In an article that we published on the 23rd of April, we suggested that Labour’s new plans to tax the wealthy in the UK up to 50% on their annual earnings would have all those who could, heading for the nearest airport with a one way ticket in their pocket.
Well, it seems that we have indeed been proven right in our theorising already! A report in the Sunday Times this week details a significant handful of the wealthiest and most successful Britons who are planning their escape.
According to the report these people had already looked into the viability of relocating overseas when Labour suggested they’d hike the rate of tax to 45% in the pre-Budget report back in November 2008. Now it seems that the majority of these people are speeding up their efforts to get the hell out of Britain before they are made financially responsible for the mess that the nation finds itself in. So, Labour’s tax plans are backfiring as the wealthy Brits leave the UK…this doesn’t bode well for the country.
Britain has traditionally been a nation of entrepreneurs, for some reason Britons generally have a tenacity that lends itself to being creative and creating wealthy and successful business ideas from nothing. Perhaps the most famously cited British entrepreneur is Sir Richard Branson, and he is one who has slammed the government’s new plans to heavily tax the wealthy as being totally damaging to future generations of would-be entrepreneurs. Commenting directly on the plans Branson is reported as saying that they are “a “block to the next wave of entrepreneurs.”
According to the Sunday Times, leading business persons particularly in the financial industry are actively planning a relocation abroad. After all, these are the very people who know exactly how much it is going to cost them to keep their businesses in the UK! The likes of Monaco, Switzerland, the Isle of Man and even Dublin appear attractive to Britain’s wealthiest elite who know that they can operate their businesses anywhere. It also makes business sense for many operations within the financial industry to move to lower taxed jurisdictions as it proves to a company’s client base that they know that they’re doing when it comes to money!
As has also been pointed out in the media since the Chancellor announced the 50% tax rate, the super wealthy are those who can afford to get the complex business, banking and tax structures in place to shield more of their wealth from the tax man anyway. So it seems that Labour’s tax plans are backfiring on more than one level. Firstly there are those who will leave the country and take all their taxable revenue with them, secondly there are others who will find ways to shelter their assets and therefore reduce their tax burden anyway. But perhaps the government isn’t so dim. Perhaps they knew this but they thought announcing the plan would at least curry them favour with the average working person in the UK. Perhaps the government was trying to hide their catastrophic mountain of debt with a sneaky ‘tax the greedy rich’ campaign instead? But I’m sorry Labour, we average working people are not so naïve, we can see straight through your plans. They are flawed.
If you’re a successful and high earning Briton, what’s to stop you looking overseas for a new home for your wealth and your family? There are only a handful of countries in the world that tax as much as the UK or higher – therefore you practically have your pick of nations to chose from. And what’s to keep you in the UK? A government that has bailed out banks but won’t invest in education, health or infrastructure? Do you feel you have a responsibility to give more of your hard earned wealth to pay for the mess that they have landed the nation in? If you do then stay, if you don’t then why not leave?
