Written By:
Marty G - Date published:
7:26 am, January 21st, 2010 - 70 comments
Categories: class war, tax -
Tags:
A commenter asked an interesting question yesterday:
of the countries that are wealthier than us, how many have aligned their top income, corporate, and trust tax rates? And which countries are they?
Well, I did some looking and here are the countries with higher GDP per person than us and their top tax rates:
Personal | Corporate | Personal | Corporate | |||
Australia | 45.00 | 30.00 | Italy | 43.00 | 27.50 | |
Austria | 50.00 | 25.00 | Japan | 40.00 | 39.54 | |
Belgium | 50.00 | 33.99 | Korea | 35.00 | 24.20 | |
Canada | 29.00 | 31.32 | Luxembourg | 38.00 | 28.59 | |
Denmark | 26.48 | 25.00 | Netherlands | 52.00 | 25.50 | |
Finland | 31.50 | 26.00 | Norway | 25.30 | 28.00 | |
France | 40.00 | 34.43 | Spain | 27.13 | 30.00 | |
Germany | 45.00 | 30.18 | Sweden | 25.00 | 26.30 | |
Greece | 40.00 | 25.00 | Switzerland | 11.5 | 21.17 | |
Iceland | 22.75 | 15.00 | United Kingdom | 40.00 | 28.00 | |
Ireland | 41.00 | 12.50 | United States | 35.00 | 39.10 |
(sources income, corporate, seems most countries don’t have a seperate trust rate. When comparing rates between countries, you need to bear in mind that many countries have state taxes and/or pay social security tax additionally to income tax)
So… none of them have aligned their top tax rates. Why not, if it is such a great idea? Why, if we want to catch Australia, would we adopt an idea that the Aussies and everyone else have rejected? The fact that not a single one of the countries that is richer than us has aligned its top tax rates destroys the argument that alignment is both good and necessary, which has until now been held up as an undoubtable truth by the Right and accepted as such by the media.
Look, tax avoidance is a problem, but not a huge one. Not one you go throwing out your entire tax system over. The solution isn’t to let the tax avoiders win by giving them all a big tax cut and leaving the rest of us to bear the burden. We should just close the loopholes that let the bludgers pretend their personal income is trust or business income. They are ripping the rest of us off and we shouldn’t allow it. If people were using loopholes to get benefits they shouldn’t, would we change the rules to make it OK? Why have different standards for the well-off?
You have to remember that this clamour for reducing the top tax rate by 8% to align it with the corporate rate is all part of a campaign by the wealthy to reduce their taxes that has been going on for decades.
Of course, they always dress it up as good for the economy. Back in the 1980s they promised us tax cuts for the rich, paid for by asset sales and slashing public services for the poor and the middle class, would lead to more spending creating jobs. But we found out that trickle down economics doesn’t work.
Now, they say that people will only work hard if tax rates are lower and it alignment will eliminate the false economy of tax avoidance. Even if small changes in tax rates change behaviour (and I don’t think they do), most people won’t be getting a tax cut anyway – only 22% of people earn enough to pay tax in the top two brackets. All lowering the 33% and 38% income tax rates to 30% will do is put a few tax accountants out of work and make the rich much much richer.
John Key stands to pay $26,000 a year less on his PM’s salary alone. The CEO of Telecom would make a whooping $400,000. It will be the poor and the middle class bearing the cost, again, this time through higher rents and GST.
We are being sold a con once more by the monied elite. Will we buy it?
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
The server will be getting hardware changes this evening starting at 10pm NZDT.
The site will be off line for some hours.
A couple of things to consider.
A lot of the countries on that list don’t have trust tax rates, because the trust is a concept that does not exist under their laws.
And simply comparing personal and corporate tax rates doesn’t tell the entire story about who in society is bearing the tax burden. For example it is often said that the poor are harmed more by increases in sales taxes, because they spend most of their income on necessities. The UK has a VAT rate of 17.5%, whereas our GST is 12.5%.
Also, unlike NZ, most countries don’t allow shareholders to receive imputation credits, meaning that in most countries corporate profits are effectively taxed twice.
Also, shutting down loopholes may sound easy, but the IRD has dozens of people devoted to doing this. The more laws they pass the more complex the system becomes, and the more doors tax accountants find to open. Arguments about equity aside, there are some good reasons to look at aligning tax rates, to discourage avoidance schemes.
