Monday, December 14, 2009
The old, old story: "Soaking the rich" does not work
In Britain, it is particularly foolish -- but hate overcomes the reason of its Leftist rulers. The financial services industry is Britain's biggest earner and they are steadily chasing it away to nearby Jersey, an independent country under the crown but outside both the UK and the EU -- where the movers get tiny taxes and lovely freedom from mountains of bureaucracy!
Britain’s financiers and entrepreneurs are quitting the UK at a rate of 10 a week to avoid Labour’s new 50% taxes. The burgeoning exodus threatens to deepen a £178 billion black hole in the public finances and leave middle-class voters with higher taxes for years to come, figures obtained from Companies House reveal. The number of directors of British businesses registered as living in the low-tax centres of Jersey, Guernsey or the Isle of Man has risen by almost 500 to 6,729 in the past 12 months. The British Virgin Islands is also a popular destination, with 615 directors of UK companies now based in the Caribbean tax haven — an 18% rise on a year ago.
Those known to be fleeing the UK include hedge fund managers, property tycoons, bankers and people who made their money setting up companies organising private healthcare, call centres and luxury holidays. “The UK model is broken,” said Stephen Hedgecock, a partner in Altis, a £1 billion hedge fund company with 35 staff that has relocated to Jersey, leaving only a small presence in London. “It’s not just the 50% rate — it’s National Insurance, the treatment of pensions ... everything. It’s just a ridiculous amount of taxation.”
Russell Newton and Danny Masters, co-founders of Global Advisors, another hedge fund with hundreds of millions of dollars under management, also abandoned London for Jersey’s thriving finance community in the summer.
Another 100 Britons have begun working in the island’s businesses since the downturn began two years ago. The Jersey government said it had seen a 20% increase in interest from people looking at moving to the island. A new marketing brochure published by the island’s authorities promises “in Jersey, keep more of what you earn”. The authorities impose corporation tax at 10% and income tax at 20%. There is no inheritance tax or capital gains tax. Property taxes are also low.
Jersey Finance, an agency set up to attract financial talent to the island, has held a series of private dinners in London to woo new residents. Geoff Cook, the agency’s chief executive, said: “The 50% tax rate does seem to have been the tipping point for many people.” However, the island’s authorities maintain that the rich often favour Jersey because of the easy access to London, the sandy beaches, low crime rates and the use of English as the first language. “There is a lot of interest right now,” said Nigel Philpott, the Jersey government’s head of high net worth residency. “Last year I was getting one or two calls a day from people who wanted to come and join us. Now I get four or five on some days.”
Paul Bater, 52, a former bank manager from Swansea, is so happy with his move to Jersey that he has allowed himself to be used as a case study in promotional literature for Jersey Enterprise. “I love living in Jersey. The pace of life is much more civilised than anywhere else I have worked,” he said.
John George, the owner of Jag Communications, the UK’s third biggest mobile phone retailer, has moved to Guernsey, Jersey’s neighbour. The 48-year-old businessman now commutes by private plane to his company’s office at Perranporth, Cornwall. The journey takes just 30 minutes — and ends at his privately owned airfield. “It’s very easy, very straightforward and I never get stuck at the lights or any of that,” said George. His office is fewer than five minutes from the airfield.
For years considered little more than family holiday resorts, Jersey and Guernsey have become a playground for the rich in recent years, with Michelin-starred restaurants, luxury spas and hotels. Almost one in five of the island’s workers has a job in financial services. There are nearly 3,000 experts who help people set up trusts and companies — a rise of 12% since the onset of economic downturn. It is a similar situation in the Isle of Man, which says it has seen a 20% growth in the non-banking financial sector.
