Jimmy Carr talking about his tax avoidance

[T McGibney]

There’s nothing fundamentally wrong with socialism in its present watered down form

For the record, I disagree...

...but it does ignore economic reality in order to support its preconceptions and so, ironically, it traps people in poverty.

... for this precise reason.

 

[Purple]

For the record, I disagree...

Yea, but look at the social reforms and advances in equality in Ireland and Europe over the last 40 years. Just about all of them have been driven by leftwing parties. Even in this country the Labour Party in government has an excellent record on social reform. That has to count for something. (Though it was a FF minister that de-criminalised homosexuality).

 

[Chris]

Been away and busy for a while, but I do want to revisit this discussion.

I don't quite get your logic that because any wealth tax would not 'plug the hole', it is therefore not worth doing. I doubt if any individual tax will 'plug the hole', but that doesn't mean they are not worth doing. Every little helps, as they say.

As Purple summarizes well, our differences in opinion here are fundamental. My logic is that there is a huge focus on taxing "the rich" as a solution to all problems. Obama is probably the worst politician for constantly regurgitating the idea that all that needs to be done is take more money from the rich, give it port and middle class people and then everything will be fixed, including the deficit. The slightest bit of economic scrutiny proves this completely illusionary.
Some countries, like Ireland and the UK, are talking about austerity and reducing spending but there have been no net spending cuts. All we have had is new and increased taxes but no reduction in total government spending and no economic recovery.
The logical reason that a wealth tax is not worth doing is that it will encourage wealthy people to leave, rather than attract wealthy people to come here. In the very short term there may be a boost to revenue, but that quickly reverses.
You say that "every little helps", but I think we are beyond a stage where little amounts will make any difference. We don't need haircuts to spending we need amputations and we want high income earners to come here, not leave.

And as I said earlier, the solution to this problem is for developing countries to come together and a common wealth tax, so these guys have nowhere to hide, or nowhere decent to hide, to be more specific. I'm sure you and others will continue to scaremonger to avoid any possibility of such taxes, but it's time to call some bluffs.

Do you honestly think that you will be able to convince Monaco to not be a tax haven. Or what about the countless Caribbean countries? It is wishful thinking to believe that a concerted effort by all modern western countries can be achieved to introduce a tax that would do long term harm.

So the solution here is to avoid these reactionary drops in rates, so people stop playing the tax system and concentrate on investing. Let them cash in their gains when most appropriate for them, not based on temporary changes in tax rates.

You make a very good point here. Investors should be driven in their actions by factors surrounding the countries, industries and companies they invest in. But at high tax rates they are less likely to cash in and move investments around. In economic terms this is referred to as regime uncertainty and creates havoc for businesses and investors in their attempts to make predictions about the future.
Drop tax rates and leave them there is the solution.

I wasn't thinking about pensions when I made my point about average Joes, and I really don't think you were either. You are correct, in that lots of people with pensions are invested in equities. The proportion of these who make active investment decisions about where to invest is fairly low. Most people go along with whatever defaults the fund investment managers suggest. The substantive point remains - the more money you have, the easier it is for you to spend or invest it overseas, rather than in Ireland.

I know you weren't thinking about pensions, that is why t was pointed out. And I disagree with your premise that people just simply go with a fund that is suggested to them and don't actively make decisions. Every company that I have worked for has had annual meetings with pension brokers who give an overview of a whole host of investment funds available and what their risks are. People do care about this and if they don't they are being very foolish and cavalier with their money. It is just as easy for someone with a PRSA to have all the money go into non-Irish or non-European funds, no more difficult than for a rich person.

