In In June 2016, while investigating the Vanity Fair article, I Donald Trump asked If he escapes taxes with tax havens. “I know a lot about tax havens, but I don’t use them,” he told me. “There are greater incentives in many ways to keep your money in the United States.”
Fellow billionaires may laugh because they also know this after decades of attacks on the US tax system with extraordinary interests. Their goal, as Texas Republican Bill Archer once said, was to “pull it out of the roots and throw it away so that it never goes back.”
Investigative journalism ProPublica released last week Shocking new evidence How easy it is for US millionaires to escape paying taxes. Using leaked tax records, Amazon’s Jeff Bezos, publisher Michael Bloomberg, “corporate assailant” Carl Icahn, Tesla founder Elon Musk, and financial investor George Soros All reported zero federal income tax in a few years. Between 2014 and 2018, the 25 wealthiest Americans, many of whom were monopolies, saw a surge in wealth of more than $ 400 billion, paying taxes equivalent to 3.4% of that. Meanwhile, the average American wage earner in his 40s increased his wealth by $ 65,000 and paid $ 62,000 in taxes.
How do millionaires get over it?
The loophole is one answer. Trump’s tax accountant qualified for tax deductions on farmland using large gaps in real estate tax law and stunts such as placing goats on a golf course in New Jersey. Another trick is to take a carefully prepared asset that is currently of little value and push it to a tax-exempt retirement account just below it. Contribution limit In the words of Pierce McDowell, the owner of a South Dakota trust company, just like putting it “through the needle” in your account, then flick the financial switch and it’s worth it once safely in your account. Watch it explode tax-free.
There are many others. But this is a really big loophole. Fewer mortals pay taxes on their salaries. Billionaires avoid even dirty salaries and income. Instead, they own assets that increase in value – and their increase, their “unrealized profits,” are tax-exempt. These 25 wealthiest Americans owned $ 1.1 trillion in wealth in 2018. That’s the wealth of the average American of 14.3 million, but personal federal taxes pay only $ 1.9 billion. The 14.3 million “little people” paid $ 143 billion, or 75 times more.
The situation is similar in the UK. Billionaires own assets instead of earning income and generally do not pay taxes when the value of those assets rises.
We have a lot Other loopholes.. Here, British millionaires can outperform US millionaires in several ways. The strangest is certainly the archaic “non-dome” rule, the legacy of the empire, and wealthy British residents can claim that their “registered domicile” is elsewhere. England. (Therefore, make sure your income stays abroad.)
Of course, the bigger British specialty is tax haven.. We protect and grow one of the largest islands in the world, from the Cayman Islands to the British Virgin Islands and Jersey. Americans also use tax havens, but the UK’s billionaire tax haven strategy is often much closer to the legitimate gray zone. (According to my research, Trump’s main tax haven strategy was to park multiple businesses in Delaware, a US state that boasts strong secrets and other offshore characteristics.)
What can i do? There is no silver bullet, but some rough strokes that properly exempt “little people” are: Very popular And it was financially successful.
First, we will abolish the non-dome rule as a sign that we are serious.
Next, we will strengthen corporate tax. Most corporate taxes are ultimately paid by wealthy people.Rishi Sunak Recently recognized George Osborne’s reduction of the UK corporate tax rate from 28% to 19% failed to bring investment. As Tom Bergin explains in his new book, Free Lunch Thinking, cuts couldn’t bring growth either... Sunak is currently raising the corporate tax rate up to 25%. I will raise this further.Meanwhile, the G7 leader Agreed on measures Includes a global minimum corporate tax rate of at least 15% to tackle tax havens. G7 trading faces many hurdles and Leave a little For a poor country, it’s a decent start.Complement this by expanding the proven product Financial transaction tax.. New promotion for this is currently underway.
Wealth taxes, which have been successfully used for years around the world, are also essential. If someone owns £ 1 billion in assets (stocks, gold coins, castles, etc.), a simple 1.5% (for example) annual wealth tax earns £ 15 million annually. The UK Wealth Tax Commission 1% tax may go up Over £ 50bn / year: The size of last year’s additional medical funding for Covid. Add another type of wealth tax, land value tax, to the list.
Make the tax rates equal. If you tax income from wealth at the same tax rate as income from work, £ 120 billion, About twice What we get From corporate tax. If you take the courage, you should also aim to tax all these unrealized profits. Therefore, if a millionaire’s wealth increases, we pay that tax each year, regardless of whether we sell (or “realize”) our assets.Some strong Democrats in the United States Push now Just for this.
In the United Kingdom, as in the United States, tax authorities are under attack. HMRC staffing has dropped from 105,000 in 2005 to about 60,000 today.Estimating the “tax gap” for uncollected taxes Range of More reliable £ 35 billion £ 90bn a year.. The tax collector repays his salary many times. Reinvest in HMRC, with a particular focus on taxing HNWIs and multinationals.
Finally, of course, think seriously about the crime-prone tax haven rackets. This could not only strengthen our tax system, economy and democracy, but also be our greatest gift to the world now that humanity is struggling to overcome the pandemic.
Ensuring that “a large number of people” pay taxes will boost democracy.Nicholas Shaxon
Source link Ensuring that “a large number of people” pay taxes will boost democracy.Nicholas Shaxon