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Author Topic: Ultra rich tax avoidance  (Read 638 times)

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Sir Tigger QC

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Re: Ultra rich tax avoidance
« Reply #15 on: 07 November 2017, 14:47:16 »

After listening to Mr Whine for the last half hour, that's the most sensible thing I have heard, (read ::)) on the the matter  ;)



They always get that old commie 'Dale' from Pontypridd on the Vine show when things like this crop up.  They must have his number and invite him on so he can have a rant about the evils of capitalism!  ;D

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Lizzie Zoom

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Re: Ultra rich tax avoidance
« Reply #16 on: 07 November 2017, 15:15:14 »

It must not be forgotten in all this that most of this is completely legal, if in the "avoidance" category, and if you have any form of company or private pension you could also be involved as "investments" are made by the trustees in the open, global, financial markets.  So, you and I could be gaining from this "avoidance" to pay tax, not just the very wealthy.

As already said, if you were a multi-millionaire and could afford to employ the best tax avoidance specialists you would.  I know I would!  If you can legally avoid paying tax, like with the old duty free, why wouldn't you? ;) 
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Migv6

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Re: Ultra rich tax avoidance
« Reply #17 on: 07 November 2017, 15:21:14 »

The point about corporations is a valid one and one that has to be addressed at a government level. UKPLC have all sorts of levers that they could pull, which would garner an acceptable tax take but choose not to. All this bleating and whining from them about how companies need to "pay their fair share" is preposterous and basically amounts to asking companies to voluntarily structure their affairs to pay more tax than the law requires of them. 

Take facebook as an example, say they have worldwide profit before tax of £1bn and 10% of their users are UK based (both totally fictitious numbers), what do you suppose would happen if the government said to facebook "give us £1bn x 10%(uk users) x 19% (UK corporation tax rate) or we'll block your access to UK citizens and the revenue they generate, because that's what we think is a fair amount of tax to pay"? Hardly an unpopular move politically and FB would soon cough up rather than lose UK revenue. Yes there is scope for tit-for-tat deductions by other countries, but ultimately you would end up at a point where if you "in reality" generate revenue in a country, you pay tax there. Hardly the worst situation in the world, and would put big companies on the same footing as your local corner shop. Maybe you have to assess big corps on a case by case basis,but HMRC already do that with the various wierd and wonderful schemes they come up with to avoid tax.

All private companies exist for the benefit of their shareholders and voluntarily paying more tax than they need to is in direct conflict with a company director's overriding directive to deliver shareholder value. Its the same with wages, company directors should, under their remit, pay as little as possible to effectively deliver shareholder value. Now minimum wage laws, the power of unions etc all play into what that minimum number looks like, but as a society we shouldn't be asking company directors to not do their jobs properly. It is the role of the government to legislate as to what companies can and cannot do.

Very well put. There are alternatives which could completely eradicate this - global government or socialism (or both) but they are immeasurably worse than the far from perfect system we currently have.
Globalisation of big business is the root cause of the biggest part of the problem it seems. The only way I can see that changing is if business people themselves decide at some point, that it isn't actually the best way to do business and change it themselves, or people  vote with their money and make a point of dealing with smaller businesses, before every town & city in the world looks exactly like any other town or city.
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Franks Dad

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Re: Ultra rich tax avoidance
« Reply #18 on: 07 November 2017, 18:11:29 »

The point about corporations is a valid one and one that has to be addressed at a government level. UKPLC have all sorts of levers that they could pull, which would garner an acceptable tax take but choose not to. All this bleating and whining from them about how companies need to "pay their fair share" is preposterous and basically amounts to asking companies to voluntarily structure their affairs to pay more tax than the law requires of them. 

Take facebook as an example, say they have worldwide profit before tax of £1bn and 10% of their users are UK based (both totally fictitious numbers), what do you suppose would happen if the government said to facebook "give us £1bn x 10%(uk users) x 19% (UK corporation tax rate) or we'll block your access to UK citizens and the revenue they generate, because that's what we think is a fair amount of tax to pay"? Hardly an unpopular move politically and FB would soon cough up rather than lose UK revenue. Yes there is scope for tit-for-tat deductions by other countries, but ultimately you would end up at a point where if you "in reality" generate revenue in a country, you pay tax there. Hardly the worst situation in the world, and would put big companies on the same footing as your local corner shop. Maybe you have to assess big corps on a case by case basis,but HMRC already do that with the various wierd and wonderful schemes they come up with to avoid tax.

