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A surprising source accepting an uncomfortable truth:
http://www.bbc.co.uk/news/uk-scotland-scotland-politics-35915309
I can see some logic in it, but then I see people spending £1m on a small flat to live a few miles closer to work in London rather than commute and really wonder if an extra 10% tax would make them move thousands of miles to lands foreign.
She added: "It makes no sense to propose a tax measure knowing that it might reduce the amount of revenue we have to spend on our public services."
Wisdom comes to everyone in the end!
[still time to edit competitive BTW!}
At best an unproven hypothesis; heavily promoted by media barons who have the most to gain by having it believed!
I suppose with the specific example of Scotland, if it were higher/lower than England it's easy enough to be paid through an office somewhere else in the UK and potentially save yourself some money.
OTOH, there can't be many people who earn in that tax bracket that actually pay income tax on it (rather than doing the whole consultant/self employed/outside IR35 thing). I'd heard that NHS and local governments were banning executives from doing that so they must be a significant amount of the total?
At best an unproven hypothesis; heavily promoted by media barons who have the most to gain by having it believed!
...and the HRMC and other academics who have a genuine interest in determining the optimum tax rate for maximising revenue. Odd that...
Serious commentators talk about taxable income elasticity, saves them mentioning Laffer in public 😉
...and the HRMC and other academics who have a genuine interest in determining the optimum tax rate for maximising revenue. Odd that...
Shame then that tax rates are set by politicians who have no interest in optimum tax rates and just follow ideology.
saves them mentioning Laffer in public
yet another unproven hypothesis, just with a fancy name for pseudo credibility...
NB I'm sure there is an optimum tax rate, but I don't believe the only factor is the tax rate percentage. The whole context of the society and environment, in which the tax is levied, would have to be accounted for, which would make calculating it very complex (basically next to impossible).
Shame then that tax rates are set by politicians who have no interest in optimum tax rates and just follow ideology.
...and double shame that history doesn't support that hypothesis
(goes off to wonder if politicians receive any input from HMT, HRMC and OBR - odd that the whole budget is based around the latter's independent forecast rather than ideology isn't it).
How's the idea of cutting corporate tax to make Scotland a more attractive place for business coming along? Was that an ideologically driven idea from the left-of-centre SNP (ok yS)?
The whole context of the society and environment, in which the tax is levied, would have to be accounted for, which would make calculating it very complex
Good edit and a very sensible point - it is very hard to determine what that rate is, which is why so much time is invested in the topic Forget ideology, the 50p tax rate was always a stunt to trap the Tories. Crap economics but good politics.
Laffer was just an individual who happened to champion a point. The actual issue is well known to any economist - simple case of elasticity.
At best an unproven hypothesis; heavily promoted by media barons who have the most to gain by having it believed!
...and accepted by Nicola Sturgeon and Tony Blair, both of whom had/have a massive amount of political capital to gain by raising tax rates for higher earners.
Let's not forget Gordon Brown introduced the 50p rate just before he left office - AIUI a deliberate trap for the new regime.
Whenever this discussion comes up with prophesies of doom for any raising of tax for high earners or clamping down on tax evasion I'm reminded of a simple fact:
1. Denmark,, (the 2015 [url= https://en.wikipedia.org/wiki/World_Happiness_Report ]happiest country in the world[/url]) has a top tax rate of 57%
So, whilst I understand that high tax doesn't always = happiness and that there are many other factors at play here, when people make statements that taxing the wealthy will lead to a country being stripped of all wealth and entrepreneurship I am somewhat wary and generally start asking what the people have to gain by saying this.
That said, personally I'd rather see a huge global clamp down on tax evasion by the wealthy but whether we'll ever see the international will to do so is another matter.
when people make statements that taxing the wealthy will lead to a country being stripped of all wealth and entrepreneurship I am somewhat wary and generally start asking what the people have to gain by saying this.
In this case I'd guess what she has to gain is £30m for the good of her country.
That said, personally I'd rather see a huge global clamp down on tax evasion by the wealthy but whether we'll ever see the international will to do so is another matter.
This year's budget was a start (yes a start)
http://www.ft.com/intl/cms/s/0/16106234-e918-11e5-bb79-2303682345c8.html#axzz44HnN1SKC
And the policy of tax relief on debt interest is agreed across the G20 nations. (strictly speaking this is aimed at corporate tax avoidance)
Ineed OP, I saw this yesterday. It's something @teamhurtmore and I have been batting on about for ages on here. I have posted aboit my personal experience as an example but the neh-sayers just ignore all of this and all the academic research and real world experience.