Complainer is making the point that a Wealth Tax is desirable from a moral point of view. That's a perfectly valid position to take though I disagree.
Chris is arguing against it from a logical and economic perspective. Also a valid point of view. But one doesn't counter the other.
Complainer is a socialist and so his views will be coloured by that doctrine, it's a bit like a fundamentalist Christian discussing evolution; he may understand the science (or economics in this case) but he drew a conclusion before he was presented with the evidence and so will look at the evidence selectively and take from it what supports his preconceptions.
There’s nothing fundamentally wrong with socialism in its present watered down form but it does ignore economic reality in order to support its preconceptions and so, ironically, it traps people in poverty.

Well summarized, but...

For the record, I disagree...


... for this precise reason.

...I agree with this. To slightly rephrase a quote from Lawrence Reed, "All that socialism has done for the poor is make sure that they have plenty of company."

Yea, but look at the social reforms and advances in equality in Ireland and Europe over the last 40 years. Just about all of them have been driven by leftwing parties. Even in this country the Labour Party in government has an excellent record on social reform. That has to count for something. (Though it was a FF minister that de-criminalised homosexuality).

This I agree with; as a libertarian I find myself very often agreeing with left leaning and socialist politicians over matters of gay marriage, abortion, etc. Only two days ago I heard an interview with Ming Flanagan (someone I disagree with almost every time he speaks) on News Talk make one of the best and precise arguments for the legalization of Marihuana.

 

[Complainer]

My logic is that there is a huge focus on taxing "the rich" as a solution to all problems. Obama is probably the worst politician for constantly regurgitating the idea that all that needs to be done is take more money from the rich, give it port and middle class people and then everything will be fixed, including the deficit. The slightest bit of economic scrutiny proves this completely illusionary.
Some countries, like Ireland and the UK, are talking about austerity and reducing spending but there have been no net spending cuts. All we have had is new and increased taxes but no reduction in total government spending and no economic recovery.

I don't follow US politics much, but you're wrong to say that there is 'huge focus on taxing the rich' here in Ireland. It actually gets very little coverage, and very little media. It certainly gets very little time in any serious political debates.

No-one is suggesting that it is the sole solution to our woes. But it is certainly a part of the solution.

The logical reason that a wealth tax is not worth doing is that it will encourage wealthy people to leave, rather than attract wealthy people to come here. In the very short term there may be a boost to revenue, but that quickly reverses.

That's a fairly simplistic analysis. There are wealthy people who (shock horror, hold onto your seat) believe that they should be paying more tax, not less - 68% of millionaires in one US survey supported additional taxes - see http://blogs.wsj.com/wealth/2011/10/27/most-millionaires-support-warren-buffetts-tax-on-the-rich/

You say that "every little helps", but I think we are beyond a stage where little amounts will make any difference. We don't need haircuts to spending we need amputations and we want high income earners to come here, not leave.

We certainly have a huge financial gap to close, but every little does indeed help to close this gap. We certainly want people who will spend, and generate exports to come here - but you're not a sole spokesperson for that group. There are wealthy, export-generating people who believe they/we should be paying more tax.

Do you honestly think that you will be able to convince Monaco to not be a tax haven. Or what about the countless Caribbean countries? It is wishful thinking to believe that a concerted effort by all modern western countries can be achieved to introduce a tax that would do long term harm.

Do you honestly think that you will be able to convince South Africa to eliminate apartheid? Do you honestly think that you will be able to convince Myanmar to free Aung San Suu Kyi? Do you honestly think that you will be able to persaude Switzerland to stop laundering mafia money, and al-queda money? Oh right - we've already done the unthinkable, and we can do it again, if we really want.

You make a very good point here. Investors should be driven in their actions by factors surrounding the countries, industries and companies they invest in. But at high tax rates they are less likely to cash in and move investments around. In economic terms this is referred to as regime uncertainty and creates havoc for businesses and investors in their attempts to make predictions about the future.
Drop tax rates and leave them there is the solution.

Or raise the rates, and commit to keeping them high - remove all that nasty uncertainty, and let people run their businesses and investments based on real reasons, not on tax reasons.

