Sunday, October 20, 2013

Government to conduct Economic Census, is this the precursor to new wealth taxes?

The lead story in today's Sunday Times, claimed that the Government was considering introducing new taxes on the rich.

This is rather worrying. Increasing rates of tax is something that takes place on a regular basis, something that we are accustomed to, even if new changes are only accepted with a weary resignation. Our affairs are adjusted to the current system, arranged, as rational beings are wont to, in whatever manner that minimses the impact of tax. Changes to the system of tax itself is another matter altogether.

When a completely new type of tax is contemplated it gives one the shudders because one does not know where it will strike. Second, as policy is generally made up ad-hoc, as things go on, there is a good likelihood of some ill-thought, unworkable or harmful tax will be foisted up on us. We have precedents, all bad,  of the type of havoc wrought by such taxes in the 1960's. The article claimed that the new tax "would apply to both those who have acquired wealth through inheritance of family property and cash, and the new-rich, a growing breed of businesspersons who have acquired wealth in recent times."

I suppose one just has to wait and see what turns up, hoping all the while for the best.

Meanwhile, an advertisement in the Sunday Observer announced a new Economic Census of industries and businesses. Businesses were requested to cooperate by providing information on numbers employed, output and assets owned. The website of the Department of Census and Statistics carries some information on the census.

Throughout history rulers have used a census for the purpose of taxation, indeed the very word is derived from the Latin word censere ("to estimate").

The question that came to mind was if this census would form the basis for this and other new taxes being contemplated? The Government is spending is far above its revenues and I think the mandarins in the Treasury have realised that revenue from existing taxes is probably near its limit so new methods to appropriate citizens wealth are required.

Unlike in the 1960's however, it is a lot easier to move money out of the country, so expect another flight of capital.


sbarrkum said...

Unlike in the 1960's however, it is a lot easier to move money out of the country, so expect another flight of capital.

To where is the question. With the advent of draconian US laws and requirements that foreign banks comply and disclose assets and wire transfers etc, other governments too are piggy backing on those disclosures.

So welcome to the world of big government. Read specially the links.

Also Google "Pluto in Capricorn Government".

Jack Point said...

There are several ways this can happen. There are legitimate businessmen who want to protect their assets, so accounts in Singapore, Jersey and the Cayman Islands are possibilities.

Moving assets overseas or investing overseas because of diminishing opportunities at home is another form of capital flight. A number of companies now have overseas investments, in factories and businesses.

sbarrkum said...

US taxes citizens on their worldwide income. If you wish to renounce US citizenship assets over USD 500K will be taxed at 50%.


US also managed to get all Swiss banks to disclose US citizen accounts, so much so no US citizen is accepted by Swiss Banks to open an account.


So far US corporations have managed avoid world wide taxation because of intense lobbying.

So its just a matter of when, given US economic situ when corporations will be taxed worldwide.

That mean its our guys too will follow suit given a lot of the ideas are picked up from the US.