All private companies exist for the benefit of their shareholders and voluntarily paying more tax than they need to is in direct conflict with a company director's overriding directive to deliver shareholder value. Its the same with wages, company directors should, under their remit, pay as little as possible to effectively deliver shareholder value. Now minimum wage laws, the power of unions etc all play into what that minimum number looks like, but as a society we shouldn't be asking company directors to not do their jobs properly. It is the role of the government to legislate as to what companies can and cannot do.

Very well put. There are alternatives which could completely eradicate this - global government or socialism (or both) but they are immeasurably worse than the far from perfect system we currently have.
Globalisation of big business is the root cause of the biggest part of the problem it seems. The only way I can see that changing is if business people themselves decide at some point, that it isn't actually the best way to do business and change it themselves, or people  vote with their money and make a point of dealing with smaller businesses, before every town & city in the world looks exactly like any other town or city.




Too late!  I feel we are almost at that point already, not including the third world sector ,which will soon catch us up.
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Migv6

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Re: Ultra rich tax avoidance
« Reply #19 on: 07 November 2017, 18:13:54 »

True enough.
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tunnie

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Re: Ultra rich tax avoidance
« Reply #20 on: 07 November 2017, 20:39:36 »

I have no problem with it, anyone in same situation would do similar. Why give the government more for is to be wasted? If you have that much, you've worked hard graft for it. (Generally)
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Re: Ultra rich tax avoidance
« Reply #21 on: 07 November 2017, 22:59:44 »

The point about corporations is a valid one and one that has to be addressed at a government level. UKPLC have all sorts of levers that they could pull, which would garner an acceptable tax take but choose not to. All this bleating and whining from them about how companies need to "pay their fair share" is preposterous and basically amounts to asking companies to voluntarily structure their affairs to pay more tax than the law requires of them. 

Take facebook as an example, say they have worldwide profit before tax of £1bn and 10% of their users are UK based (both totally fictitious numbers), what do you suppose would happen if the government said to facebook "give us £1bn x 10%(uk users) x 19% (UK corporation tax rate) or we'll block your access to UK citizens and the revenue they generate, because that's what we think is a fair amount of tax to pay"? Hardly an unpopular move politically and FB would soon cough up rather than lose UK revenue. Yes there is scope for tit-for-tat deductions by other countries, but ultimately you would end up at a point where if you "in reality" generate revenue in a country, you pay tax there. Hardly the worst situation in the world, and would put big companies on the same footing as your local corner shop. Maybe you have to assess big corps on a case by case basis,but HMRC already do that with the various wierd and wonderful schemes they come up with to avoid tax.

All private companies exist for the benefit of their shareholders and voluntarily paying more tax than they need to is in direct conflict with a company director's overriding directive to deliver shareholder value. Its the same with wages, company directors should, under their remit, pay as little as possible to effectively deliver shareholder value. Now minimum wage laws, the power of unions etc all play into what that minimum number looks like, but as a society we shouldn't be asking company directors to not do their jobs properly. It is the role of the government to legislate as to what companies can and cannot do.

Very well put. There are alternatives which could completely eradicate this - global government or socialism (or both) but they are immeasurably worse than the far from perfect system we currently have.
Globalisation of big business is the root cause of the biggest part of the problem it seems. The only way I can see that changing is if business people themselves decide at some point, that it isn't actually the best way to do business and change it themselves, or people  vote with their money and make a point of dealing with smaller businesses, before every town & city in the world looks exactly like any other town or city.
Too late!  I feel we are almost at that point already, not including the third world sector ,which will soon catch us up.