In Britain, the more things change the more they remain the same
Article below by Nick Clegg, leader of Britain's third party, the Liberal Democrats. The British electoral system is certainly a farce and much to blame for Britain's many periods of misrule
For two professions, 2009 has been a shameful year: politicians and bankers. Both had their worst vices and darkest secrets exposed to public view. Such is the disdain in which these two groups are now held, any rational observer would expect significant consequences: radical reform driven through by public outrage. And yet, as 2009 draws to a close, the stark truth is that both politicians and bankers are being let off the hook.
Nothing is fundamentally changing in Westminster or bankers’ boardrooms. Nothing is changing because the two old parties, Labour and the Conservatives, have chosen to duck reform.
In politics, some simple and welcome administrative changes are being made to iron out the worst excesses of the expenses system. But attempts to go further and really clean up politics, addressing the causes of this scandal instead of just its symptoms, have been blocked.
Proposals to give people the right to sack their MPs were voted down by Labour and the Conservatives. Efforts to get big money out of politics have been stifled by the influence of the donors who control those parties. And still there is no action in sight to elect the House of Lords or create a truly fair voting system.
Our political system has become a glorified stitch-up between the two old parties: the warped electoral system that allows Gordon Brown to govern with little more than 22% of the electorate’s vote; the murky system of party funding that allows offshore donors to the Conservative party to avoid answering questions on whether they pay full British taxes; a House of Lords that has become a dumping ground for political poodles obedient to the government of the day; a Westminster culture still steeped in the 19th-century tastes of the political classes (the House of Commons has a shooting gallery, but not a crèche).
Unsurprisingly, the Labour and Conservative parties have an interest in maintaining this system. They act as vested interests do in all walks of life: trying to get away with the minimum amount of change in order to protect their interests. This is a betrayal of everyone who hoped for a silver lining from the expenses scandal — everyone who hoped it would be the beginning of a new, decent political system.
In banking it’s the same story: yes to cosmetic change but no to real reform. The past few months have been dominated by displacement activity. The government talks tough about the excesses of the Square Mile but refuses to reform the City for good. Plans for a one-off tax on bonuses are little more than a symbolic pinprick. It will be easy for banks and their employees to avoid and, because it is a one-off measure, it will change nothing about the fundamentals of the banking system.
For years, banks took mad risks with other people’s money until eventually the system collapsed. But they didn’t have to pay the price for their failure: we did. The banks have had to be propped up at enormous cost to every one of us. Only a fool would say we do not need substantial reform to stop this happening again.
It is vital that the high-street banks on which consumers, households and small businesses depend are never again put at risk by the casino culture of investment banking. As the governor of the Bank of England has repeatedly recommended, we need to separate high-street and investment banking for good.
Until this split can be introduced, the banks will remain the beneficiaries of a unique, open-ended guarantee against failure from the taxpayer, a guarantee for which they should pay a fair price. That’s why Liberal Democrats are arguing for the introduction of a new banking levy of 10% on the profits of the banks until they can be split up.
But why are we the only voice at Westminster arguing for far-reaching reform? The government and the Conservatives claim it’s too tricky to split up the banks. They won’t get behind a tax on banks’ profits that is both necessary and fair. Just as both of the old parties act as vested interests blocking reform of the House of Commons, so too the vested interests in the City appear to have succeeded in getting the old parties to block real reform of the banking system too.
In banking and in politics, then, real reform is being stifled. The consequences will be profound. If we don’t reform politics from top to toe, we leave in place the ingredients for a repeat of this summer’s scandal. If we don’t reform banking, we leave in place the ingredients for another financial collapse sometime in the future. If we do not act now, while momentum and anger still remain, we will live to regret it.
2009 was a year of scandal and wasted opportunities. But history is not yet done with those scandals. There is still an opportunity for real change. We must make 2010 a year for doing things differently.
New respect for Palin
Talk about turning tides. They are ebbing so fast for Zero and flowing in so fast for Sarah Palin that they are crossing each other in the polls.
As TTP's Jack Kelly tells the HFR, Sarah's book tour has become a cultural phenomenon, with thousands of people waiting hours or even days at each stop to meet her. "Could Barack Obama -- who now seems so last year -- inspire that kind of devotion today?" asks Mr. Kelly.