I’m not arguing in favour of the proposed reforms, because I haven’t digested them yet. But comparing our tax rates to those in other countries probably doesn’t help a lot, unless you look at their tax systems as a whole.
You’re missing the point. It’s not about distribution of taxation it’s about the argument for alignment.
We’ve been told that alignment of the top tax rates makes sense by the TWG and the media.Here’s the Herald today:
“Sensibly, the group wants the top personal, company and trust tax rates aligned”
But it turns out no country richer than us does it. So why is it so sensible? Well, it sounds sensible to the ones who get the massive tax cuts, I’m sure.
… and just to be absolutely clear about this, if you’re on PAYE, don’t have access to company profits, aren’t a beneficiary of a trust, don’t own an investment property and aren’t in the top tax bracket you will be worse off due to the impact of an increase in GST.
I would suggest that definition covers most people in New Zealand.
the fact other countries aren’t aligned doesnt mean there tax systems are right, most tax systems are leaky
I’m not saying their tax systems are perfect. But it destroys the argument that alignment is self-evidently good.
Now, how about some actual evidence that alignment works (not work as in ‘gives a giant tax cut to the rich’ but works as in ‘lifts economic performance’), considering no richer country than us has seen fit to adopt it.
lots of countries have good economic performance despite bad tax systems. being part of europe means they have access to rich markets to sell to, having lots of natural resources means they can make money despite inefficient tax systems, that doesn’t mean new zealand shouldn’t pursue a perfect tax system.
The proposals of the TWG will result in a decreased level of equity in New Zealand as more of the tax burden is shifted from rich to poor. Since when is this a “perfect tax system” – or even a desirable one?
and you’re assuming that alignment is perfect despite no evidence and not a single one of 22 richer countries having adopted it.
That sounds a lot like religion rather than rationality.
If we’re so worried about tax avoidance by the rich, why not align the company and trust tax rate to the current highest rate instead of the proposed vice versa?
I’d agree with a lot of that – especially having to look at tax systems as a whole.
However the point of the post was to look at the simplistic argument (ie idiotic PR soundbite) that we should align our tax rates.
Any argument which pupports to “broaden the tax base” is fact arguing for spreading more of the tax burden on to lower and middle income earners. This is why consumption-based taxes like GST are so favoured by the right.
I have to agree with Scott on the loophole issue though – the tax loopholes are longstanding and not easy to solve – its not as if these were deliberately written in to promote tax avoidance. And in addition to the IRD compliance people working on them, there has been enough good intentioned legal and tax experts in Parliament, that if were a simple thing – it could have been solved. Peverse incentives can be created with the best of intentions – i.e. law of unintended consequences.
I however, sympathise with the argument that just because some higher earners are avoiding tax, we shouldn’t just let them off. As I said earlier, increasing the corporate, and trust rates closer to the personal rate, perhaps with tax credits for R+D, and for firms that pay all staff at least 20% above the minimum wage.
On closing the loopholes. The biggest one seems to be family trusts. these didn’t always exist, so I suspect there was a law change at some point to assist them.
I’m no expert on trust law but there must be a way to ensure they are for genuine purposes, not just tax avoidance.
Family trusts aren’t the evil you make them out to be. In my experience as an accountant, the vast majority exist for genuine reasons. One of the main purposes of a Family Trust is asset protection, not income re-distribution.
Is there any genuine reason for them to not be taxed at the top personal tax rate?
Yes. Under law, they aren’t natural persons.
That’s not a logical reason, fizzleplug. Why should a legal person not have the same top tax rate as a natural person?
I thought writers on the Standard were often trumpeting the need for New Zealand to be more like Scandinavian countries….
yeah we are…. Oh lolz, you think that the Scandinavians pay less tax on their income than us.. Scribe, please try to remember that when you look at the Scandinavian top income tax rates they don’t include social security taxes that everyone pays.
Social security taxes are a mix of tax on income and payroll tax. They pay for benefits, pensions, and in some cases national health insurance, which we just pay out of the consolidated fund.
The systems are too complex to easily compare to here but here’s info on the Swedish system:
http://en.wikipedia.org/wiki/Social_Security_%28Sweden%29
Marty,
This post is about aligning personal and corporate tax rates. The fact that Scandinavian countries have closely aligned rates was my point, not the actual top personal rate (which is not the point of this post). Having written it yourself, I would have thought you’d have known that.
oh, I thought you were talking about the rates.
