Only the poor, envious and people that don’t know what they’re talking about argue that the rich should pay more tax.
Firstly there are two issues here:
- The legality and
- The morality
From a legal standpoint, this the same as the UK’s MP Expenses Scandal. Apart from a few dishonest MP’s, the rest did nothing legally wrong. They played the rules as they stood. Fair enough, some MP’s actually claimed for stuff that was clearly against the rules, or even for stuff that sometimes didn’t exist.
But the vast majority of the outcry was over the excess and loose morals displayed by the MP’s. Though I agree with this, I believe the public anger was misdirected towards the actual claims as opposed to the ridiculous expense policies that were in place.
Its the same with the rich paying more tax debate. The actual issue is the tax system and the loopholes, not the rich themselves. Lets be honest, not many of us really want to pay tax at all or National Insurance in the UK. As most of us are employed by a company, the tax system doesn’t really give us many choices as its all automatic, i.e. taken from our payslips, added to the prices we pay, etc.
As directors of companies, the rich have different choices open to them. They own the companies, and run them. So they have multiple tax options available to them: tax as an employed person, tax as a self-employed person, tax as a shareholder of the company. Each method has its tax rules. Clever accountants are employed to ensure the most tax-efficient route is chosen so only £10k is taken as an employed person as that is tax-free. Expenses are used to reduce taxes payable on the self-employed and business routes.
All of the above is within the rules set by the tax regime of the country. By introducing bigger tax percentages doesn’t change the loopholes being used so only affects those lazy high-earners that can’t be bothered to take up the services of a skilled accountant.
Making this issue about the moral obligation of the rich and using examples like poor people being unable to go on holidays or having to economise on electricity consumption as a reason why the rich should pay more is as ridiculous as when someone tells you to finish all the food on your plate because it is unfair to those in the third-world who are starving; one does not affect the other. Extra tax doesn’t go to that poor person to pay for their utility bill or towards a family’s holiday tickets. It will simply disappear into a Government coffer where some will decide how to better spend it. Once that happens, there is no control anymore. It could go towards plugging the nation’s budget deficit, towards keeping more nurses in jobs OR it could just as easily go towards the luxury lifestyles led by MEP’s, towards building more unused fire stations, or towards IT companies working on the next flawed NHS IT system.
I’d much prefer the rich to continue creating jobs in the UK, and to then use that wealth for philanthropic activities outside Government control and bureaucracy, wouldn’t you?
Related articles
- Five reasons not to introduce wealth taxes (blogs.telegraph.co.uk)
- Buffett clarifies his ‘tax the rich’ stance (dontmesswithtaxes.typepad.com)
- Warren Buffett Unsure Exactly What Obama’s ‘Buffett Rule’ Is (michellemalkin.com)
- Paying taxes as a contract employee (ask.metafilter.com)