Thursday, April 30, 2009

On tax, wealth and waste

From a letter in the Financial Times, entitled Don’t tell me the private sector hasn’t wasted my money. TJN doesn't generally take positions on tax rates like this, but this letter is worth reproducing in full:

"From Mr Simon Hallett.

Sir, Like Tim Elster (Letters, April 28), I am in line to pay the new 50 per cent rate of tax. I read that high earners are apparently depressed, demotivated and planning to leave the country. Public spending on health and education has apparently been worthless, while public sector workers are self-evidently overpaid by comparison with your earlier correspondent.

Then I think of the exhausted, heavily pregnant hospital doctor who saved my son’s life at 3am after 19 hours on duty. I also think of the nursery teacher at our village primary school who spends Sunday evening at school, unasked, lovingly preparing activities for the children.

I have been in the investment business for some 20 years, during which time I have seen just how many lunches, clay pigeon shoots, tickets to the rugby and nights at the opera come between the average pensioner and his pension, or between a charity and its investment income. Don’t tell me the private sector hasn't been wasting my money like it grew on trees.

Let’s get real about this: £150,000 is not a small amount of money. I would like to see the complainers explain exactly what items they will have to give up as the result of the 50 per cent tax band. Let's put them on the table and we can all have a good laugh.

Surely it’s time for a more grown-up attitude to this. Possession of large amounts of money doesn't allow people to cut themselves off from the rest of society. Society has a habit of paying you a call in one way or another, taxation being one of the more innocuous.

I will be interested to know where the emigrants are planning to end up, and whether they plan to remain perpetual outsiders in their host country.

Simon Hallett,
Peaslake, Surrey, UK"

Hat tip: Richard Murphy.

Read more here.

3 Comments:

Blogger Henry said...

All true but it doesn't work like that. People at that level are footloose. They will weigh up the total reward they can receive for their work. Employers have to compete if they want to recruit and retain. In the end this tax has to be borne by employers.

But the point about near-punitive income tax rates is that they fail to distinguish between people who have high incomes through being skilled parasites and those who are hard working, talented wealth-creators. There is a difference. The parasites should enjoy 100% tax rates on their fruits of their robbery. Those who have genuinely worked to create wealth should be let off lightly by the tax authorities regardless of whether they receive a pittance or are well rewarded.

Let's start getting clear about this and discriminate between workers and "high-end" drones.

12:19 am  
Blogger Demetrius said...

Those leaving for tax reasons could join other show biz, celeb, and mega rich expatriates in some of lovelier tax havens living in the fortified heavily guarded enclaves serviced by imported luxury commodities. We used to have some of these in the UK, we called them castles and stately homes occupied by The Normans and their offspring. They lasted a very long while, until after about 800 years when we started to tax them properly. Given the state of some of the tax havens however I suspect that eight years is the max, maybe eight months.

1:20 am  
Blogger Henry said...

@Demetrius

I only wish what you said was true. We don't adequately tax the nobs in their castles, especially not the five families who between them own the most valuable areas of central London, the land having mostly been alienated from the Monarch by dubious tactics in the sixteenth and seventeenth centuries.

And contrary to popular belief, Magna Carta was a movement by the nobles to slough off their obligations to defend the realm, from which time onwards the kings had to clobber working people.

The Swedish king had the right idea - took the land off the nobles and left them just with the handles to their names in what was known as the "Reductions". A present day equivalent would be for the Duke of Westminster's estates to revert to the Crown Estates Commissioners.

4:31 am  

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