Wednesday, 27 August 2008

Stop cowering, start taxing

Polly Toynbee had an excellent OpEd piece in the Guardian yesterday on Labour's dismal cowering in the face of the anti-tax lobby. Why a nominally center left government refuses to impose the tax burden fairly is beyond me. They lack courage in tackling the super-rich, corporate tax planning, and the rest of the machinations of the tax 'optimisation' industry.

So, here are some proposals.
  • Remove the possibility of non-resident status for UK citizens. If you want a UK passport, pay your tax. Americans pay tax on their worldwide income: why shouldn't Brits?
  • Reduce period non-doms are allowed to work in the UK without paying tax to 30 days, and include travel time.
  • Remove all of those trust loopholes that allow the rich to avoid inheritance tax. Use the savings to raise the threshold for paying it.
  • Stop companies redomiciling to low tax countries by assessing tax on the value added by management in the UK. A brass plate and three directors in Dublin should not be enough to re-domicile profits if head office for all practical purposes is in London. And while you are at it, crack down on transfer pricing games.
  • Remove the unlimited carry forward of losses, tapering it out over five years.
  • To stop individuals hiding incomes, make overseas accounts illegal. That would provide a huge boost to the British financial system, and remove significant income from those places (like the Channel Islands or Bermuda) that have made a business out of defrauding the British taxpayer.
There's more, lots more, but that would be a good start.

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