No the Scando rates aren’t closely aligned.Finland and Norway’s are way off, Sweden and Denmark’s are closer.
None of which proves any economic argument for alignment.
Russia & China are in Scandinavia ?
Also should add that we should do apples to apples comparison, Marty’s figure of 45% for Australia only applies on income > AUD $180K, I do wonder what incomes are needed in those other countries he lists with higher rates.
This side of the ditch we pay 38% on income >NZD$70K (AUD$55K) and in Aussie they pay 38% once they >AUD$80K / NZD$100K
“Marty’s figure of 45% for Australia only applies on income > AUD $180K”
irrelevant. We’ve been told that the top tax rates must be lowered to align the top rates.
If that were true we should surely expect at least some of the countries that are richer than us to have aligned their top rates.
Incidentally, (and this will come in relevant in a couple of hours) how would you feel about adopting the Aussie income tax rates and thresholds?
Tangent …
I see there is a proposal to remove depreciation on buildings. If so, then how does one get to recover the expenses of buildings when working out profit? And make no mistake, buildings depreciate and need replacing and cost. Just like any cost for any business.
I just dont get it. When in business you take all costs away from all income to work out profit. It seems the govt wants to disallow certain costs. Perhaps we also dont count the income received which relates to that cost?
on whether housing depreciates. The TWG had a discussion of that in one of its sessions.
Sure, the physical house wears out and needs maintenance but as an economic asset they tend to appreciate.
The underlying land appreciates. The buildings wear out and depreciate. Ask anyone with an old house or commercial building. It is a very real cost.
Key is only doing this (and I dont doubt one bit there has been some puppetering going on) to avoid the capital gains tax political nightmare..
But anyways I aint read the thing and am just banging on based on media reports etc..
But you ARE taxed on the depreciation claimed if and when you sell the property at a hight than purchase price.. It seems that the depreciation argument is s red herring.
The proposal is to remove depreciation allowances that aren’t backed up by real-world experience. For instance claiming a 2% straight-line depreciation would result in a building being worthless after 50 years – and if this was true, landlords would then be faced with the cost of demolishing it and building a whole new structure. Clearly this isn’t what happens in the real world.
As I understand it, under the new rules the costs of maintaining the building would still be deductible, but you wouldn’t simultaneously be able to claim maintenance and depreciation, as it’s the maintenance that is preventing the structure from depreciating in real life.
ahaa.. so effective replacement cost (depreciation) is accounted for now through maintenance. Capital replacement of the building therefore now becomes a maintenance item.
Effect of tax change therefore equals nil.
nb: if a house has no maintenance it will last no longer than about 50 years. They break down and fall apart. This is actual real world experience. Also, note that building code requires a house to last only 50 years.
As I understand it, there is a significant change in the way depreciation is treated and the effect is that it becomes non-claimable.
For example, if there is a 2% depreciation allowance on a $300,000 house (excluding land) then there is a $6,000 “expense” that can be applied to income from the property. This would disappear altogether. Any money the owner used to maintain the building would still be deductible, but this is real cash that they’ve had to spend, not just an accounting entry for the depreciation.
So there would be a material and very significant impact on the net tax position of a great many landlords. It will be interesting to see if the same rules are applied to commercial buildings rather than just residential ones ….
Ok. Methinks however that 2% of the capital value of a building is a very real annual cost, whether it comes out as maintenance or depreciation. So the net effect to tax revenue will be the same over time. Unless landlords are rorting the system.
I understand what you say regarding short term annual cashflow. But, as said, at the end of say a 50 year period the amount claimed, whether by way of depreciation or maintenance, should be about the same. Net effect nil.
Yes, that’s very much the common sense way of looking at things, and it aligns well with real life. However it’s not the current accounting view!
Under the current rules, you can claim the depreciation and the maintenance simultaneously. This means that after 50 years, you’d have a perfectly maintained building that now had a book value of $0! This is the anomaly that I understand is corrected in the TWG proposals.
When dealing with land improvements e.g. Paving, the paving is not depreciable but all subsequent costs are able to be written off in the year that the cost is incurred. Follows on the line that you have here
Why bother with working groups when The Standard can just write the policy? After all, you guys know everything.
Sorry if it upsets you Nick but in this country, we have political debate on the issues.
