Yesterday was fairly busy. As a result of Labour's non-dom announcement I don't think I have ever done more press interviews, and still it was quotes lifted from the blog that got in much of the media. The interviews were not all UK based either: the furthest away was in Hong Kong. Qatar featured as well.
The Guardian got the message right:
For tax campaigner Richard Murphy, reforming the non-dom laws would be the single biggest contribution to tax justice in the UK.
“The significance of this cannot be overstated. For over a hundred years the UK has run a two-tier tax system.”
For campaigners like Murphy, the non-dom laws are a pure tax haven device. By luring the world's super rich away from home, campaigners say the UK effectively has done for income tax what Luxembourg has done for corporation tax — deprived other countries of revenues in exchange for a small percentage of the profits.
Fundamentally, the desired change is about principle, not money.
It's shocking that so much of the media and so many politicians have no understanding of this. Principles don't matter, it seems.
Then there was Mark Littlewood of the Institute of Economic Affairs, with whom I debated on television, who claimed that the domicile law was legal and had been since 1799 so what was I worried about? I pointed out slavery was also legal in 1799 and that the law was a poor arbiter of morality. The time for reform has come, as it has on so many issues over the last decades where values now repugnant in modern society are swept away.
Money has no morals though. As the Telegraph reported, there was a 'City backlash at Ed Miliband's non-dom pledge'. Tax havens always squeal when under threat.
But the FT got the argument for the City right, if only they would follow its advice:
On the grounds of principle there is nothing for the City to defend here. The Guardian might have reported that:
This time though I am willing to believe it is different. And I also happen to believe that Labour committing to this might help it happen.
Principle's matter - and people respect them. The City may not like this but up and down the country the 99% will. And in a democracy they count. The time for change on this one has arrived.
It was a good day's work and I am pleased to support Labour on this issue because I think it's got it right.
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Well done Richard it is amazing to see the influence your dogged persistence and unique ethics are having on Britain today. You give hope to all of us about the possibility of influencing change.
“Then there was Mark Littlewood of the Institute of Economic Affairs, with whom I debated on television, who claimed that the domicile law was legal and had been since 1799 so what was I worried about? I pointed out slavery was also legal in 1799 and that the law was a poor arbiter of morality.”
What a superb riposte!
Well done Richard. Obviously not over the line yet and still much work to do.
Richard, well done. On the reaction of the City and “the usual suspects” (how CAN idiots – used advisedly – like Mark Littlewood trot out such bilge without blinking or blushing?), you might do worse than play for them that wonderful clip you posted recently of a “rant” by a member of the Public Accounts Committee.
The real significance of the clip is the identity of the “ranter”, who is surely one Richard Bacon, Conservative MP for South Norfolk. If an old school Shire Tory can deliver such damning criticism of the non-dom stitch-up, it would be wise of Cameron and the City to wake up and smell the coffee, because this argument has already been won, even within sections of the Conservative Party.
I’ll dig it out again
Thank you for your commitment and persistence in campaigning on the non-dom issue Richard, it is high time this aged and discriminative law was gone for good as it has no place whatsoever in a modern 21st century democratic nation.
After 8 years of campaigning, how does it feel to finally be heard?
It’s OK
But there’s so much more to do
Richard, they are already backtracking. Just take a look at the Daily Mail. It seems the rich (who control the media) don’t like to have their goodies taken from them so they are already threatening Labour if they dare to do this. Do you think Labour will renege on this once they get in or water it down to make it virtually useless?
I am certain the domicile rule will go
The detail of the temporary residence rule has to be worked on – but they’re being harsher than me right now
I think we all know that some sort of replacement for temporary residents will be needed. I said as much on this blog on the 25 March when I wrote …
“It is unsurprising that the UK has a policy of this kind [non-dom status] because most countries offer something to try to entice people. The surprise is that you can use the regime for decades.
I can see exactly why the UK might want to attract high net worth individuals to the UK so that they can set up a business and spend a few years in the UK doing so creating jobs for UK residents.”
The real surprise is that the Labour Party hasn’t even started to think through the implications of a key policy. They are suggesting a new arrangement for temporary residents that will last no more than 2-3 years. It is quite clear that such a time period is completely inadequate for an undergraduate degree. It doesn’t take a genius to realise that if you start a degree in September of one tax year and it lasts for 3 years it will end in June of the fourth tax year. 4 year degree courses are common at Scottish Universities spanning 5 tax years, so anything less than 5 tax years is really a non-starter.
No doubt they will eventually come to that conclusion in due course when they aren’t trying to make political capital during an election campaign.
On the other hand they could look to the USA, which is hardly known for a benign tax system. They have a far simpler approach treating foreign students as non-resident throughout their course of study. This approach is far simpler for the individual to understand and more generous than the non-dom regime because the student doesn’t need to pay tax on offshore income or gains when brought into the USA.
I have expressed some scepticism as to the Labour front benchers’ commitment to closing the tax gap, but I will concede that Ed Milliband is making the right noises here.
The risk with taxing non-doms isn’t that they’ll leave and withdraw their investments – they dont invest! Their ‘investments’ are a drag on the productive economy, purchasing rents and bidding up asset prices.
No, the risk of Gotterdammer-non-dom is that their departure will puncture Britain’s asset price bubble: and Labour has sided with those who will benefit from that.
I am speaking as someone who comes from the all taxation is theft camp, I think you are naive.
Firstly when the top rate of tax was reduced, receipts have risen substantially, the top 1% of earners in 1997 paid 20% of all income tax receipts, 2007 24.4% and 2013 a staggering 29.8%.
The reason that people want to declare in the UK is that we have a stable and relatively ethical political and business culture and I am sure the risk reward factor means they maybe in some circumstances declare in the UK, knowing their money is safe.
However when the pips start squeaking what is the point of paying 55% of your money to a thoroughly wasteful and incompetent government.
Every single £, $ and € kept out of the politicians and civil servants is to be celebrated as private enterprise will use the money to far greater effect creating jobs, industry and commerce. Real jobs in other words.
I’m sorry
I ignored everything after the first line
Anyone who thinks that has no serious analysis to offer
And you certainly fail to note that growing tax paid is the result of massive increases in inequality
You want some analysis the let me quote Chris Snowdon of the IEA.
“The most striking aspect of this table is how little change has taken place over the last 25 years. The poorest five deciles have seen their share of income increase by one percentage point, with the exception of the bottom decile whose share has remained constant at 3 per cent. The richest five deciles have lost one percentage point, apart from the sixth decile which has remained constant and the top decile which has lost two percentage points.
This is hardly indicative of sky-rocketing Victorian inequality. On the contrary, there has been a modest shift in the distribution of income from the richest half to the poorest half. We can argue about whether the current distribution is ‘fair’ or not, but the distribution has clearly become slightly more, not less, equal.”
http://www.iea.org.uk/blog/the-rich-versus-the-super-rich
Except almost everything Snowden says is contradicted by a wide variety of reliable data sources
“Every single £, $ and € kept out of the politicians and civil servants is to be celebrated as private enterprise will use the money to far greater effect creating jobs, industry and commerce. Real jobs in other words.”
This garbage is worth repeating to show that there are people out there that think there is a fundamental difference between private and public money and that the sort of capitalism we have now is spreading wealth -Cloud Cuckoo Land is a place on earth!
Richard,
I too have spent today reflecting, heavily, on yesterday. Despite the unfortunate past blundering of Ed Balls, the news of non-dom revocation being on the agenda is, simply, staggering. Let us keep driving forward in our reforms today, while reflecting, again, on the events of yesterday, in order to make an even bigger impact tomorrow. This, of course, requires planning today!