It's becoming increasingly depressing to witness this current obsession we have with criticising the higher earning proportion of our population. An article in the Guardian this weekend was a perfect example. Here the paper tries to suggest that the Cameron family are somehow corrupt because David Cameron's father ran a number of offshore investment funds. In actual fact, what he did was perfectly legal and the paper admits this. However it tries to make out that this was some kind of tax avoidance. The reality is that Ian Cameron would have paid tax to whatever county the funds were located in. Were we honestly expecting him to pay tax twice - both in this county and the country the funds were based in?
In some respects, running an offshore investment account is little different from running a business overseas. Would we expect BP to pay UK corporation tax on separate businesses that incorporated abroad? No, so why expect offshore investment accounts run by businesses incorporated in another country to pay UK tax?
Ever since the banking crisis it seems to trendy right across Europe to blame everything on the wealthy and get them to pay more. In the French presidential elections, one of the far-left candidates, Jean-Luc Mélenchon, has vowed to tax earnings over €360,000 (£300,000) at 100%. Now while that may be a popular vote winner with the working class of France, if he was ever to succeed in being elected, he'd see a tsunami of money, talent and businesses suddenly leave France, with the result that France would be left bankrupt and with no means of producing any income. The very people who voted him in, would in actual fact become poorer.
Now, don't get me wrong, I'm no fan of incompetent bankers as you can tell from my previous blogs. However we seem to be lumping anyone who is a high earner into the same boat with them. Without the wealthy the UK would not be able pay it's way. A study by the OECD showed that the richest 10% of the UK population paid 38.6% of Britain's income tax. Not only do they pay more tax, but they also spend their money on many of the high end products and services that keep the rest of us employed. And they are the biggest source of investment for many businesses.
If we start penalising the higher earning proportion of our populations, then there will be no incentive for entrepreneurs to start small businesses, a major source of employment and tax income for this country. And lets not forget that 16% of the total amount of income the UK government gets goes on Welfare payments, so without the higher earner, this county could not be so generous to the misfortunate in our society.
So give it a rest, take responsibility for your own destiny and stop trying to blame others.
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