Maybe you would prefer it if everyone just bowed down to the supposedly superior knowledge of Government appointed taskforces.
So when you want to bake a cake do you employ a chef or political debate ?
Case in point, the government (who aren’t tax specialists, economists) have sought advice from a group of trusted experts from across the spectrum to nut out some ideas.
Bob Buckle, Faculty of Commerce and Administration, VUW (Group Chair)
Rob Cameron, Cameron Partners
Paul Dunne, KPMG
Arthur Grimes, Motu Economic and Public Policy Research
Rob McLeod, Ernst & Young
Gareth Morgan, Gareth Morgan Investments Limited
Geof Nightingale, PricewaterhouseCoopers
Mike Shaw, Deloitte
John Shewan, PricewaterhouseCoopers
Casey Plunket, Chapman Tripp
John Prebble, Law School, VUW
Mark Weldon, NZX Limited
David White, Centre for Accounting, Governance and Taxation Research, VUW
Members from Inland Revenue Department
Matt Benge
David Carrigan
Robin Oliver
Members from the Treasury
Norman Gemmell
Michelle Harding
Bill Moran
In addition, experts in various areas have been invited to attend some sessions:
Len Burman, Syracuse University, New York
Andrew Coleman, Motu Economic and Public Policy Research
Peter Conway, New Zealand Council of Trade Unions
Lew Evans, Victoria University of Wellington
Phil O’Reilly, Business New Zealand
Susan St John, The University of Auckland
These are government-appointed people, who by and large represent one strain of economic thought. Even if it was a balanced group it wouldn’t mean their conclusions are indisputable.
Poke holes in my argument if you like but don’t fall back on the desperate ‘you have no right to argue’ line.
vidiot – virtually all academics, bureaucrats and accountants.
… and so the world continues to turn …
…. a depressing number of whom are either from or previously worked for Treasury. And it’s worth noting that the support for the TWG (i.e. the actual research, running around and writing the analysis) came from Treasury and IRD officials.
It’s notable that there is no input from anyone who represents low-income workers, beneficiaries, the small business sector, mum-and-dad property investors … it’s a long list of non-inclusions.
Would you listen to “experts” if the theory that they were working from could be proven wrong?
I know I wouldn’t.
National standards anyone, Sorry for trolling, but the oppurtunities for having a lash are too great when one expert is lauded because you agree with them, and another is derided because the “theory they are working from could prove wrong”, AGW springs to mind too.
but we don’t think AGW is true just because the experts say so. We think it’s true because the experts can explain why it’s true and the counter-arguments don’t hold water.
We hold it up to the crucible of debate, which is exactly what you are opposing us doing with the TWG report.
For goodness sake, Tighty, how do you get through life without the ability to critique what you are told properly? Is it that you just believe whatever best suits your ideology? Or do you just accept the angle of the first person you hear?
and yet i can critique and do so. what if i believe that the theory the AGW proponents could prove wrong, and the critics of the national standards are also working from flawed theory, i’m not saying that the theories i ascribe to are neccersarily correct either, but i don’t rubbish the experts of opposing theories by calling them idiots etc. which seems to be very popular around here. and as for accusing me of believing what best suits my idealogy, well. pot, kettle …..
The economic theory that the TWG are basing their recommendations on has been proved, beyond reasonable doubt, wrong (hell, even some of the people who wrote the theory in the first place said it was over simplified and assumed away too much). National standards in education have also been proved wrong. AGW has been proved, beyond reasonable doubt, correct.
See, even when I posted that I knew some RWNJ would come back with that reply. I suppose it comes down to choosing to listen to the right experts. The TWG aren’t them because they’re basing their report on the wrong theory.
i disagree that the arguments you promote re AGW and national standards are proved beyond reasonable doubt, and I can see your point re the economic theory behind the TGW. my point was that “your” experts are always, always right, even if some of what they have said has been proved to be based on shonky evidence. whereas any experts “i” might agree with are always, always wrong because some of what they have said is based on shonky evidence. gee that makes me a RWNJ doesn’t it? just love the way the left argues, criticise the argument and face a negative personal label.
this discussion came out of someone sarcastically saying we shouldn’t even question the TWG’s conclusions:
“Nick
January 21, 2010 at 8:47 am
Why bother with working groups when The Standard can just write the policy? After all, you guys know everything.”
