Wealth tax will drive out wealth
Published at 12:11, Wednesday, 12 September 2012
WHEN will our politicians learn that taxing people until the pips squeak neither makes fiscal sense nor aids long-term economic recovery?
Thankfully, Deputy Prime Minister Nick Clegg’s ridiculous proposed “emergency wealth tax” is unlikely to see the light of day – but it is worrying that the Lib-Dem partners of the Coalition seriously believe that such a tax should be introduced.
Mr Clegg wants to impose an “emergency”, and therefore supposedly temporary, tax on wealthy people’s assets (including yachts and, for all we know, MPs’ duck houses) as part of what he calls the “economic war” in which according to him we as a country are currently engaged.
By calling it an emergency wealth tax, and by employing soundbites which refer to wars and battles, Mr Clegg and his supporters are implying – with not much in the way of subtlety – that the “wealthy” have until now been either shirking their national duties, rather like a bunch of conscientious objectors, or selling black market nylons and tins of Spam like Private Walker from Dad’s Army.
Leaving aside the practical problems of how such a wealth tax could be put into place quickly, efficiently and fairly (if that isn’t an oxymoron), Mr Clegg fails to address the fact that other countries, including Sweden, have recently attempted – and quickly abandoned – just such wealth taxes.
And the reason is simple: excessive taxation, especially in this globalised world, leads to wealth creators taking their businesses to countries which operate more tax-friendly regimes.
As Matthew Sinclair, the chief executive of the Taxpayers’ Alliance said on the subject, not only are wealth taxes unfair, but they lead to “capital flight on a massive scale”. And that is something no sensible government should wish to be responsible for.
This week, Business Secretary Vince Cable (widely tipped as Mr Clegg’s successor as Lib-Dem leader if he is ousted before the next general election), waded into the debate, by announcing that he has “chemistry” (yuck) with Shadow Chancellor Ed Balls and would be happy to work with Labour on issues such as a wealth tax and a mansion tax.
Targeting the wealthy and the nation’s wealth producers has long been the knee-jerk reaction of the Left in times of national economic fragility. It is classic, unoriginal, politics of envy stuff; and is as economically unsound and ill thought out as the provocative name of Mr Clegg’s proposal suggests.
The top one per cent of Britain’s earners already pay a disproportionate 27 per cent of taxes. Adding to the tax burden in times of economic hardship is something which surely should only be considered when costs have been cut, not as an alternative.
The current “economic war” will not be won by taxing the wealthy more than they are already. It will be won by prudent cost cutting across the board.
Put simply, government needs to spend less, not tax more.
Published by http://www.nwemail.co.uk
Have your say
Income tax was introduced as just such a temporary measure and at a maximum rate of 10% . Is anyone naive enough to believe that a wealth tax would ever be temporary?The message of a wealth tax and indeed of the 50% rate of income tax is clear - if you are successful and a big earner, the UK doesnt want you. Go away or we will confiscate a large part of your income and now a part of your wealth as well.
Finland is in Scandinavia along with Denmark, Sweden and Norway the latter is of course outside of the EU and as is better placed financially as a country than any of it's EU neighbours in Scandinavia.The government steal tax from everyone's pockets at every opportunity under the pain of jail ... all governments do this no matter what their political makeup. As for the current bunch how can anyone call them Tories when 50% of them are Liberal Democrats.
We really do have a government taxing us to the hilt and then some that not a living soul upon these islands voted for and no-one, no-one is out on the streets trying to remove them from office.
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