Take a small to medium town. A decent chunk of their income is from business rates on shops/offices. Will that town reduce it's overall rate to the benefit of the small business, knowing that the big business will demand the same rate. If there are different rates for large and small, the large wiil cry foul ! Therefore big companies will dominate the retail space. Also, how many of those who say "support small business" shop online with Tesco? Generally, people WILL NOT put their money where their mouth is.





 
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Re: Ultra rich tax avoidance
« Reply #22 on: 07 November 2017, 23:01:14 »

And therein lies the problem I'm afraid. And I'm as guilty as most people.
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Rods2

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Re: Ultra rich tax avoidance
« Reply #23 on: 08 November 2017, 06:08:33 »

It all comes down to the Laffer curve and value for money for the rich. Since 1991 lazy politicians have put up taxes for higher earners exponentially in the UK, on the basis they can afford them and won't starve, now they are moving elsewhere or legally avoid them.

My latest business is currently building good earnings momentum, so if that continues then I'm going to be looking to move to the IOM. When you add up all the layers of tax and your economic output means you are working for everybody else, sorry but 50% is a red line for me, I won't be a slave of the state. :y :y :y
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Re: Ultra rich tax avoidance
« Reply #24 on: 08 November 2017, 09:49:17 »

Field Marshal Dr. Opti - I'm afraid most of what you wrote is, err, what's the polite word, err, balderdash. https://www.ifs.org.uk/publications/9178

The 'working poor' pay relatively little because they don't earn much, but a relatively large amount in percentage terms. There is also millions of the 'working poor' so the tax take is large.

Define working poor. You pay no Income tax if you earn below £11500 p/a, and no National Insurance either if you earn below £8164 p/a. The bottom 50% of income tax payers (i.e. those earning more than £11500 but less than about £25K) pay less than 10% of income tax receipts.

The middle earners take the brunt.They earn enough to pay plenty of tax but not enough to avoid or evade tax.

The "middle" 41% of income tax payers paid roughly 32% of income tax receipts.

The rich pay some tax, but not as much as they should due to dodgy tax avoidance schemes and smart accountants. :(

The top 10% of income tax payers (those with incomes over about £54,000) paid 59% of income tax

The super rich, be it individuals or corporations, pay virtually nothing. They are above the law, or the law is changed specifically so they don't pay tax. :(

The top 1% of income tax payers (those with gross incomes over about £164,000) contributed 27% of income tax receipts.

Personal taxation (Income tax, National Insurance and VAT) makes up about 62% of all government income. Corporation tax take is about 8%.
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aaronjb

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Re: Ultra rich tax avoidance
« Reply #25 on: 08 November 2017, 10:22:17 »

When Opti said "rich", I don't think he had £54,000 in mind.
When he said "super rich", I don't think he had £164,000 in mind, either.

I mean, my income is significantly over £54,000 (apologies for being crass) but I wouldn't consider myself "rich", and yet the tax man still brutally rapes me every year without lube because I'm (most likely) considered one of the "scum" high earners by that middle bracket.
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Re: Ultra rich tax avoidance
« Reply #26 on: 08 November 2017, 10:53:17 »

Field Marshal Dr. Opti - I'm afraid most of what you wrote is, err, what's the polite word, err, balderdash. https://www.ifs.org.uk/publications/9178

The 'working poor' pay relatively little because they don't earn much, but a relatively large amount in percentage terms. There is also millions of the 'working poor' so the tax take is large.

Define working poor. You pay no Income tax if you earn below £11500 p/a, and no National Insurance either if you earn below £8164 p/a. The bottom 50% of income tax payers (i.e. those earning more than £11500 but less than about £25K) pay less than 10% of income tax receipts.

The middle earners take the brunt.They earn enough to pay plenty of tax but not enough to avoid or evade tax.

The "middle" 41% of income tax payers paid roughly 32% of income tax receipts.

The rich pay some tax, but not as much as they should due to dodgy tax avoidance schemes and smart accountants. :(

The top 10% of income tax payers (those with incomes over about £54,000) paid 59% of income tax

The super rich, be it individuals or corporations, pay virtually nothing. They are above the law, or the law is changed specifically so they don't pay tax. :(

The top 1% of income tax payers (those with gross incomes over about £164,000) contributed 27% of income tax receipts.

