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You couldn’t make it up!

September 23rd, 2014. A date for your diary. The venue? Westminster Abbey.

1500 civil servants working for  Her Majesty’s Revenue and Customs are invited to a service at the Abbey to … wait for it … `to recognise the department’s role over hundreds of years in collecting revenue.`

When I first heard of the service, I thought they were asking for FORGIVENESS. But no it’s`to celebrate the vital work we do in HMRC to collect revenue to fund public services and to benefit society as a whole.` Do they actually think their (often incompetent) enforced exactions from the public is virtuous, and that God is going to give them a pat on the back?

And wait for it: they get the Abbey free of charge, although public money (that’s your money) will cover the cost of staff time, as well as travel and subsistence!!!!!

So the next time you go to a church, mosque, synagogue or any other place of worship, demand tax relief on travel expenses … and see where that gets you.

I discovered a new word today

I discovered a new word today. At least it’s new to me … backronym. It’s a clever play on acronym, the latter being an abbreviation formed from most/all of the initial letters of a phrase, and pronounced as a word. Apparently someone called Meredith Williams entered bacronym (a ‘k’ has since been added) for a competition in The Washington Post on 8 November 1983, as a portmanteau of back and acronym.

A backronym is taking a word in common use that is in some loose way connected to the topic at hand, and working backwards to form an acronym. One of the best I’ve come across is ACHOO: Autosomol dominant Compelling Helio-Ophthalmic Outburst. This is sneezing when confronted by bright light.

As far as I can see there are two types of backronym. The first where the name is used as intended (ACHOO), or those that are invented post hoc, and are intended to be humorous. BING, for example, does not stand for Because Its Not Google. What does it stand for? DELTA: Doesn’t Ever Leave The Airport.

Of course, acronyms like LASER or UNESCO are not backronyms, but if we are honest most acronyms we see in the worlds of business and science are in reality backronyms. DARWIN for example is very popular. It can stand for: Data Analysis and Retrieval with Indexed Nucleotide/Peptide Sequences; Design Assessment of Reliability with InspectioN; Developmental Aeronautics Revolutionizing Wind-tunnels with Intelligent systems for NASA; Dynamic Analytical Reporting Web-based Interactive Navigator.

Anyway the backronym that sparked my interest was QUID, the Quasi Universal Intergalactic Denomination, proposed as a “space currency” by Travelex. I was researching for a talk on my off-planet banking idea, when I came across the 2007 PR campaign by the foreign exchange company … it was launching a new form of money for ‘space tourists’ that sensibly had no sharp edges, was chemically inert, and had other advantages over paper/metal money when in space. Sadly it never ‘took off’ (you may groan at the joke).

A ‘Quid Note’ of course was British slang term for the now defunct One Pound Note, withdrawn in 1988 after the pound coin was introduced in 1983. Some people still call the coin a quid, and use phrases like “quids in” meaning to be in profit.

If you know of any backronyms then please pass them on.

Oh Canada!

The Fraser Institute is an independent Canadian educational organisation that researches public policy. On August 11th they published their Consumer Tax Index that tracks the total tax bill of the average Canadian family. They add up the various taxes that a family pays to federal, provincial, and local governments, including income taxes, sales taxes, property taxes, Employment Insurance and Canadian Pension Plan contributions, and “hidden” taxes such as import duties, profit taxes, and gas taxes.

Shock horror. They found that in 2013 Canadian families spent more money on taxes (42%) than on food, clothing, and shelter combined (36%). In 1961 the figures were 34% on taxes and 57% on food, clothing and shelter.

The ten year rule is no more

I recently got a message from a Facebook friend Mike Lapke in respect of the way the US taxes Golden Geese. This is what he said. “One other thing to consider is that the IRS (tax collectors in the US) still require expatriates to pay income tax for 10 years after they leave the country. Technically you could just not pay but you better never ever come back!”

I was sure this was incorrect, but to double check I spoke with my co-author David Lesperance, who is a tax lawyer who has been dealing with US expatriation for over 2 decades. He had the following observations:

The “10 year rule” has been gone since June 2008. It was replaced by a “mark to market” capital gains “deemed disposition” for those Golden Geese who exceed a certain average US income tax paid benchmark OR net worth. The test are contained in IRS form 88854, and those Golden Geese who trigger the test are called “Covered Expatriates”. This deemed disposition just brings forward an existing tax liability that was going to be paid when the asset was sold or when the person died. Often mistakenly called an “Exit Tax”, it is not a new tax, just the triggering of an existing tax (with normal capital gains exemptions and deductions). The 10 year rule applied to certain expatriates prior to June 2008 and even then only applied to the expatriates ongoing US source income and US situs property (which one obviously minimized or eliminated). In short, it had little to no impact on the expatriate when it was in existence. The rules are here (http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax);

With regards to the dismissal of other jurisdictions, Mike makes a common but fundamental mistake of focusing on “tax rates”. Most people do not know the “ Personal Tax Equation” that determines exactly the size of check that a person writes to the US Treasury . Specifically “Taxable Income/Capital gains” times “Applicable Tax Rates” equals “Taxes Owed”. The countries listed all allow a new tax resident to greatly reduce or eliminate their taxable income. The result is that even if they have a higher rate than the US, the amount of tax actually paid is tiny.

This misunderstanding about tax rates is also used by US politicians and others to promote Tax the Rich policies. In August 2011, Warren Buffet pressed a hot button in the American electorate by writing a New York Times op ed (http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=0) where he made the statement that he pays a lower RATE of tax than everyone in his office. This little factoid soon quickly got repeated as “Warren Buffett pays less tax than his secretary”. Even President Obama in his 2012 State of the Union Address, said “but asking a billionaire to pay at least as much as his secretary in taxes … most Americans would call that common sense” (see from 1:16 in this video http://www.youtube.com/watch?v=VbV-1L5JMA4) to draw support for his “Buffett Rule” tax hike proposal (http://en.wikipedia.org/wiki/Buffett_Rule).

