The American Spectator : Britain's Taxing Mistake

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Britain's Taxing Mistake

By Tom Bethell on 12.8.09 @ 6:08AM

As the UK prepares to impose the sharpest tax rate increase in 30 plus years, Switzerland looms -- and David Cameron already seems a loser.

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"There was virtual indifference to the U.K. tax system when people were paying 40 percent," said the managing director of the group holding these (oversubscribed) seminars. "But when you're talking about 50 percent, all of a sudden HM Revenue and Customs is in for a bit of a surprise. There are high net worth guys out there saying enough is enough."

As the supply-siders would say, 40 percent of something is a lot more than 50 percent of nothing.

"Companies from McDonald's, the fast food operator, to Informa, the British publisher, are on the move to Switzerland, because of onerous corporate tax rates," according to the Sunday Telegraph.

As for the rate at which tax refugees are taxed in Switzerland, my brother tells me that it can be negotiated with the government. Negotiated! That is what you call enlightened government. The Sunday Telegraph reported:

"Swiss personal tax rates are as low as 20 percent and there have been reports of UK-based executives being offered a ten percent rate as the government steps up its drive to entice high earners in."

One problem: Housing supply "is limited and rules denoting who is able to buy a property are rigorous." Property prices in Switzerland are high, "but pale compared to top end sites in London."

In addition to collecting revenue, the looming tax changes in Britain are intended to punish the rich. President Obama has the same attitude. He was told by a leading journalist last year that the reduction in capital gains tax rates by both President Clinton (in 1998) and President Bush (in 2003) had been followed by revenue increases. (And the stock market promptly boomed in both cases.) Obama's response was that that didn't matter because raising those tax rates was a matter of "fairness."

Prediction: The performance of the British economy is set to decline. In the last year the (London) FTSE 100 stock index has largely mirrored the movement of the Dow Jones Industrial average. Today, it costs $1.65 to buy a pound. That price will surely decline. One caveat: If Obama and the Democrats succeed in raising tax rates here next year, paralleling the changes expected in Britain, then all bets are off. I doubt if that will happen. But if it does, Obama can say goodbye to his Democratic majority in Congress.

Page: < 12

topics:
Taxes, Supply-Side Economics, David Cameron

About the Author

Tom Bethell is a senior editor of The American Spectator and author of The Politically Incorrect Guide to Science, The Noblest Triumph: Property and Prosperity Through the Ages, and most recently Questioning Einstein: Is Relativity Necessary? (2009).

Letter to the Editor View all comments (10) | Leave a comment

Vaemar-Riit| 12.8.09 @ 6:53AM

I am very critical of Cameron. But another British Labour Government would be a disaster beyond imagining. The key text to read for survival then would be Dennis Wheatley's 1935 "Black August," and the best advice I could give my British friends would be to find a nice secluded and self-sufficient hilltop farm and fortify it.

Ken (Old Texican)| 12.8.09 @ 7:01PM

Vaemar-Ritt,
I'm with you guy! Please check out the oh so erudite comments below.
(Idiots)
Why in hell haven't you caught an airplane yet?

We Americans are going to have such a jolly civil war...(sadly probably with bullets), very soon.
"We got a lot of horse-thieves need killin' but we gotta' kill 'em proper." (Judge Roy Bean).

Seriously, sir. Where do you hail from?
Thank you for dropping in.

Derek Leaberry| 12.8.09 @ 8:13AM

Cameron has instigated his own decline in the polls by his mealymouth statements regarding the European Union, Britain's role in that dictatorship, and whether Britons will be given a referendum on whether to join the EU gang of bureaucratic thugs. Labour and the Liberal-Democrats are both evil institutions to be sure but the Cameron Tories are cowardly.

melvin| 12.8.09 @ 10:44AM

Do you think that if the current trend continues of the EU's leadership being the EU that they're heavy handed approach could eventually lead to a European Civil War?
Reason being, that the EU tends to crap all over the smaller member states.
This is something that I have been visualizing in the horrendous way the EU's leadership dictates, "
Our way or the highway," mentality.

Derek Leaberry| 12.8.09 @ 11:16AM

I don't see a civil war between Europeans but a simmering one between Muslims and Europeans that is restricted to the sort of rioting we've seen in the last decade or so. As Europe has to downgrade their welfare states and necessarilly cut back the subsidization of the indolent Muslims, the rioting should intensify.

As for the response of European citizens to EU overreach, I see a patient public that only rejects the European Union when that institution loses all credibility, especially when the welfare state implodes sometime in the 2030s.

Christopher Holland| 12.8.09 @ 8:15PM

Imagine what the country will be like if the global warming scaremongers get away with their 'green' taxes and regulatory nightmares. Third world poverty looks like it is coming to Little Britain, ready or not.

Yosemeti Sam| 12.8.09 @ 11:01PM

" ... In several other ways, Cameron has attempted to minimize his differences with Labour, as though he believed that the problem for conservatives is that they are not politically correct enough ...."

Hah!

A UK RINO uncovered - just in the tick of time ?

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