 |
| Nice place for a holiday - But where's the dosh from? |
It always used to be said that having a concentration of very wealthy people in a society gave that society added benefits because these people spent their money in that society and therefore created demand and therefore income for other less fortunate souls who perhaps were not as wealthy. The doctrine of self interest was supposed to benefit everyone, at least to some degree. Now the scrutiny on this hypothesis has increased. The revenue raising pressures on governments are immense and where before they did not seem to be too enthusiastic about chasing very rich people for tax because sources of government revenue were fairly stable and indeed slightly increasing, now governments are waking up to the fact that groups of very rich people do not pay much if any tax at least not in proportion to their wealth. There is no problem in being rich , there is a problem when the tax bill for such people is lowered artificially by use of very clever devices which the rest of society is not in the same position to profit from. Yes we would all love to pay less tax, but the tax bills of some of the wealthiest people do not hang together in terms of many of the benefits they gain from our society.
The extent of this problem has been revealed on an international basis by the Tax Justice Network. according to that Network;
"Assets held offshore, beyond the reach of effective taxation, are equal to about a third of total global assets. Over half of all world trade passes through tax havens. Developing countries lose revenues far greater than annual aid flows. We estimate the amount of funds held offshore by individuals is about $11.5 trillion – with a resulting annual loss of tax revenue on the income from these assets of about 250 billion dollars. This is five times what the World Bank estimated in 2002 was needed to address the UN Millennium Development Goal of halving world poverty by 2015."
There is an argument that if taxes on richer people were lower they would pay more -- the laffer curve -- but I am not sure. My daughter's friend's father is a tax consultant for one of the big 4 and his role is to ensure that rich people in a certain part of the UK pay little or no tax -- that is his role. not assisting industry to grow, not helping small companies, not advising charities but minimising tax bills. Not sure that I personally would get much satisfaction from that but each to his own I suppose.
The use of tax havens is an issue -- It is understood that the UK is linked\responsible for 14 of them. Where does that lead us? Into more offshore shenanigans and because these off shore places are tax havens -- what type of funds do they attract and from whom? Their very secretive nature does not bode well for transparency and indeed can be a cloak for criminality.
We are supposed to be in this together but I am not sure now. The trickle down effect has always been exaggerated particularly when there appears to be a torrent of resources flowing out of our countries offshore which could make a significant difference to bridging our deficit and improving our society.Perhaps it is time to build a dam?
Please view:
http://www.taxjustice.net/cms/front_content.php?idcat=2
http://www.taxresearch.org.uk/Blog/
No comments:
Post a Comment