Personal taxation (Income tax, National Insurance and VAT) makes up about 62% of all government income. Corporation tax take is about 8%.
Hang about, guvnor, that’s 128%.  ;D
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Re: Ultra rich tax avoidance
« Reply #27 on: 08 November 2017, 11:03:37 »

The 'working poor' pay relatively little because they don't earn much, but a relatively large amount in percentage terms. There is also millions of the 'working poor' so the tax take is large.

Define working poor. You pay no Income tax if you earn below £11500 p/a, and no National Insurance either if you earn below £8164 p/a. The bottom 50% of income tax payers (i.e. those earning more than £11500 but less than about £25K) pay less than 10% of income tax receipts.

I'm sure the good Lord can speak for himself. However, the key difference between his statement and your response is "tax" vs "income tax". If you consider VAT, Council Tax, duty on petrol, alcohol, VED etc etc, those who are working poor (defined as those households with 60% or less of median uk income after housing costs, the figure was £15,750 in 2015/16) pay a much higher percentage of their income than any other income bracket.

I mean, my income is significantly over £54,000 (apologies for being crass) but I wouldn't consider myself "rich", and yet the tax man still brutally rapes me every year without lube because I'm (most likely) considered one of the "scum" high earners by that middle bracket.

I would also put myself in this boat. That frigging pie chart they send round every year telling me how they spent my tax take is usually enough to have me looking at the jobs pages for Dubai, Kuwait or Abu Dhabi  ;D
« Last Edit: 08 November 2017, 11:09:12 by jimmy944 »
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Field Marshal Dr. Opti

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Re: Ultra rich tax avoidance
« Reply #28 on: 08 November 2017, 12:21:26 »

The 'working poor' pay relatively little because they don't earn much, but a relatively large amount in percentage terms. There is also millions of the 'working poor' so the tax take is large.

Define working poor. You pay no Income tax if you earn below £11500 p/a, and no National Insurance either if you earn below £8164 p/a. The bottom 50% of income tax payers (i.e. those earning more than £11500 but less than about £25K) pay less than 10% of income tax receipts.

I'm sure the good Lord can speak for himself. However, the key difference between his statement and your response is "tax" vs "income tax". If you consider VAT, Council Tax, duty on petrol, alcohol, VED etc etc, those who are working poor (defined as those households with 60% or less of median uk income after housing costs, the figure was £15,750 in 2015/16) pay a much higher percentage of their income than any other income bracket.

I mean, my income is significantly over £54,000 (apologies for being crass) but I wouldn't consider myself "rich", and yet the tax man still brutally rapes me every year without lube because I'm (most likely) considered one of the "scum" high earners by that middle bracket.

I would also put myself in this boat. That frigging pie chart they send round every year telling me how they spent my tax take is usually enough to have me looking at the jobs pages for Dubai, Kuwait or Abu Dhabi  ;D

Yes.....we are taxed on almost everything and as a percentage of earnings it it people on least money who pay the most.

The tax on a gallon of petrol for a man earning minimum wage (assume 70% tax and VAT) is roughly 2%. Pretty easy to work out the percentage of tax on a full tank. :'( :'(

The same applies to everything the poor pay tax and  VAT on. :-\

Of course, if you happen to be one of the super rich you are somehow exempt from the £3.3 Million VAT on your new jet.

I don't actually blame the rich and super rich for taking advantage of the loopholes. The government is  to blame.

 
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Field Marshal Dr. Opti

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Re: Ultra rich tax avoidance
« Reply #29 on: 08 November 2017, 12:24:42 »

When Opti said "rich", I don't think he had £54,000 in mind.
When he said "super rich", I don't think he had £164,000 in mind, either.


I mean, my income is significantly over £54,000 (apologies for being crass) but I wouldn't consider myself "rich", and yet the tax man still brutally rapes me every year without lube because I'm (most likely) considered one of the "scum" high earners by that middle bracket.

Correct again, Aaron.

Multiply by 1000 for the definition of rich and super rich. :)
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