The problem with the French is they have no word for entrepreneur

[Tuberski]

You can't xpost yourself!

ACK!

[OneFootInTheGrave]

Liberals are everywhere, going around telling others what they can and cannot do.

[Dauphin]

The British know where their bread is buttered.

http://www.telegraph.co.uk/finance/comment/9565986/If-you-want-the-rich-to-pay-more-tax-let-them-grow-even-richer.html

This is nonsense, as even a cursory analysis of the official statistics reveals. The top 1pc, who earn £156,000 or above, will pay a whopping 24.2pc of all income tax this year, a much higher contribution than their 10.8pc share of all income. The top 10pc of earners – those on at least £50,500 – will pay 55.3pc of all income tax, also far more than their income share.

The most astonishing figure of all is that for the very wealthy: the top 31,000 taxpayers, who make £500,000 or above, pay £14.8bn in income tax, more than the £13.9bn paid by the 13.6m taxpayers on £20,000 or below (plus millions more who earn less than the personal allowance and pay no income tax).

About 2,000 individuals pay £2m each on average in income tax alone; each of these pays the wages of at least 80 nurses, keeping the welfare state in business, even before contributions to other taxes, such as VAT and duties, are taken into account. High-earners also usually employ people, generating additional tax.

Of course, some people break the law. A minority engages in extreme legal avoidance – the Government must continue to shut down remaining absurd loopholes of the sort used in the past by some entertainers.

The tax system is horrendously complicated; the taxation of companies in particular has become horribly arbitrary. We must tear up the tax code and start again. But when it comes to taxes on income from labour and dividends, the sums avoided by wealthy domiciled UK residents – at least using any reasonable estimate – are at worst a small fraction of what is already being raised. The average income tax rate alone for those earning above £500,000 is a crippling 43pc to 44pc, higher than at any time in recent memory.

It is true that these figures don’t include overseas income for the 100,000 or so non-doms – a shrinking group now hit by an annual fee of £50,000 – but they pay full tax on all UK-generated income, and on all income brought into the UK. This helps Britain capture more tax than it would otherwise have by attracting mobile and generally foreign-born big spenders; Greek shipping tycoons were the original non-doms. And of course, people who don’t live in the UK don’t pay tax here, which, contrary to what some claim, is not a scandal.

The better-off are heavily hit in other ways. The highest-rated 0.6pc of homes generate 1.2pc of council tax; the priciest 1.6pc yield 26pc of stamp duty even before the latest hike; and the top 0.7pc contribute 36pc of inheritance tax receipts from housing. Again, there are loopholes; everybody should face the same rules, regardless of what lawyer they can afford. But this should not be allowed to negate the fact that most high earners pay vast amounts in tax.

History is clear: the best way to make sure the rich pay more is to cut tax rates and allow ambitious folk to earn as much as they can.

During the 1970s, when the tax system specialised in inflicting pain, the top one per cent of earners contributed 11pc of income tax. By 1986-87, with the top rate down to 60pc, that had increased to 14pc. After the top rate fell to 40pc in 1988, the top 1pc’s share jumped, reaching 21.3pc by 1999-2000, 24.4pc in 2007-08 and 26.5pc in 2009-10. Lower taxes fuelled a hard-work culture and an entrepreneurial revolution. Combined with globalisation and the much greater rewards available for skilled workers, Britain’s most successful individuals earned a lot and paid a lot in tax.

Yet times are changing, and not just because of the recession. HMRC recently slashed its forecasts for revenues from the top 1pc. It now believes the number of people expected to report £500,000 or more in earnings will fall by a tenth this year; those on £2m are set to drop by a third. Overall income tax receipts fell over the summer, partly because of this. Bonuses are down, as is the number of bankers.

Some of this is inevitable: we are in recession, the City had overreached and pay was artificially bloated. Some income is being delayed until the top tax rate falls.

