Politics Thread!

[gravy]

I think that's exactly what will happen in Scotland. So here's my prediction and rationale:

* Lib dem vote will collapse countrywide
* Labour fucked in Scotland to SNP's gain
* Cons get the single largest amount of seats but no majority
* No party will enter in a coalition with them (see lib dem cautionary tale)
* They'll for a government but won't get past the queen's speech vote

And then all mayhem breaks out

This is looking more and more likely. Both the SNP and Labour have now commited to vote down any Queen's speech from the Cons if they don't have a majoirty

[merman]

So Non Doms? Labour plan to eliminate the rules that allow them to pay less tax. Unfortunately that will actually raise less. Who says? Ed Balls, earlier this year.

And he’s right. Raising always brings in less than expected as the people being taxed change behaviour. And there’s probably no group more likely to change behaviour than non-domiciled tax payers. They are if not foreigners people with strong foreign ties who can easily leave, losing us the tax they do pay as well as their many other contributions to the economy which are also taxable.

But Labour are going ahead anyway, saying it will raise “hundreds of millions”. Is that £200m? £800m? More? They can’t say as they know any target will be wrong, it will raise nothing, just lose money. I.e. it’s big con to win the election.

Let's get this straight. When Ed Balls made that comment it was a straight answer to the question of getting rid off non-dom status completely. Since that comment there has been a long study by economists and Labour into the best way to restructure the law so that it does not discourage investment and short stays by rich people.

It's an archaic and unfair rule that needs to be changed. Labour are making it part of their manifesto to put the burden of tax on the rich people who can afford it. To call it a "big con" is flat out Tory propaganda - what about their big con of claiming people will pay £3000 more in tax under Labour which has been proven by independent analysts to be false? Or the sheer number of lies and half-truths Cameron came out with in the leaders' debate.


Michael Fallon's "backstairs deal" and "backstabbing" comment over Trident shows the Tories are getting desperate.

[gravy]

Conversely it doesn't matter a toss if does mean less tax revenue.

It's something unique to the UK (because it's insane) and there aren't any other easy swaps for countries the non tax contributing non doms to fuck off to.

And it's just wrong you can build a business that get considerabe benefit from the social infrastructure we all pay for and the owners to reap those benefits with being taxed by the rules that apply to everyone else.

It's a regressive benefit, idiosyncratic and morally wrong. Fuck it off.

[pogo]

Conversely it doesn't matter a toss if does mean less tax revenue.

That’s the problem with it though. It’s being presented by Labour as one of the things they will do to close the deficit. While in fact they don’t know it will do any such thing. They don’t know how many non-doms will leave, and so deprive the treasury of the tax they do pay (tax that increased under the Tories). They don’t know how easy it will be to collect tax on their worldwide earnings, or even how much they will be.

It’s not cost free if it’s done for ideological reasons, not to raise money. There’s the time wasted in parliament crafting such rules. There’s the greater tax raises/cuts that need to be made later, as the fiscal situation worsens if nothing’s done. And so it is dishonest, presenting it as something that will close the deficit when it will do no such thing, meaning they know they will have to raise other unannounced taxes or make other unannounced cuts if elected.

[pogo]

Michael Fallon's "backstairs deal" and "backstabbing" comment over Trident shows the Tories are getting desperate.

Actually that struck me as a classic fail by Miliband. Before he mentioned it few had probably noticed it. Fallon is the sort of secondary minister who only comes to the attention of political columnists, not the general public. Besides he didn’t say anything especially bad. Everyone knows Ed didn’t backstab David. Not literally as it would be murder. But he was elected in very dubious circumstances: both MPs and members voted for David but unions swung it for Ed. And his brother would have been a much better Labour leader. Thanks to Ed we get reminded of that, again.

[Governmentyard]

If my uncle had tits he'd be my aunt. David might have been a smoother, Blairier, more electable leader, and therefore more successful, but better? It's he old football saying "If we'd signed X we'd have gone up last season". It's a known unknown, to quote Rumsfeld.

I can see why Miliband's doing this - people are sick of 'nasty' politics (unless they vote Tory/UKIP but he won't win them over) so be seen as a target for arseholes and therefore not one yourself. Certainly to anyone who just reacts to the news. So most people.

[pogo]

If he thinks “backstabbing” and “backstairs deal” are especially nasty he’s not been in politics for long.

