The case of Jimmy Carr, the British
comedian, has proved instructive in the mindset of modern Britain. As
the story of Carr's tax minimization scheme broke, a storm of
indignation erupted, from No. 10 all the way to the UK Twittersphere.
The PM called the scheme "morally wrong", concluding that
UK Citizens would be "appalled" at having to pay the UK's
exorbitant taxes while rich people like Carr & Co. have their
lawyers invent methods to minimize their tax exposure.
This could well be true, but there are
two deeper issues at stake here. The first, and most apparent, is
that there is far too high a tax burden in the UK for the UK to
remain competitive. This, of course, is not restricted to the UK, but
is common throughout Europe. The truth is that in most jobs in the
Talent Economy we live in, there are truly talented individuals, and
those individuals will require very high salaries to attract them to
UK companies. In order to stimulate economic growth in the UK, a
concerted effort needs to be made to attract Foreign Direct
Investment and to position the UK as an international business center
again, in the model of Hong Kong or Singapore. One of the many
conditions that need to be changed to achieve this end is the
lowering of taxes across the board. Taxes in the UK are far
too high, as is illustrated by the fact that a person earning a
median wage of 30,000 Euros or GBP ends up with exactly the
same amount after tax in Germany after pension
contributions are taken from the salary (before pension contribution
in the UK). This does not include the UK Council Tax, on average
around £1000 per annum. As you earn more, the tax burden rises
consistently. Earn over £150,000 and you pay 50% income tax in
the UK, whereas you have to earn over €250,000 to pay 45% in
Germany. Corporate tax is lower in the UK than in Germany (24%
maximum versus 29% maximum actually), but still not low enough to
compare with the 12.5% across the Irish sea.... These are not
attractive numbers, especially when compared to the 15% personal and
16.5% corporate rates in Hong Kong!
The darker and less apparent issue is
the tax "addiction" that is so prevalent in the UK. Why
does the UK need so much tax income? Quite apart from the social
welfare and NHS black holes, that drain the British state revenue
like nothing else, there is also a societal psychology issue here.
The British have become a nation driven by covetousness and hatred of
success. To be successful in business (not in football), and
therefore rich, is to be hated and despised in the UK. "Tax him"
sounds the cry when a rich man is seen, with the "because he has
dared and won, and I hate him for it" remaining strongly felt
but unspoken. The silent hatred of the rich is a poison to British
society, which will drive the talented and excellent away from the
white cliffs faster than any economic downturn. To exacerbate the
situation, the government foolishly panders to the popular hatreds,
without giving thought to the economic consequences. Until the
British learn to celebrate success, the outlook is grimmer than
Shetland weather.
Pray for day that the sentiment in the
UK sounds as follows: "Ho, a rich man. Look what he has done, I
would emulate him. Let me be about building the foundations to my
success, as he did". Only when this becomes the national mood,
the UK will begin the long climb to success again. You cannot be
successful without first learning to celebrate and nurture success.
Learn to admire the wealthy, for they are successful. Look to them,
analyse how they succeeded, and plan how you will join them.
No comments:
Post a Comment