A useful little example of the Laffer Curve in action here – Sir Jim Ratcliffe, of Ineos, is suggesting that he’ll leave the country thereby saving himself up to £4 billion tax.
Ya, boo, sucks! of course, how dare the rich not pay their fair share? Except, again of course, there are at least two definitions of fair to consider here. What we think it is fair they pay and what they think it fair they pay. The two often enough coming into a teeniest little conflict.
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] A prominent Brexiteer and Britain’s richest man, Sir Jim Ratcliffe, is set to quit the United Kingdom in a bid to save billions in tax, it has been reported. The 66-year-old, who was knighted less than a year ago for his services to business and investment, is reportedly planning to save up to £4bn with a move to Monaco. The country – famous for its yacht-lined harbour, upscale casinos and the prestigious Grand Prix motor race – is a well-known tax haven. And Ratcliffe has been working with PwC on a tax avoidance plan, which could also benefit two senior executives at his chemicals company Ineos. [/perfectpullquote]This is just that Laffer Curve in action of course. The statement being that a tax rate can be too high to maximise revenue just as it can be too low to do so. And here we’ve a nice example, demanding £4 billion from Sir Jim seems to be too high a rate as instead of getting it the Treasury will get nothing. We’re over the revenue maximising rate in this specific example. We’d get more with a less confiscatory tax rate.
There’s much more to the Laffer Curve than just this, we can talk about growth rates, incentives and all the rest. But we do still come back to this basic idea. What we think they should pay might well not be what they think they should. Which makes it a little difficult to determines what’s a fair share, doesn’t it?
The language we use matters - it provides clarity to our own thoughts and enables…
It is now generally acknowledged that the structure of the NHS needs to be overhauled…
In the film Apollo 13, a loss of oxygen causes the crew to start inadvertently…
There's an idea out there which seems intuitive but then so many ideas do seem…
When we think about the darkly opaque goals of modern central bankers as they relate…
As the papers recently filled with the distressing images of desperate souls looking to escape…
View Comments
And lots of people will say good riddance then bemoan the lack of investment and innovation in the UK.
Doesn't Mr Radcliffe realise he could have had his very own 5-mile stretch of HS2 for that kind of money? Why on earth would anyone give up all that and head for Monaco?
You could always forbid him to move. At some point progressives will realize that free range citizenry is incompatible with a progressive and just society. The Russians and Chinese already understand this.
But... but... freedom of movement is a fundamental human right! Only mouth-foaming racists want to ban people's freedom to move where they like.
I don't really understand why he is doing this.
He's so rich that the tax he pays won't make any material difference to his lifestyle.
Surely, if you have that much money, one of its advantages is that you can afford the luxury of living anywhere you please, rather than having to move somewhere as dull as Monaco just because your tax accountants and lawyers tell you that you should just in order to save some money that you won't miss anyway.
True, but maybe he wants to do something useful with his money (like BillG) rather than watch poiticians piss it up the wall.
"Somewhere as dull as Monaco." Pray sir, where do you live that is so exciting by comparison? A barrio?
Monaco might be nice, but it is pretty dull for anything other than a short visit.
You see and do 100 times as many things in London, for example.
Amazing how many people assume that someone else should be happy to give up a huge sum of their money because they have "enough". Funny how the line of "so much money why do you mind getting fleeced" is always somewhere above your level.
If I'm worth $1M and want to get to $2M or even $5M, sure that's reasonable. But that bloke worth $100M, why does he want any more?
Three facts of life regarding taxes: (i) other people never pay their fair share of tax; (ii) those who say this are paying too much; and (iii) the same people always have firm ideas how others should spend the after-tax balances.