The “backstairs deal” thing is actually more interesting, as it points to perhaps their biggest problem, the SNP. It looks like the only workable coalition will be Labour + SNP, as both have ruled out working with the Tories, and they are the parties likely to get the most seats by a wide margin. And in theory they are ideologically very close, both being on the left of British politics.

But the coalition could be very bad for Labour. It could be dragged decisively to the left, which would be cheered by some backbenchers but be very bad for it electorally. Or even worse it could end up doing things to favour Scotland, such as even more generous funding or boondoggles like HS3, which would be disastrous for it in England and little help in Scotland where credit would go to the SNP.

The problem for the SNP is the opposite: they only win if they extract concessions from Labour, whether economic ones such as ending austerity or goodies for Scotland. They will have only a fraction of Labour’s seats, a small percentage of votes (they should come fifth nationally – they will only get so many seats as their votes are highly concentrated) and so no mandate to get what they want. But if Labour don’t get an overall majority they will be able to block them until they get what they want.

[gravy]

Conversely it doesn't matter a toss if does mean less tax revenue.

That’s the problem with it though. It’s being presented by Labour as one of the things they will do to close the deficit. While in fact they don’t know it will do any such thing. They don’t know how many non-doms will leave, and so deprive the treasury of the tax they do pay (tax that increased under the Tories). They don’t know how easy it will be to collect tax on their worldwide earnings, or even how much they will be.

It’s not cost free if it’s done for ideological reasons, not to raise money. There’s the time wasted in parliament crafting such rules. There’s the greater tax raises/cuts that need to be made later, as the fiscal situation worsens if nothing’s done. And so it is dishonest, presenting it as something that will close the deficit when it will do no such thing, meaning they know they will have to raise other unannounced taxes or make other unannounced cuts if elected.

So you'd be happy if the main reason they had for scrapping non dom status was that it's antquated and immoral?

http://www.theguardian.com/politics/201 ... tus-labour

It'd also simplify the tax code and free up HMRC resources to go after evaders. It's odd, tax code simplification is always touted as a right wing goal. Except in cases like this for some strange reason!

[pogo]

“antiquated” is a very poor reason to change it. I mean if the law were introduced by the current government it would at least be possible to compare the time before it was introduced with how it works now. That it’s been part of UK law for so long suggests it works quite well, and needs only tweaking (as both the last and this government have done) not replacing.

And it will hardly simplify things. The change will mean people affected (those that don’t leave) will have to pay tax on their worldwide income after they’ve been here three or five years. But how will HMRC assess that? They will of course rely on self assessment, and hope people cooperate, but do they have the resources to run global investigations on those taxpayers unable or unwilling to provide full information (and how will they know which those are?). It will need far more resources, not less than the current system which is based just on length of time in the country.

As for moral, morality like fairness is a poor basis for tax laws as it means whatever the speaker wants it to mean. Even worse it’s often invoked when the speaker knows that just using “fair” isn’t enough. So if you have a moral case you can ignore fairness, such as fairness to other taxpayers who will have to pick up the tab when, as Ed Balls said in January, it actually loses money.

[gravy]

It's a quirk that was originally conceived for a set of circumstances that no longer exist. That's what I mean by antiquated.

That's a good reason to junk it iyeah?

Or are you saying that If you had a clean slate and had to design a tax system non domicile status is somthing youd include?

Probably worth noting most of the current political class want to get rid of this shit, even a fair few in the Conservative ranks.

[pogo]

You would include something like it in any new tax system as it’s something that exists in all tax systems: how do you handle taxing people who are not permanent residents? Most countries have rules to allow people to come temporarily and not pay tax: students for example who are studying and not working, and usually contributing economically through the course fees and living expenses they pay. Asking them to pay tax would decimate their numbers, as they avoided the UK for territories where tax isn’t levied on students' foreign earnings.

What’s perhaps changed is the number of people coming here who benefit from it (who aren’t students). But this is a sign of the attractiveness of the UK, compared to the rest of the world which has become more chaotic in recent years. They are not a problem as they are overwhelmingly net contributors to the UK economy, in the tax they do pay on their UK earnings and the levy imposed if they are here for long enough, and the money they spend. Sure they may have made corners of Kensington into expensive ghettos but the solution to expensive houses in London and elsewhere is build more of them. In as much as house prices are a zero-sum game that will do far more to transfer wealth from rich property owners, mostly in the South East, to those currently unable to buy.