I know you weren't thinking about pensions, that is why t was pointed out. And I disagree with your premise that people just simply go with a fund that is suggested to them and don't actively make decisions. Every company that I have worked for has had annual meetings with pension brokers who give an overview of a whole host of investment funds available and what their risks are. People do care about this and if they don't they are being very foolish and cavalier with their money. It is just as easy for someone with a PRSA to have all the money go into non-Irish or non-European funds, no more difficult than for a rich person.

I've been at those annual meetings, and most people come out of the meetings going 'I dunno really' and follow some default recommendation from the fund manager (who will be working hard to avoid any hard questions about the value returned for his commission compared to 'buy the index' strategy.

 

[Chris]

I don't follow US politics much, but you're wrong to say that there is 'huge focus on taxing the rich' here in Ireland. It actually gets very little coverage, and very little media. It certainly gets very little time in any serious political debates.

Yes there is the same focus here and it has already been done with marginal rates of taxation up to 53% and capital gains taxes up to 30%. There was huge debate about how the deficit would be fixed and how much would come from "cuts" and how much from increased taxes during the last election. Election campaigns hardly fall outside the category of "serious political debates".

No-one is suggesting that it is the sole solution to our woes. But it is certainly a part of the solution.

As I already stated, the loudest advocates of taxing the rich are putting it forward as the solution of all solutions. You are also ignoring the fact that taxing the rich will bring in more money in the short term but less in the long term, which will exacerbate the problem. When there is less money for investment in private business there are less jobs created, it is as simple as that.

That's a fairly simplistic analysis. There are wealthy people who (shock horror, hold onto your seat) believe that they should be paying more tax, not less - 68% of millionaires in one US survey supported additional taxes - see http://blogs.wsj.com/wealth/2011/10/27/most-millionaires-support-warren-buffetts-tax-on-the-rich/

No it is not simplistic analysis, what is simplistic is for you to not actually take a closer look at the survey and what those 68% are proposing:

A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income.

You can have $1 million in assets and have a far lower income than $1 million per year. What this survey has achieved is asking those who would not be affected by the higher tax if they would be in favour of it. The survey is flawed from the outset. The results would be totally different if they had only asked those with income above $1 million that would actually be affected.
Buffet is as much a hypocrite as Bono, especially when it comes to the dishonesty over his actual rate of taxation: [broken link removed]
I know, very inconvenient when the truth comes out and blows holes in flawed theories.

We certainly have a huge financial gap to close, but every little does indeed help to close this gap. We certainly want people who will spend, and generate exports to come here - but you're not a sole spokesperson for that group. There are wealthy, export-generating people who believe they/we should be paying more tax.

Then why don't they send a cheque to the revenue if they feel so passionately about it? The answer is that it is all just talk by a few people who are looking for a better image and who would not be affected by the taxes they are advocating. The same people hire tax advisors for their business and personal interests to reduce taxes as much as is possible, but they then advocate higher taxation.

Do you honestly think that you will be able to convince South Africa to eliminate apartheid? Do you honestly think that you will be able to convince Myanmar to free Aung San Suu Kyi? Do you honestly think that you will be able to persuade Switzerland to stop laundering mafia money, and al-queda money? Oh right - we've already done the unthinkable, and we can do it again, if we really want.

Your analogies are completely in reverse, taking ever more money from wealthy people who made their money by other people voluntarily buying their goods and services is immoral and damaging to the economy and a few countries understand this and take advantage of it. Your question should be whether you could/should convince SA to reintroduce apartheid, or Burma to imprison San Suu Kyi again.
You are also not advocating that one country change one policy, you are saying that all countries should introduce a wealth tax of some kind so that rich people have no way of avoiding it. Do you honestly believe that is achievable? Achievable in any time frame that will actually avoid the looming train wreck?
We are in a car heading towards a cliff in thick fog. You don't slow down the car, you stop it immediately. And to clarify, by we I mean Europe and North America, Ireland has already found the cliff.

