We, along with other publications such as the Sunday Times, have been very interested in determining exactly how many people are leaving the UK because of the government’s new 50% tax rate. We’ve all seen the headlines stating that there has been an exodus already, and that the numbers of those considering an escape are rising.
However, to date it has been hard to exactly quantify the impact that Darling’s decision has had. Now, in light of the fact that the Chancellor has dealt another body blow to the wealthier end of society with his one-off bank bonus tax, it’s time to lift the lid on the truth about the damage this government is actually doing to this nation with its ever increasing taxes.
Not only are the 50% taxes off-putting for many, the level of National Insurance being demanded and the detraction in attraction of pensions in the UK are serving to pile pressure on already mounting pressure to emigrate or repatriate for those who are in a position to do so…and so far, the outward flow of talent and wealth has been significant.
You may be reading this article from a position of support, particularly for the 50% windfall tax on bankers’ bonuses this year…many people feel that it is incredibly unfair that any bankers should be rewarded for their behaviour which ultimately caused the banking crisis in the first place. We have to say that we also agree that those who caused the crisis should be a little more demure in their behaviour, a little less arrogant in their clear disregard for public opinion, and that they should really have behaved a little more intelligently as a collective - and instead of demanding or expecting bonuses, perhaps they could have united behind an idea to give something back to the public purse instead.
The banks have been very short-sighted in failing to account for public opinion – which let’s face it is probably 100% behind the public flogging of bankers on the streets of London! If the government hadn’t used public money to bail out the likes of RBS and Lloyds they would no longer have a presence on the high street, they would have gone bust – and yet how short is a banker’s memory? The nation has been plunged into debt levels so severe that each household in the country basically has a debt responsibility of upwards of £40,000. So you can’t really forgive public opinion when it goes against the bankers getting any form of bonus. But was Darling’s decision to take 50% of the bonus off the bankers the right one?
Right in that it will maybe help public opinion of the government – praise maybe given that finally the Chancellor is standing up to the bankers. Right in that it will drag a little back into the public’s empty coffers. Right in showing the bankers that they should have offered it up in the first place if they ever wanted to be given any respect ever again by anyone! But very, very wrong and very, very short sighted if you think about the amount of money banks in the City actually pump into the economy annually.
Did you know that the banking sector in the City contributed almost 14% of the total in Government taxes in 2007 – and even during the crisis the level was almost 12%? That is tens of billions of pounds given every single year by a sector that has just been effectively humiliated by the Chancellor – a sector that as a collective can up sticks, ship out and set up elsewhere. So, yes, you may be in support of the 50% tax on bankers’ bonuses – however, over the slightly longer-term, what the Chancellor has done to make the public happy for now, may well make them even poorer when tomorrow comes around.
You see, none of the international banks in the City of London have any allegiance to the nation, they don’t care about Britain’s debt, they don’t give a damn about the average man on the street. All they care about is that London is a good international centre for financial business. The moment it ceases to be, they cease to have a presence in the City. And it’s happening already. The 50% rate of income tax was the beginning of the end for the wealthiest in the UK, this windfall tax is the final nail in the coffin, the straw that broke the camel’s back and plenty of other idioms like that!
According to research into the rate at which the wealthy are leaving the UK undertaken by the Sunday Times, 10 are packing their cases and boarding their private planes every single week. You may feel a strong urge to shout “good riddance” whilst waving these individuals off the premises…however, stop for just a moment. Whilst we share your anger at the way certain sectors of wealthy society (certain bankers!) have behaved, we have to point out that the faster these people leave the UK, the faster businesses close their doors in Britain and set up elsewhere, the faster the level of public debt each British household has to shoulder will rise. The banking sector contributes significantly to Britain’s tax coffers – a fact we must not overlook. And as greater numbers of wealthy individuals leave Britain, so they take their taxable revenue with them.
The government is not fixing things with their ever-increasing taxes designed to strip more and more away from the average man – they are making it worse. The wealthiest who they hoped to be able to tax harder and generate more wealth from are just leaving. This leaves even greater responsibility for debt on the shoulders of those who can least afford to carry the burden. This nation will slowly but surely crumble under its debt as the wealthy leave at a rate of 10 a week and the financial institutions in the City realise there is nothing keeping them in Britain.