Tax evasion is much more a corporate than personal issue, its possible as it supported by politicians (and their electorate) the world over. Look at Junker rewarded for cushy tax deals he set up in Luxembourg which harm the rest of the EU to the tune on many billions pa by being made head of the EU. Its also supported by all of us who buy things "cheap" on the internet
Ineed OP, I saw this yesterday. It's something @teamhurtmore and I have been batting on about for ages on here.
Still unproven. You can't quote any percentage and say it's too high without considering the whole environment, which just about no one ever does as it is staggeringly complicated (and Economists are generally only able to manage incredibly over simplistic models such as the mythical Rational Consumer).
When you've been stopped on the street in Mayfair by a homeless, ex-forces guy and asked to buy a copy of the Big Issue while a coked up knobber in a Lamborghini Gallardo wails past, bouncing off the rev limiter, you rapidly reach the conclusion that the wealthy simply aren't taxed enough.
Personally, I'd chuck in a 75% tax rate for the 1%ers and would even offer to drive them to the airport, on the understanding that their newly declared non-domiciled status means they're not allowed back in the UK under any circumstances - unless it's to cough up a tax bill.
Hang on FF - I though this was purely an ideologically driven issue? That's also very rude about all those hard working folk at the OBR etc...
And dear Nicola is a left-of-centre politician and anti-austerity. So why (and despite what other SNP members are saying) is she so reluctant to raise the top rate of tax to 50p? Correct me if I am wrong, but this was an election commitment?
Her approach does not sound very ideological to me - more pragmatic or indeed "rational". Or perhaps she took some advice...?
For a giggle 😉
[quote=footflaps said]At best an unproven hypothesis; heavily promoted by media barons who have the most to gain by having it believed!
So the SNP have fallen for the media BS ? I thought they were more astute than that.
Earlier this week, Sturgeon offered higher earning Scots paying the 40% rate a modest tax cut in 2017, raising the threshold from £43,000 to £43,387, based on inflation. The Scottish government’s own data shows this would mean those earning £52,000 or more paying £177 less tax next April.The first minister insisted that she had rejected a 50p top rate because Scottish government analysis suggested it would lead to a flight out of Scotland by business executives. If only 6% of Scotland’s 17,000 additional rate tax payers left Scotland, a 50p rate would raise nothing extra at all; if 7% left, Holyrood would lose £30m in revenues.
The ideology of left-of-centre parties 😉
Is it not because there are more public sector employees in the 1% in Scotland than nasty bankers?
According to Her Majesty's Revenue and Customs, most of those earning over £150,000 are not bankers after all, but senior public sector staff. Indeed, in Scotland there are more in the health and social work sector alone earning above £150,000 than in financial services.
The part that seems to clash for me is that I would consider 45p rate tax payers employed by the state to be less mobile than people employed in the private sectors. Also trying get around the IR35 rules when employed in the public sector would be extremely difficult, whereas in the private sector you have much more flexibility in how you can be paid.
[i]I suppose with the specific example of Scotland, if it were higher/lower than England it's easy enough to be paid through an office somewhere else in the UK and potentially save yourself some money.[/i]
It's where you live not work that determines your tax rate.
And she's not doing it because of £30m, even for Scotland that's peanuts - she's doing it so the SNP don't get impacted at the soon election.
@Stoner, that's quite a fact there - high earning public sector workers.
@footflaps I think we understand that there will never be good enough proof for you, not even Sturgeon and the Scottsih government actually [b]acting[/b] on OBR advice. Its not political rhetoric its action.
It's not really "income tax avoidance" if you just piss off and live somewhere else...
Having said that, it's the BBC report and not Sturgeon that suggested top rate employees will move (to England?)
“I will task the Council of Economic Advisers to look at how we might mitigate that risk. Now, it’s not just about people leaving the country – I set out figures last week that said if 7% of the top taxpayers were to leave then that could lose £30m. But for example it could involve people choosing to transfer their income into capital gains...."
Not exclusively, just a wee hypothetical suggestion that they might.....
[But note FF no ideology here, rather a decision to consult the CoEA]