As the FT has noted this morning:
Italy has doubled a flat tax on the foreign income of new residents, in a blow to rich expats seeking to flee the prospect of higher levies elsewhere in Europe.
As explanation, they add
Prime Minister Giorgia Meloni's cabinet on Wednesday approved a rise in the annual levy on overseas income for new tax residents in Italy to €200,000. The current €100,000 tax incentive, while popular with wealthy individuals, has been controversial among Italians, especially in the business capital Milan, where the recent influx of the super-rich has been blamed for a sharp increase in real estate prices and other rises in living costs.
There are three obvious comments to make.
The first is that we need to tax the wealthy because they are wealthy. Their wealth disrupts economies, and we cannot afford that.
Second, people realise that even if it seems it takes a great deal to persuade politicians of the fact.
Third, luring unproductive wealth is very destructive to a society. We know that in the UK now, we have done it for far too long.
So, how should we react?
First, the non-domicile rule in the UK really should go as the UK has promised. Italy helps us achieve this: there is one less place to go.
Second, we should tax the income and gains derived from wealth a lot more. The Taxing Wealth Report 2024 explains how.
Third, we need to tackle the tax haven abuse that the UK has promoted for so long. They need to be brought under control, and their abuse has to be ended. They exist to exacerbate inequality in the world and to undermine the right of the state to tax. They have no role left to play that is of any value to humankind;
Labour could do this.
Will it?
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Simple question… Will the Freeports, that the Tories were so eager to put in place, just provide an ‘onshore tax haven’ for the wealthy?
It is hard to tell as yet
Genuine answer – we cannot be sure – but it is possible
What – and cut off a source of their potential political funding?
I can’t see ANY political party doing that until the party political funding quagmire is sorted out once and for all.
Sorry to sound like a stuck record.
Keep banging that drum Richard. The message is getting through to some in power, and there’s small army of us out here trying to spread the word.
“Expats”, the FT calls them. They’re economic migrants.
What’s the logic here: are you saying that if you tax wealthy people and corporations more then they become less wealthy, have fewer resources at their disposal, and that there is less economic disruption. Personally I’d favour taxing them at the social cost of that disruption, if you can work it out.
But why does the same logic not apply to the UK’s biggest organisation?
It does
And the reason for taxing is the social cost of that disruption
But no one will ever get that precise calculation right: it will always be an estimate
I am more than happy if people chose to live in the UK…. as long as they contribute. So I welcome the healthcare professionals and most working folk…. and I take a broad view about what contribution might look like.
But the super rich who arrive and do nothing except price me out of property and things in general add nothing. Forget about their money, it’s what they do that matters.
Are the ‘Super rich’ really buying properties in the same areas and same price ranges as you, Clive, really?
Taxing the gains / income on wealth is all very well, but you need to be able to define what ‘wealth’ is, which we struggle to do fairly. And if the taxes on wealth aren’t consistent then it will lead to probkens.
I happen to know where Clive lives
The answer might be yes, maybe
But you are trolling, and you are deliberately ignoring the fact that all proves have been dragged up by their actions and their portfolios
I’m at a loss to understand why Reeves wants foreign investment in the UK, especially in what should be public services. Any profits will simply go back overseas. Far better for the UK govt to invest in UK.