg of a lengthy legal battle with Uber that could result in higher cab fares.

Uber will seek, at a supreme court hearing in July, a ruling on contractual models that affect whether VAT applies to private-hire companies outside London, which it has argued would level the playing field across the UK.

However, the minicab industry has fought the move, which it said could raise the cost of taxi journeys outside London by at least 20%.

The tossers like Jololyon insisted that Uber must pay VAT. So, righteously, Uber is insisting the cab firms must pay VAT. Spot on. Bit of a pisser for consumers but that’s Jololyon’s fault.

Since 2022, a quarter of Norway’s top 400 taxpayers have left,

Still, as a result the country is no more equal so everything is better, right?

Roman Abramovich may owe HMRC £1bn for unpaid taxes, analysis shows

We nick his £2 billion and change from selling Chelsea and then also demand tax on top?

Rachel Reeves has been accused of “asset stripping” businesses by a senior executive at the ethical cosmetics chain Lush.

Jack Constantine, the chief digital officer at Lush and the son of co-founders Mark and Mo Constantine, said the Government was “sucking” profits out from businesses with policies such as its inheritance tax raid.

Lovely, lovely, lefties.

Nononono, we didn’t mean take the money away from us rich people. You’re supposed to be nicking it from those rich people, over there.

Jack said the inheritance tax changes were “teasing assets away” from businesses.

He said: “Unfortunately for us, if you look at it, it feels as if this is effectively asset-seizing. We’re basically building the business here, and then you’re just stripping these assets away. There’s no option. There’s nothing a business can do about it. It’s out of our hands.”

But this is exactly what inheritance tax upon business assets is. We’ve got to take the money off the usefully productive capitalists to pay current benefits to our voting base.

And?

In total Britain lost a net 10,800 millionaires to migration last year, a 157 per cent increase on 2023, meaning it lost more wealthy residents than any other country except China.

A limit we might well be over…..

To remind about the Laffer Curve. It is possible to talk about a societal such curve. But it’s also true that each and every tax has its own deadweight cost. Taxing this, in this manner, over here, prevents more economic activity than raising the same sum in revenues from taxing that other thing, in that other manner, over there.

Akin, very akin, to the marginal elasticity of demand with respect to price that we all know is true in other parts of the economy. A tax change here changes behaviour – and thus the amount of activity that revenue can be skimmed off – more than one over there.

Wealth taxes are known to have higher deadweights than income, both than consumption, all three than “repeated taxation of real property” ie, land value tax. And transactions taxes have the very tippy topmost deadweights.

What this means. It is, in fact, possible to squeeze more tax out of the British economy. Other countries manage to do so out of theirs after all. But to do so requires doing what those others do as well. Abolish all those marginal in revenue terms taxes on wealth and the acqusition, possession and passing on of it. And go get the revenue from a swingeing rise in VAT and rates.

Which is, of course, a regressive tax change, not a progressive one. But then that’s also always true. You don;t get much revenue from taxing the rich because there aren’t very many of them. There’re lots of poorer people so that’s who you have to tax.

Farmers have been told by the Chancellor that they must pay inheritance tax to fund the NHS, despite mass protests planned for Tuesday.

Converting capital into current spending seems a strange way of getting to a high investment, high wage, economy.

One of the laddies around here worked in UK for 5 years, 10 to 15 years back.

He paid NI while doing so.

He thinks he can claim back the NI he paid.

I dunno but I’ve been elected to write letters, do the English, for him in his quest.

So, is this possible? If it is, how? Where does one even start?

Rachel Reeves has insisted the nation cannot afford to let all farmers continue passing on their estates without paying inheritance tax.

Independent farmers who own their own land and who are not routinely raped for wealth taxers. TYhy’d be sturdy yoemen, wouldn’t they? They’d be exemplars of the bourgeoisie in fact and we can;t have that when the project is to have all reliant upon govt – in order to give govt power over all.

“If people only live here because they pay less tax, they should f— off,” said Mr Vince, who donated £5m to Labour before July’s general election. “This is a brilliant country. There’s no way people won’t live here because of a fairer tax system.”

The thing is we’ve tried this before and the result was the brain drain. So objective reality disagrees, right?

Asked on Sky News whether “someone who works but gets their income from assets as well, such as shares and property” was a working person, he said: “Well, they wouldn’t come within my definition. I think people watching this will know whether they’re in that group or not.”

Sir Keir said his definition covered “those people who work hard and are anxious about whether they can make ends meet, and know that should something happen to them and their family they can’t write a cheque to get out of the problem”.

So, taking that strictly, anyone who hsa some savings – hell, an overdraft facility – on which they can write a cheque is not working class. So, you know, be afraid for the budget.

Reeves insists National Insurance increase won’t break manifesto pledge
Chancellor says raising employers’ contributions would stick to promise to protect working people from tax rises

That’s the tax she’s going to raise.

It’s obviously a bad tax to raise too – why do we want to tax employment? Yes, yes, that’s only the first incidence, the second is upon wages. But that first incidence is indeed upon employment. We’re narrowing the gap between what you get from going to work and the bennies you get from not going to work.