If turning the UK into a tax haven generates more revenue I don’t see this as a bad thing.

Richard Murphy,

It is blatant discrimination on the grounds of wealth. Article 2 of the UN Universal Declaration of Human Rights says:

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.

Foreign residency is not mentioned by the UN UDHR, though, so Article 2 does not appear to be relevant.

On the other hand, this means that foreign investors will become UK taxpayers more quickly and, whilst corporation tax has been lowered, capital gains tax has been raised to 28% so these entrepreneurs will in fact be paying more tax on their profits.

“Foreign residency is not mentioned by the UN UDHR, though, so Article 2 does not appear to be relevant.”

The Universal Declaration isn’t justiciable in the UK anyway, is it?

This is stretching meanings somewhat. Since when was up to £10 million ‘ super-rich ‘? How does making it easier to obtain residency for individuals with money to invest make us a tax haven? Presumably when they were not here they were not paying UK tax and if they invest in the UK and obtain UK residency they will be paying UK tax. I am perplexed why that makes us a tax haven. Canada currently attracts 3,000 such individuals each year and the UK a few hundred. Does that make Canada a tax haven?

Canada was the main beneficiary when Michael Howard made it difficult for people to move from Hong Kong to the UK before the handover. Considering how well they have done and benefited the economy of British Columbia maybe we should have paid them to come here.

On the other hand, this means that foreign investors will become UK taxpayers

Depends, what if their profits are registered in the name of spouses, housed in other countries?

Would make more sense to invite people who may be poorer but have skills and want to work hard and become full taxpaying citizens here.

so these entrepreneurs will in fact be paying more tax on their profits.

LOL, good one.

Mr Murphy really needs to think his points through, as this is a pathetic attack – there may well be an obvious unfairness here (although logically to exploit it you have to allow unfettered immigration – our current system already discriminates) but citizenship is in the gift of states, not a human right (other than as a citizen of the state into which you are born). If he cannot identify this rather key issue as a problem it leads to the question of whether he is blindly striking out politically or just has a very poor grasp of concepts.

Sunny,

Are you advocating open borders? I would possibly agree with you, but clearly for the sake of the state you could not grant people the rights of citizens (hate that word – it is inaccurate) without being sure they would not be a burden?

“Since when was up to £10 million ‘ super-rich ‘?”

Richard, I thought the article was a bit crap as well, but really -10 million is super-rich and enough to put you in the top 1% in the UK, and probably make you part of the global elite.

Perspective: the median salary in the UK is around £26,000

@ 10. Planeshift

If you earn £26,000 per annum you are in the top 1% of the richest people on the planet. I suspect that not many people earning that salary considers themselves part of the global rich. Anyone with assets of £ 10 million is obviously rich. However, I still think it is stretching things to call them super-rich.

http://www.globalrichlist.com/

Pretty much every country has the same kind of rules and exemptions for immigrants who can enrich the economy of the host country, you know.

Furthermore, pretty much every country has special fast-track rules for those who can contribute artistically and scientifically. I’m looking forward to a post on this site complaining about discrimination against the talentless and the academically-challenged.

“Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.

Here we very obviously have deliberate discrimination on the basis of property. ”

Clearly this is nonsense. For while that UN Declaration is just lovely, note that it says “national or social origin”. Which clearly and obviously does not apply to matters of immigration or visas, otherwise every restriction upon the free movement of people would be a breach of said UN Declaration, wouldn’t it?

For visas are themselves a system of discrimination based upon national origin.

“And how long, I wonder, before people begin to become seriously angry about this blatant abuse that is intended to shift the burden of tax from capital onto the long term resident population of the UK?”

How? Rich people arrive in the UK, invest in a business (which they must do, that’s how they get their visa), create jobs and pay tax on the money they make from that. Which they will, for they become resident, thus paying UK tax on all their UK earnings.

Seriously Richard, WTF are you talking about?

If they don’t come we get nothing. If they do come we get capital, jobs and tax revenues.

Watchman: Mr Murphy really needs to think his points through, as this is a pathetic attack – there may well be an obvious unfairness here

Which is exactly what is being attacked above, whether you like it or not.

If they don’t come we get nothing. If they do come we get capital, jobs and tax revenues

And your point is?

Can’t you just understand that we don’t like rich people around here because they mean everyone else suffers in relative poverty?

If they weren’t so rich, we wouldn’t be so poor…………

@3 George W. Potter: “On the other hand, this means that foreign investors will become UK taxpayers…”

And even if they don’t pay a penny in income tax, they’ll still be hefty tax payers: VAT, council tax, road licence duty, alcohol and tobacco duties, vehicle fuel duty, airport tax, stamp duty. It won’t be a huge earner, but better than nothing which is what we get now.