More fascinating than to watch Palin's rise in the public's opinion of her is the rise in the media's opinion of her. The lib journalists well know how savagely they tried to demonize her, which would have destroyed the spirit of most anyone. Yet she has not only withstood it but done so with grace, guts, and humor.
It's really hard not to respect that. So it was an astonishing scene at the Gridiron Dinner last week during the reception before her speech to see all these media honchos crowding around her and asking for her autograph.
Then she stands up in front of them, the folks who have made every attempt to trash and destroy her publicly, and blows them right out of their seats with this lovably clever and hysterically funny speech.
No, they're not going to love her like Zero. But the media libs have a new, a profoundly new, respect for her. The dynamic between Palin and the media has dramatically changed.
Clear evidence is the review of Going Rogue this week (12/07) by New York Times columnist Stanley Fish. Folks, this is in The New York Times! You should read every word. This liberal journalist's conclusion:
"In the end, perseverance, the ability to absorb defeat without falling into defeatism, is the key to Palin's character... The message is clear. America can't be stopped. I can't be stopped. I've stumbled and fallen, but I always get up and run again. Her political opponents, especially those who dismissed Ronald Reagan before he was elected, should take note. Wherever you are, you better watch out. Sarah Palin is coming to town."
Of course, you have a copy of Going Rogue and are reading it, yes? I'm about half-way through. My favorite quote so far is this one. Who can resist a woman who has the moxie to say: "I love meat. I eat pork chops, thick bacon burgers, and the seared fatty edges of a medium-well-done steak. But I especially love moose and caribou. I always remind people from outside our state that there's plenty of room for all Alaska's animals - right next to the mashed potatoes."
The sun is setting on Zero and rising on Sarah. So - the next time you're gloomy and blue over what's happening to our country, repeat two words a few times and you'll find the gloom soon gone with the wind. The two words are: President Palin. See? I bet you feel better already.
Britain's laughable security vetting: "Ten members of a suspected Islamist terror cell, said by MI5 to be plotting to blow up a shopping centre and a nightclub in Manchester, had been granted permission by the Home Office to work as security guards in Britain. The Pakistani students — who were never charged for lack of evidence — were arrested over an alleged plot to bomb Britain last Easter. Police believed they had conducted “hostile reconnaissance” of the Arndale and Trafford shopping centres and the Birdcage nightclub. It has now emerged that in the months before the alleged plot, the men were given licences to work as security guards by the Security Industry Authority (SIA), a Home Office body that regulates the private security industry. They all passed a vetting programme designed to bar criminals and undesirables from taking up sensitive security posts protecting airports, ports and Whitehall buildings from terrorist attack. When arrested, two of the students were working for a cargo firm which had access to secure areas at Manchester airport".
Ireland cuts public sector spending: "Faced with public debts spiralling out of control and a tottering economy, Brian Lenihan, the finance minister, unveiled the toughest budget in the history of the Irish state. He announced cuts in public sector pay and welfare benefits that will save £3.6 billion — about 7% of government spending. Nothing was sacred. The government will save £900m by cutting the pay of every public servant. Those earning under £27,000 a year face cuts of 5%, increasing to 15% for the best paid. The prime minister is facing a 20% drop in salary. Another £900m will be saved from capital expenditure, while cuts in social welfare will save £684m next year. They include reducing the dole from £184 to £176 a week. Disability payments are to be cut by 4% and child benefit by 10%. The tough measures are intended to stop the budget deficit widening beyond £19 billion next year, which is equivalent to 12% of gross domestic product. The deficit is already four times the level allowed by Ireland’s membership of the euro and Brussels wants Dublin to bring it back to within 3% of GDP by 2014. So far the public reaction has been restrained, although the public sector unions have been predictably outraged."
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)
Posted by JR at 1:40 AM