It’s not about experts always being right or always being wrong. It’s about the right to question.
i did myself was question why the experts you hold faith to are always right, while the experts quoted by those on the right are wrong, delusional, idiots and so on? it’s the dismissive nature of your responses to things you don’t agree with that leads me to believe that no one can question your beliefs. it’s this from DTB above that made me question the attitude towards “experts” of either side of the political spectrum shown by commentators on this site.
“Would you listen to “experts’ if the theory that they were working from could be proven wrong?
I know I wouldn’t.”
No, they’re not always right but they do make adjustments when evidence suggests that they need to do so. I haven’t seen such adjustment from the right which is why I call them delusional – disbelieving reality has got to be insane.
That’s a rather general statement considering that you were talking about me. Most of the left, IME, actually do argue the facts rather than throw insults at people. I generally try to but I find it’s like hitting my head against the proverbial brick wall as the right just don’t want to hear them.
Marty G
The top rates are meaningless without the thresholds where they are applied. Can you plublish the thresholds with that as well ?
you can follow the links burt. Don’t be a lazy rightie.
And the thresholds aren’t relevant to the argument about alignment.
Actually a good point….. But you’d really have to publish the whole personal tax structure for each country to make it meaningful. Because of course you pay tax at lower rates up to each threshold.
It’d be interesting to see how many countries have lower taxes than we do for the lower incomes. I suspect that most of them do.
the tax wedge shows how much of the money employers spend due to paying labour gets taken up in tax before reaching the employees.
http://jimdonovan.net.nz/wp-content/uploads/2009/05/oecd-tax-wedge.jpg
As you can see, NZ has one of the lowest tax wedges.
Sure, other countries might have lower income tax rates but they have social security taxes on employee and/or employer
If tax alignment is so important to stop the tax rorts that are happening ATM then I suggest that businesses and trusts get put onto the progressive tax scale and make dividends tax deductible from the business end (Ie profit of $500m for the business would have them on the top tax rate but if that $500m is paid out in dividends then they pay 0 tax). We’d also have to get rid of provisional tax but I’m all for that anyway.
In reality, our entire tax system needs going over with a look to make the laws more consistent to get it properly sorted out. This is likely to result in less, more concise laws and not more.
“We should just close the loopholes…”
You are joking, right? When one loophole is closed up, another one just opens right up. Ask any accountant.
The simpler a tax system is, the harder it is to evade. Bringing tax rates into line certainly goes toward achieving that goal.
So far as reducing the tax on the wealthy is concerned, I would assume that you would like to see the poor become wealthy? Reducing the top marginal tax rate certainly provides motivation to escape poverty.
No it doesn’t. It has no effect on the motivation to escape poverty.
Of course, the whole reason why we have poverty is because capitalism wouldn’t work without it.
“So far as reducing the tax on the wealthy is concerned, I would assume that you would like to see the poor become wealthy? Reducing the top marginal tax rate certainly provides motivation to escape poverty.”
Sigh, No it doesn’t. Living in poverty provides all the motivation you need. The problem is opportunities to escape poverty and the fact that there is always a need for manual labour, so how do we ensure it is fairly rewarded? None of that is changed by a few cents off a tax rate that is two or three times the income of most people.
“The simpler a tax system is, the harder it is to evade. Bringing tax rates into line certainly goes toward achieving that goal.”
Sure, but that’s rewarding the cheats – ‘we give up, just take the lower tax rate’ and it’s a hell of an expensive way to solve a small problem.
lprent
Thankyou lprent, that was where I was going. Links where I have said that I think we should have a tax free threshold for low earners are not hard to find on this site.
“…virtually all academics, bureaucrats and accountants.”
not to mention white, male and probably well off.
…i can’t see the maori party voting for an increase in GST based on some throwaway assurance of ‘compensation for lower income families.’
Err wasn’t that one of the reasons they voted for the ETS (apart from the iwi forest concessions)?
The reason NZ should do something that no-one else is doing is because this government is aspirational innit?
The fact that the levelling of tax rates is covertly posited as an matter of fairness speaks volumes for the real ideological stance of this particular government innit?
Which is why this government…shit!…ficking drugs are wearing off again
Why hasn’t ‘first x of income be tax free been discussed?’ surely many of those same countries that are richer than us have this policy (Aus and UK as two examples)
Seems to me like a good way to compensate for potential GST rises?