Tax havens offer low tax regimes to lure foreigners to recognize income and pay tax in their jurisdiction. This is not really the same thing as making it easier for rich people to immigrate, and it’s not something the UK is often accused of. Our problem is the opposite – we are the high tax regime people are lured away from.

Incidentally, don’t most countries make it easier to immigrate if you’re rich?

Blathering nitwit though he is, RM does have a point about the undesirability of tax havens. Joel Slemrod (a real “tax expert”) has a paper on tax competition and tax havens – see here

http://webuser.bus.umich.edu/jslemrod/research.html

he’s written a bunch of books on taxes too, that RM won’t have read.

Oh The Rand race to the bottom eh?

A tiny group of global elites will be pandered too, and promised more and more as the real people who live in the country will be given less and less.

And the tories have the nerve to rap themselves in the flag , while all the time screwing their own people for the benefit of a bunch of rich free loaders. No more patriotic lectures from the right please.

Here are some tax ideas that Labor ought to adopt from Scott Adams – the best thing written about taxation in decades. I think we ought to offer the top 1% of earners 5 votes and their own lane on the M4 in return for paying 60% income tax.

And here is something that ought to make people think twice about whether “shifting the burden of taxation onto capital” is as desirable as they assume.

oh crap – the Scott Adams link:

http://online.wsj.com/article/SB10001424052748703293204576106164123424314.html

VAT, council tax, road licence duty, alcohol and tobacco duties, vehicle fuel duty, airport tax, stamp duty. It won’t be a huge earner, but better than nothing which is what we get now.

Hmmm, while they’re cutting foreign students from coming here, paying large fees, consuming local products and saving our education system.

Yes, there’s consistency right there. Stop foreign students from studying here, but let the super-rich come here.

Yes, there’s consistency right there. Stop foreign students from studying here, but let the super-rich come here.

Well, yes, students cost us money, rich people make us money by paying taxes……

“Well, yes, students cost us money, rich people make us money by paying taxes……”

Foreign students don’t, they pay market rates for fees and spend their own money. Higher education is a significant export for us.

@21 Sunny: “Hmmm, while they’re cutting foreign students from coming here, paying large fees, consuming local products and saving our education system.”

Non-EU students pay a part of my wages. They subsidise EU and UK students attending UK universities. And they are not being cut; the opposite applies because they are actively recruited.

“Foreign students” are only being reduced in numbers by controls on fake language or remediary colleges. The controls apply to institutions — those that do not educate may not admit new students. The controls do not apply to students — genuine students can enter genuine schools, can get a part time job to support themselves.

Mr Murphy is right.

We don’t need the kind of people who hawk around the globe in search of the lowest tax regimes.

Instead of grubbing around for such money, the UK has enough endeavour and ideas to generate its own wealth that it can share out amongst its own citizens.

The foreign millionaire bankroller is a fantasy and delusion. It didn’t work in Ireland, and it won’t work here.

lol…benM obviously does not support Chelsea

@25 BenM: “The foreign millionaire bankroller is a fantasy and delusion.”

So why are you getting so upset, if millionaire bankrollers are illusory? Live in your fantasy world, should you so desire. Reality demonstrates that they exist.

If foreign millionaires move to the UK and pay UK taxes, not necessarily income tax, we benefit. VAT is almost an international tax, so millionaires would be paying something like it elsewhere.

If millionaires move to the UK but do not choose to invest in the UK economy, we have lost nothing.

Gamble a bit, because there is nothing to lose. Some millionaires who move to the UK may take a punt and help fund UK companies.

Luis,

The Scott Adams article is fascinating, but I’m surprised nobody else has commented on it. For those of you who can’t be bothered to read it, he is asking us to consider more creative ways of taxing the rich. Come on everyone, there is enough knowledge here to come up with some decent ways……….

@28 Planeshift: “For those of you who can’t be bothered to read it, he is asking us to consider more creative ways of taxing the rich.”

The proposition fails because so few of us are rich enough to think like them. I am immensely rich by international standards, comfortable by UK standards. But I do not have a clue what incentivises or disincentivises the filthy rich.

I have followed the conduct of Bernie Ecclestone for years and find his conduct bizarre. He made deals with his friends that were costly to them but privately is very generous. I just don’t get it.

Well, yes, students cost us money, rich people make us money by paying taxes…

Tim Worstall do you bother reading what I said? Doesn’t look like it.

Oh, and George Monbiot today:

At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil plc pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match our rate of 28%. But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.

http://www.guardian.co.uk/commentisfree/2011/feb/07/tax-city-heist-of-century

Of course Osborne isn’t turning this country into a tax haven!

Of course Osborne isn’t turning this country into a tax haven!

He doesn’t have to, according to the IMF Brown already did.

http://www.guardian.co.uk/business/2007/apr/22/theobserver.observerbusiness1

Never enough though is it.

