The public debate in recent days on taxation has swerved into some hideously dangerous territory. Margaret Hodge, with no sense of irony apparently, has called for tax avoiders to be ‘named and shamed’ Allow me to state for the record, I wish I was smart enough and rich enough to be so named. Being ‘shamed’ by the likes of Hodge is something of a non-sequitur for me. Trust me Maggie, what ever you may think of me, right back at ya in spades. But I don’t demand money or fealty from you; nor in fact did I preside over child abuse in the homes I was responsible for and decline to investigate when alerted, and try to gag complainants in court, but let’s keep to tax.
Then we have the unbelievably clumsy announcement by Mr Ed of a mansion tax. Now it’s a fair bet this was only ‘pulled-out-of-his-arse’ because Cameron mocked the potential policy-free speech the day before. But to say it is ill-thought out is like suggesting the Titanic had a damp problem. No-one knew for sure what level it would operate at or how the valuation would take place, or the valuation date, or would this be reviewed annually or what level the tax would be at or what level the 10p tax rate would come in or how much this would cost. Monster-raving looney stuff. Not to be out-done, the Lib-Dems now like wealth taxes.
God alive is there is a bigger admission of failed government? Tax on acquisition, tax on disposal, now tax on holding? Lesson the first chaps, we do not have taxation problem, we have an over-spending problem and futile attempts to raid a few more pennies from people won’t fix this. Indeed, if you want to smash the central London property market and with it some banks, go right ahead. Also I don’t enjoy the tax return as it is, imagine how much I will like having some parasite from the tax office rummaging through the draws looking at my wife’s jewellery.
People become wealthy when private property rights are respected. This system means you no longer own stuff, you are the leaseholder and the state is the freeholder and this is a massive shift in the fundamental relationship between the two parties. Formerly if legally acquired and duty paid, it was yours (houses not withstanding), now all bets are off. And can anyone think of a better recipe for wealth flight? Won’t you just convert assets to diamonds or something and bung them in a safe deposit box in Zurich? So what then? Tax on extra-territorial global assets? Good luck finding ‘em boys and how anyway will that stand against double-taxation treaties? Say I own a place in Tuscany and pay local taxes, don’t double tax treaties mean I am exempt from UK taxes on said assets?
Total madness, economically destructive and futile as it won’t come close to filling the void of over-spending. If you don’t understand or refuse to see the problem, which is over-spending, all the pointless money-grubbing schemes are futile. I’m really starting to wish for the end of this, as the long drawn out death of the economy could do some real damage, whereas a bankruptcy and re-set at least gives pause for thought. And it is absolutely inevitable, so let’s have it sooner.