Prof Prem Sikka: Tax legislation in the UK benefits the interests of the rich – ‘UK governments are dressed-up in the garbs of democracy, but continue to privilege the interests of wealthy elites and footloose capital.’
Prof Prem Sikka: Tax legislation in the UK benefits the interests of the rich – ‘UK governments are dressed-up in the garbs of democracy, but continue to privilege the interests of wealthy elites and footloose capital.’
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> The net result of various tax policies is that the poorest 10% of households pay 47.6% of their income in direct and indirect taxes, compared to 33.5% by the richest 10% of the households. Inevitably, poverty is inflicted on the masses. Even before the pandemic 14.5 million people, including 4.3 million children, lived below the poverty line and there is ever increasing reliance upon foodbanks.
The only way to change this (IMO) is to reform the electoral system which probably entails a Lib/Lab non aggression pact.
The opposition parties need to start thinking beyond the next election.
Maaaaybe people are waking up to see the real tory story
Capitalism works most effectively when it is properly controlled by legislation. The ‘Greed is good’ mentality is damaging the country e.g. the privatisation of the railways and buses has made a great deal of money for companies and a few individuals but it has placed a much bigger burden on ‘average’ earners and the less well off and added to the decrease in social mobility. Transport and utilities should be run for the good of the people. We need a different economic plan, one that is pragmatic, cross party and long-term.
So there are two issues in the article – non-domiciled residence and taxation of capital gains.
As for non-domiciled remittance based taxation they forgot to explain that in return for not taxing and not declaring foreign income – maximum income tax of 45% is paid for every pound spent in the UK, earned in the UK or transferred to the UK. Meaning if a person wants to move here from India and keeps his business in India he will pay 45% of the price of his car, his house, his restaurant bills and even 45% of those 45% of the taxes he pays here – because it’s 45% of every penny transferred to the UK. Adding to this VAT they pay woping 65% of their consumption in the country. This system is absolutely profitable for the UK, because it attracts rich people from around the world and let’s them keep their businesses abroad without complicated tax issues, but still live in the UK and contribute greatly to our economy. It also allows them return any time, so they will not hesitate because the decision to move is not irreversible. The problem with Rishi’s wife is not the status itself – it’s the fact that she received and used the status illegally. It doesn’t matter how good the tax code is when it’s abused.
As for capital gains tax – it’s competitive in the UK, meaning slightly above average in the first world. We have a good example of what happens when leftist propaganda prevails with CGT – it’s Republic of Ireland. They raised it significantly and also introduced capitalization of unrealized profits every 7 years and investments became unprofitable. So the only good investment there is now real estate. 20% of houses stand empty, the average price on the house even on the west coast is higher than in London and Irish youth emigrates in mass to continental Europe.
Overall – the world is global now and taxes must be competitive. If taxes are significantly higher than average – the highest payers will just live. I don’t mean rich here, the top contributors overall are upper middle class specialists.
I’m – surprising enough – not a Professor and I knew that. 🙂
The Non-dom nonsense is only one aspect of the ruses, dodges, and ‘loop-holes that the already rich employ to avoid (I’d say evade) paying Tax.
Funnily enough, all these long-standing loop-holes etc., *never* seem to get ‘fixed’. I wonder why.