@30 Sunny

You and Monbiot have (unsurprisingly) misunderstood the law. It doesn’t apply to corporations – transfer pricing laws deal with that.

Regardless, I thought we wanted investment into the UK? I thought we also wanted extra consumer spending? Surely making it easier for rich people to settle in the UK and them lock them into paying UK taxes is a good thing??

It feels to me though that Richard Murphy and Sunny et al are more motivated by jealousy surrounding the word “rich” than by what those people could actually do for poor people in the UK – through the taxes they pay and more importantly the jobs they will create.

30. Sunny Hundal – “Oh, and George Monbiot today: But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.”

Even assuming that George Monbiot has correctly understood the law, isn’t this exactly what Richard Murphy wants – that companies pay tax in the country where the substantive transaction takes place? Why should companies pay taxes in this country on transactions that take place in other countries?

“Of course Osborne isn’t turning this country into a tax haven!”

Of course trying to attract wealthy investors to Britain by loosening visa requirements is not the same as making Britain a tax haven. Canada does it and no one thinks they are a tax haven.

@33….exactly, this is precisely the tax system Murphy wants with his country by country reporting. Tax is paid where the profit is made.

Lets get something right, Labour would have done it, only they were to busy trying to get money by offering Lordships, I see Lord Paul has not been seen for while, remember him the bloke who offered to pay off labours debts.

The open door policy well they may as well be rich now, as poor, if your poor now the UK is not the place to come with welfare cuts is it.

33, 34

watch that point disappear without a trace ….

@32

…the taxes that they pay and jobs they will create

But multimillionaire business owners don’t, as a rule, set up shop in the country in which they are domiciled, they set up shop where the labour is cheapest, and that ain’t here. They may pay a token amount of UK tax, but the profits will be taxed in the Cayman Islands or wherever.

They may employ a house staff, but as that industry has been cornered by agencies that can import cheap foreign labour, I don’t see how that will help – irrespective of the fact that the number of jobs there will run into the thousands at most – hardly going to make a dent in 3 million unemployed, is it?

Ah but they do donate to the ruling party, do they not. thats ok then

37, 38

I have no idea how successful the rules will be, but if you read the FT article you will see these visas are designed for people who are going to invest in the UK, as opposed to just rich people who want to live here. Investment creates jobs, drives up wages etc. Yes please.

the devil is in the detail of what counts as investment, I suppose

@37

“multi-millionaire foreigners who are prepared to invest their money in Britain”

The point is made here in this very piece. They have to invest here or they don’t get the visa.

@40

“…prepared to invest in Britain” can mean so many things though. They could open a couple of shops while keeping most of the business overseas. One could argue that they qualify as “investing in Britain” just by buying a house here.

@41 Exactly. I doubt we’ll suddenly see an outbreak of factories and real businesses, just more dodgy money sloshing round the City benefiting only the leeches and driving property prices higher

@42

Even if an investor came here and did nothing more than open up two shops and pay a token amount of tax (which is not what these changes amount to) that would still be two more shops, more jobs and more tax than we already get.

@43 and yet another widening of the breach in how regulations apply to the rich and the poor. Shall we cut taxes for billionaires to one percent so all of them will move here? A couple of jobs or shops in exchange for another corporate crook isn’t a bargain a country should contemplate

‘@ 44. Schmidt

Your nemesis Mr Osborne usually presents a pretty easy target. However, this is not one of them as what the government are doing is the right thing. This is not about hawking around the world offering the super-rich a low-tax place to live. Monaco and Switzerland already fulfill that role and we can’t compete in that niche market. All that is happening is making it easier to move here for people who want to move somewhere anyway. We would be as well trying to get them to come to the UK, and I do not see any downside.

If your rich your welcome, if your poor piss off, sounds good to me… Real New Labour.

Richard – I know that court decisions over the last 30 years may have given that impression, but last time I looked the right to live in the United Kingdom wasn’t a universal human right.

People here have some funny ideas, firstly this idea that just because these people are required to invest that justifies the whole thing, it doesn’t; tell me, would it be a good thing if these people were investing money into Enron for instance? There are productive investments and unproductive investments and rich people tend to invest in unproductive things. Employing people to gold plate rich peoples toilets is not productive, employing people to build infrastructure that we all use is productive but rich people don’t invest in that because it doesn’t give quick returns.

Secondly this whole idea that ‘rich people will pay more tax so it’s all ok’ is mental, they’ll also use our postal services, drive on our roads use police and fire services, sometimes they exploit these services far more than poor people. If a rich persons investments fail and they go bankrupt that becomes a public liability we have to pay for that so where is this huge benefit here?

Rich people are highly mobile so they’re not going to pay our VAT when they can buy goods from abroad and bypass our tax system, really thats just silly.