[gravy]

You would include something like it in any new tax system as it’s something that exists in all tax systems: how do you handle taxing people who are not permanent residents? Most countries have rules to allow people to come temporarily and not pay tax: students for example who are studying and not working, and usually contributing economically through the course fees and living expenses they pay. Asking them to pay tax would decimate their numbers, as they avoided the UK for territories where tax isn’t levied on students' foreign earnings.

That's a completely different case, other countries allow temporary residency for foreigners but there's a time limit after which you are regarded as domiciled and have to pay tax on your earnings. Except for the US. You live there? You pay tax there. They seem to do okay.

There's no time limit in the UK, you provide a really scant list of foriegn interests, fill in a form and off you go. Live here for as long as you want, earn billions and not pay a penny of UK tax. HMRC have even granted wealthy people born in the UK non dom status on the basis that their parents live in another country. Fucking Zac Goldsmith had non-dom status he 'inherited' from his dad

To take full advantage of the tax dodge you have to make sure that you don't land any money earned in the UK. It's not just the tax on the revenue that's lost but there's a massive incentive not to receive that income in the UK.

And stepping back there is NO hard evidence that rich people living in the UK as non doms spend significant amounts of their money here.

This is another tax thing you don't really understand isn't it?

[gravy]

Hey pogo

Here's a breakdown how Zac Goldsmith's inherited non dom status worked:

http://www.theguardian.com/politics/200 ... dom-status

Hats off to him in that he revoked when he went into politics. That said he probably still lives in beautiful houses owned by the family trust full of hundreds of milliosn of untaxed revenue.

Do you really believe that someone born in the UK can land and earn huge amounts of capital gains revenue and bring it into the UK and pay zero tax?

[pogo]

And stepping back there is NO hard evidence that rich people living in the UK as non doms spend significant amounts of their money here.

People like Roman Abramovich ? I agree there is no evidence they spend significantly more than other well-off people in the UK, but there’s no evidence they spend less. Not all will throw hundreds of millions of pounds at Premier League football like Abramovich, but they include many who fund the sports, or arts, or make charitable donations. Mostly though if you are well off and come to live in London it’s not to live in poverty but to live very well, in an expensive house or apartment, with an expensive car, eating well, perhaps employing domestic or office staff to run your house or affairs.

People complain about rich foreigners coming here and buying up all the properties in central London. But to do that takes money, lots of it. If they have really moved the property market that much then they’ve brought in billions of pounds, to give to British owners and developers who then go to spend it on other things. Massively distorting the property market in the process but then the fix to that is to build more homes. That’s what a Labour party that really cared about inequality would do, not introduce ideologically driven tax changes that will actually lose money.

edit: I'm not especially familiar with Zac Goldsmith, but his previous status is an argument for tightening the conditions for getting non-dom status, not eliminating it for everyone. That fact it’s a previous status that he gave up makes him exceptional, so basing any rule changes on him would be a bad idea. Better to look at the much larger number of non-doms without such strong ties to the UK who could leave if they wanted. And his charitable work conforms with what I wrote above: non-doms contribute to the UK economy in many ways, on top of immediate expenses which too can be high.

[pogo]

Ah, and although this belongs in the Ireland thread it seems very relevant here. I’ve been assuming nothing can upset the arithmetic of a Lab-SNP coalition but there is something:

Eurozone: Six days for Greece to offer new reforms

Six days actually means six working days, as that’s how many there are until a key meeting on the 24th. Time really is running out for Greece financially. They need a deal soon, and this might be their last chance. Problem is most of the things they have done recently have ended up pushing them further away from the rest of the EU: bringing up reparations from Germany again (this time attaching a € figure to them); flying to Moscow to perhaps get help from Putin in exchange for who knows what.

There’s the real possibility they will be, if not out of the euro, then well on the way by the election. In which case it can hardly not be an election issue. It may be a lot like 2010, with the whole of Europe in crisis mode and pressure on politicians here not to waste time but to respond. Probably there’s nothing that can be done here but it does put some issues in perspective such as the pledge to hold a referendum on the EU by 2017 – by then the EU may be radically changed making a referendum a very different matter.