Comments on: Domicile: Pragmatic question 3: Why do we want to give a tax subsidy to the City? http://www.taxresearch.org.uk/Blog/2008/02/14/domicile-pragmatic-question-3-why-do-we-want-to-give-a-tax-subsidy-to-the-city/ Richard Murphy on tax and corporate accountability Wed, 07 Jan 2009 22:22:41 +0000 http://wordpress.org/?v=2.6 By: Tax Research LLP http://www.taxresearch.org.uk/Blog/2008/02/14/domicile-pragmatic-question-3-why-do-we-want-to-give-a-tax-subsidy-to-the-city/#comment-383656 Tax Research LLP Sun, 17 Feb 2008 15:11:17 +0000 http://www.taxresearch.org.uk/Blog/2008/02/14/domicile-pragmatic-question-3-why-do-we-want-to-give-a-tax-subsidy-to-the-city/#comment-383656 The evidence right now is that the City has destroyed vast amounts of wealth. Tell me why we need high-paid, freeloading, reckless gamblers as the basis for our economy would you? I stress: I am pro-market and know the value of the financial sector. Much of the City is neither: it is about short term opprtunism. That is as I decribe it. Most of the non-doms seem to be in this so called 'investment banking' sector that appears to have created nothing of lasting worth. What benefit can it bring? Equitable taxation, undertaken openly and accountibly creates open markets. These create real value. Why not try promoting them instead? The evidence right now is that the City has destroyed vast amounts of wealth.

Tell me why we need high-paid, freeloading, reckless gamblers as the basis for our economy would you?

I stress: I am pro-market and know the value of the financial sector. Much of the City is neither: it is about short term opprtunism. That is as I decribe it. Most of the non-doms seem to be in this so called ‘investment banking’ sector that appears to have created nothing of lasting worth.

What benefit can it bring?

Equitable taxation, undertaken openly and accountibly creates open markets. These create real value. Why not try promoting them instead?

]]> By: Phil Packer http://www.taxresearch.org.uk/Blog/2008/02/14/domicile-pragmatic-question-3-why-do-we-want-to-give-a-tax-subsidy-to-the-city/#comment-382331 Phil Packer Fri, 15 Feb 2008 20:22:41 +0000 http://www.taxresearch.org.uk/Blog/2008/02/14/domicile-pragmatic-question-3-why-do-we-want-to-give-a-tax-subsidy-to-the-city/#comment-382331 This is another classic. The pragmatic answer to the question is of course "because the City is the heart and lungs of our economy, financial services are the heart and lungs of our economy, the City generates a vast portion of the UK's tax take and if we undermine the non-doms we will get less tax because the City will suffer." You have to understand, Richard, that financial services are a mobile industry. Investment banks enter into tax equalisation agreements with their employees. They bring employees into the country for projects. If the personal allowance is abolished for non-doms, that costs the banks so they will simply do the projects elsewhere more cost effectively. Common sense (if you think about it). At the management level, more than 50 percent of the bankers are non-doms; these are the guys generating the wealth so we actually need them here. We cannot take a needless risk in hammering these people especially at a time when the economy is heading for trouble. As for UK trained staff, I wish I had your confidence in our education system! This is another classic. The pragmatic answer to the question is of course “because the City is the heart and lungs of our economy, financial services are the heart and lungs of our economy, the City generates a vast portion of the UK’s tax take and if we undermine the non-doms we will get less tax because the City will suffer.” You have to understand, Richard, that financial services are a mobile industry. Investment banks enter into tax equalisation agreements with their employees. They bring employees into the country for projects. If the personal allowance is abolished for non-doms, that costs the banks so they will simply do the projects elsewhere more cost effectively. Common sense (if you think about it). At the management level, more than 50 percent of the bankers are non-doms; these are the guys generating the wealth so we actually need them here. We cannot take a needless risk in hammering these people especially at a time when the economy is heading for trouble. As for UK trained staff, I wish I had your confidence in our education system!

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