But the war on wealth, and regulatory overreaction towards finance, is also having an effect. Capital gains tax is too high. Luxury homes transactions are falling because of higher stamp duty. Britain is now a high tax economy; this is distorting work and investment decisions, gradually shifting talent and capital overseas. The overwhelming majority of high earners are already contributing disproportionately to the exchequer; tightening the screws further will be disastrously counter-productive.

The lesson of the past 30 years is clear: the best way to entice the rich to pay even more tax is to keep rates low and allow them to get even richer. It may not please Lib Dem class warriors, but it works.

[MRT144]

Ah yes, the laffer curve...

[Zevico]

You can't xpost yourself!

ACK!

You're right, I thought it meant double post. I put it down to senility and old age, what with me being in my mid 20's. They'll be hauling me away soon...

[Dinner]

Marginal rates don't really mean a lot as there are always a million and one ways to get out of paying it. All that really matters is the real rates not the marginal rates.

[Dauphin]

Les Pigeons.

http://www.guardian.co.uk/commentisfree/2012/oct/05/les-pigeons-francois-hollande-entrepreneurs?newsfeed=true

'Les Pigeons' shooed off a key François Hollande policy with worrying ease

The French government has revealed a soft underbelly in yielding to a group of angry French web entrepreneurs



If there is one thing the French government can't stand hearing these days, it is that they hate entrepreneurs. So much so that they just did a U-turn on a tax they had planned to implement on capital gains. It only took a few days of intense online campaigning from a collective of web entrepreneurs for the ministers of budget and the economy to repeal a measure nobody had thought particularly shocking, and which was at the centre of François Hollande's presidential programme. Indeed, it looks though as if the French government has yielded to the power of social networks.

A week ago, French web entrepreneurs set up a Facebook group called Les Pigeons, aiming to defend entrepreneurs' rights. They now have 53,000 followers and counting. Their nickname comes from a French expression: a "pigeon" is a chump. In other word, French entrepreneurs don't want to be treated like chumps, easily fooled and easily abused.

At the heart of their fronde, as some have called it, is their outrage at Hollande's pledge to bring capital tax in line with income tax. At present, if an entrepreneur wishes to sell their company, or stocks, they will pay 19% tax on capital gains (to which is added 15.5% of social security tax). The new government had planned instead to follow the different strata of income tax: in theory, the bigger the capital gain, the bigger the tax (with a maximum 45% taxation).

This didn't go down well with entrepreneurs such as Marc Simoncini, founder of online dating website meetic, and Jean-David Chamboredon, head of an internet investment fund, whose opinion piece published in economic daily La Tribune gave momentum to the Pigeon movement. They proclaim that such a measure will kill internet start-ups, and to justify their campaign, they keep on quoting a survey by McKinsey stating that 20% of jobs in France are created in the internet sector.

In just a few days, web entrepreneurs' wrath spread on social networks and the original chump pun became a formidable lobbying force. And since we're in France, virtual protest has also had to materialise into a street demonstration. Les Pigeons called a protest this weekend in front of the National Assembly.

Everybody was taken by surprise by the viral blitzkrieg: the government, the traditional media and even Sarkozy's party, which could only gave its seal of approval after the battle took place. However, for many socialist MPs, it also looks as if what started as a childlike prank has got out of hand. For many on the left, there is no justification for Hollande's government to treat web entrepreneurs differently from other entrepreneurs, as is going to be the case. Besides, the entrepreneurs' anger is based mostly on fantasies: the dreaded taxation would only concern a tiny minority of them. Retiring entrepreneurs or those who reinvest their capital gain would for instance be exempted.

The pigeons' recriminations have even frightened some French entrepreneurs, such as Stéphane Distinguin, who confided in Libération that he sees them as a kind of Tea Party lobby, made of big egos and demagogue entrepreneurs who think that bullying and intimidation are the way forward. The chumps' shouting has certainly worked, let's hope that the French government will think carefully next time it considers giving in on measures for which it was elected.