Or am I missing something?
Be hard to do that and cut the taxes at the top. Cutting the taxes at the top is the goal, ergo…
The only place I’ve seen advocacy for a tax-free bracket is on the Standard. http://www.thestandard.org.nz/tax-working-group-report-preview/ for instance
The right and the well-paid political journos just want cuts from the top
If levelling the rates is such an important goal, why is there no discussion around raising the lower rate to meet the higher, or even moving both to meet somewhere between them?
Of course, raising a rate is unpopular (though GST seems to be suggested for that treatment), but surely if levelling were so important that unpopularity would just have to sit there and be taken.
SteveR “If levelling the rates is such an important goal, why is there no discussion around raising the lower rate to meet the higher, or even moving both to meet somewhere between them?”
What you are talking about is a flat tax rate. This is what David Lange decided to put on hold when he had “his cup of tea”.
Personally, I think having one single tax rate would be a great idea. Compliance costs would go way down, avoidance would be impossible, and the governments administrative costs would also reduce considerably. The IRD would probably be able to operate with 90% less staff. Also, it would be absolutely fair. Everyone would pay at the same rate. The wealthy would still pay more by virtue of the fact that the earn more to be taxed.
“Compliance costs would go way down, avoidance would be impossible, and the governments administrative costs would also reduce considerably. The IRD would probably be able to operate with 90% less staff.”
No sense of scale ts. Those are minor benefits compared to the cost – a flat tax at any level implies a massive transfer of wealth from those on low and middle incomes to those on high incomes – either through higher tax on low incomes and lower tax on high incomes or a slashing of the social wage if the flat tax is too low to cover public services.
I’m sure you have enough maths to see that for yourself.
No, all I meant was, why, if levelling the company and personal tax rates is such a vital idea that over-rides all other considerations, why not raise the company rate and trust rate to equal the personal one? Why are people only assuming levelling entails lowering the higher rates?
Or is all this principled reasoning jettisoned directly self-interest seems threatened?
well everybody is full of good ideas today.
especially the ones who stand to gain a hell of a lot at the expense of lower paid workers.
this is what is called voodoo economics and so far the high priests of making the workers money disappear are winning.
well everybody is full of good ideas today.
especially the people who want to make the workers pay for their tax cuts.
this is what is called voodoo economics and so far the high priests of making the workers money disappear are winning.
Thank God for that Randall, I have been watching the debate and it’s a bit depressing..too much focus on personal as opposed to corporate taxes so to add hereiss my wisdom on corporate tax differentials between countries, gleaned from years doing real business:
1. Capital does not move because of tax rates. The most fundamental driver of capital migration is wage costs and conditions. Business will quit NZ, Australia or anywhere to produce more cheaply elsewhere as amply demonstrated by the growth of sweat shops in the third world. China too will face this problem. The corollary is that tax differentials between Aussie and NZ etc mean little in terms of “business friendliness’ and resultant capital investment / disinvestment.
2. Capital also seeks places where there are few restrictions on what you can do (i.e beat up workers, rip down forests, pollute etc with minimal compliance costs usually a bit of bribery etc). This also trumps tax rate differentials between well regulated countries by a mile. The difference between 30% and 35% in the first world means nothing when you can pay only a bribe in the third world.
3. When selling to a local market a few percent difference between countries in tax rates is often less than the cost of freight, making tax differences irrelevant.
4. Tax is paid on profit: companies and in particular multinationals have crafty ways of transferring or hiding profits. A good example is transfer fees for “marketing collateral’ or “management fees’. These dubious and difficult to audit “costs’ mean that a multinational can set up transfers before tax to lovely spots such as the Cayman Islands where tax is sweet f.a.
All of the above is a result of unregulated capital flow between nations in the true spirit of laissez faire, the whole tax differential debate is a smoke screen behind which corporate do things off shore we would not countenance here. Our refusal to prevent this makes us both culpable and ultimately as impoverished as where the production has gone to. So when I hear some “rich prick’ bleat on about tax rates I reach for the metaphorical rifle.
UK top rate of income tax is higher than the 40% you quote as you have to add National Insurance (pays for pension/sick pay/maternity pay etc) – plus tax rate will soon be 50% as crisis measure.
Lots of tax evasion at highest levels – not unique but no political will to deal with it plus cutting tens of thousands of civil service jobs makes enforcement harder.