Or raise the rates, and commit to keeping them high - remove all that nasty uncertainty, and let people run their businesses and investments based on real reasons, not on tax reasons.

Truly amazing, you are contradicting yourself within two lines of text. Why do you think rich people would be inclined to invest more if the tax rates were increased more? Why would a business person or investor take on the same risk, but enjoy less of the reward? Taxes have the exact opposite effect to what you are suggesting; they increase uncertainty and reduce the incentive to invest!

I've been at those annual meetings, and most people come out of the meetings going 'I dunno really' and follow some default recommendation from the fund manager (who will be working hard to avoid any hard questions about the value returned for his commission compared to 'buy the index' strategy.

The point is that it is just as easy for an average Joe to invest their entire pension outside the country as it is for a rich person to do so. Whether they do so or not is up to them.

 

[Firefly]

We certainly have a huge financial gap to close, but every little does indeed help to close this gap.

Let's say for a minute that we did "tax the rich". And let us also imagine that this had no negative consequences, ie the rich don the green jersey and suck it up for the good of the country, by paying this tax and not moving any assets off-shore. Heck, any "rich" investors and business people contemplating expanding their businesses or opening new ones carry on as normal.

2 simple questions if I may:

1. Roughly how much extra tax income do you think would be generated annually? Anything over 2bn a year and I'd like something to back this up.

2. Where will the balance come from to meet our 15bn+ annual deficit?

Firefly.

 

[Firefly]

Or raise the rates, and commit to keeping them high - remove all that nasty uncertainty, and let people run their businesses and investments based on real reasons, not on tax reasons.

Not working out to well in France at the moment is it?

http://www.ft.com/cms/s/0/21c53a2e-fc30-11e1-aef9-00144feabdc0.html#axzz26EuTEEp3

“There is a real growing feeling that ‘the rich’ are being hunted down in France at the moment,” said Bernard Grinspan, managing partner of the Paris office of Gibson Dunn, the law firm. “They are being stigmatised and this is encouraged from the top. A number of people left before the election and more since, especially people in the private equity world. Entrepreneurs are very worried.”

 

[Chris]

Not working out to well in France at the moment is it?

http://www.ft.com/cms/s/0/21c53a2e-fc30-11e1-aef9-00144feabdc0.html#axzz26EuTEEp3

“There is a real growing feeling that ‘the rich’ are being hunted down in France at the moment,” said Bernard Grinspan, managing partner of the Paris office of Gibson Dunn, the law firm. “They are being stigmatised and this is encouraged from the top. A number of people left before the election and more since, especially people in the private equity world. Entrepreneurs are very worried.”

So much for all those rich people in favour of higher taxes. It is morally disturbing to think that the French government want to take 75% of somone's income and then on top of that and them for 19% in VAT when they spend their remaining 25%. That's an 80% rate of tax!

 

[Firefly]

So much for all those rich people in favour of higher taxes. It is morally disturbing to think that the French government want to take 75% of somone's income and then on top of that and them for 19% in VAT when they spend their remaining 25%. That's an 80% rate of tax!

Shure haven't they loads of money

 

[circle]

Yea, but look at the social reforms and advances in equality in Ireland and Europe over the last 40 years. Just about all of them have been driven by leftwing parties. Even in this country the Labour Party in government has an excellent record on social reform. That has to count for something. (Though it was a FF minister that de-criminalised homosexuality).

Two independent senators more affiliated with Labour than FF did somewhat force Máire GQ's hand by bringing the case to the ECHR.

In fairness Labour usually deliver social change in coalition with FG, for example both Divorce Referenda were under FG/Lab.

 

[Purple]

Two independent senators more affiliated with Labour than FF did somewhat force Máire GQ's hand by bringing the case to the ECHR.

In fairness Labour usually deliver social change in coalition with FG, for example both Divorce Referenda were under FG/Lab.

Can you post some detail please?