President Obama and other proponents of “Tax the Rich” policies who make similar statements seem to be trying to pull a fast one to stoke public outrage. In the real world, Warren Buffet probably makes most of his money in a year by selling shares which have grown in value or receiving dividends. He draws relatively little in the way of salary. Therefore he would mostly be paying at a lower capital gains rate. In contrast, his secretary, Debbie Bosanek draws most if not all of her annual compensation in source deducted salary. She would be paying income tax rates on this salary, along with payroll and medicare tax. Although there is a great deal of controversy about the accuracy of the numbers that Warren Buffett later threw around in interviews (http://www.theatlantic.com/business/archive/2012/01/how-rich-is-warren-buffetts-secretary/252056/), let’s take his numbers at face value and find out what happens when you plug them into the tax equation. Now ask yourself “If you are the US government, would you rather receive Warren Buffet’s check for $6,923,494 (http://www.forbes.com/sites/matthewcampione/2011/10/14/warren-buffetts-tax-return-and-what-congress-already-knew/) or Ms. Bosanek’s check for $21,480?

Death Duties on the Living

It just had to come. HMRC, the tax authorities in the UK, now can’t wait for you to die. They want to take their 40% cut before you pop your clogs. Maybe they are frightened that you’ve found a way of taking it with you?

Anyway, they now propose to charge you death duties in advance of you dying – just in case you find a clever way of hiding the money from them. I suppose it’s preferable to killing you for your money. No doubt that `solution` will be on the agenda soon.

I’m sure they have a committee who sole job is to dream up new ways of stealing from taxpayers. I can see the proposal now: Enforced Euthanasia. Not only do they benefit from an early collection of death duties (euphemistically called Inheritance Tax), it means no future expenditure by the NHS or state pensions. I’m surprised they don’t make smoking compulsory, so they both tax the means of self-destruction, and also lung cancer delivers death duties early.

I read somewhere that Price Waterhouse, or one of the large auditors, have calculated that adding in all the taxes, including death duties, over a lifetime each Brit pays more than 70% of their earnings to the state. I’ve lost the reference, so if anyone knows where to find it please drop me a line.

So it’s no wonder that the rich elderly Golden Geese look longingly towards Canada and Australia, countries with no Death Duties.

Essential Reading

Quarterly Publication of Individuals, Who Have Chosen to Expatriate
https://www.federalregister.gov/quarterly-publication-of-individuals-who-have-chosen-to-expatriate

Every quarter since 1994 the US government has thoughtfully listed those US citizens who have renounced their citizenship and long-term residents who have ended their US resident status for federal tax purposes. In other words all these people are rich – Golden Geese; the poor don’t have a tax incentive to leave. The list makes fascinating reading.

The original political thinking by Congress was that such a list would `name and shame` those included, and this would frighten off others thinking of leaving. Talk about being deluded!

John Gaver of http://TheRichDontPayTax.com has been avidly dissecting the data, and the numbers he quotes are illuminating. In 1998 the figure was 398, in 2013 it was 3001, and in the first two quarters of 2014 it is 1577. Clearly naming and shaming hasn’t worked … quite the opposite. More and more High Net Worth Individuals are considering jumping ship before the US government introduce legislation to make it more difficult/expensive to give up their passports in order to save on tax.

Gaver has a shrewd interpretation of the numbers: “… many expats now look at having their name on one of those Lists, not as a reason to be ashamed, but as a badge of honor, signifying that they were smart enough to leave ahead of the rush. Many of those earlier wealthy expats now point to the recent dramatic rise in renunciations, expressed in the above chart, as evidence that the `rush` appears to have begun.”

Tales my country told me

I Believe in Magic, and that our world is full of magic! Not the nonsense of New Age mysticism, or of Voodoo, not the magic of Harry Potter, rather a sensible age-old sorcery that has its fundamental beliefs fixed by the unchanging human condition. It is a sorcery that has underpinned the development of humanity from the very beginning, but which has been overlooked in the twentieth century’s urge to develop a unifying pseudo-science that ‘explains’ everything. That oversight has led to the myth of control, and acts of hubris on a monumental scale. {How ironic that I found myself teaching for over twenty years at the LSE, Britain’s foremost university of the social sciences, when I believe there can be no science of society – all society is grounded in magic!}

I first learned of magic back in childhood. There the world is a magical place for us all. Within the realm of imagination, within the realm of chance, within the realm of necessity, the ‘improbable’ can and does happen. That having been said, I should add that the ‘impossible’ stays impossible.

Thankfully, this magical world of my childhood still exists in me, and I still see the world of grown-ups as an alien place, an insane place of denial. I have always been able to discard the jaundice of adult disbelief, where so many find themselves jaded by disappointment, and directed by cynicism. For me, the real world inhabited by humanity is still this magical world. It has always been that way, and it always will be: a world of intrigue and subtle influences, a world of an irrational and perverse humanity, a world of wonder!

I learned of this magical reality growing up in the ‘Land of my Fathers’ {the title of the Welsh national anthem} The country of my birth is the Principality of Wales, the runt of a Siamese twin that for nine hundred years has been attached in some form or other to its bigger and more politically powerful English neighbour. Yet over the centuries it has managed to perpetuate a national identity and maintain its own language, thanks to a culture of magic and invention. The country has a fervent and thriving national culture that claims ethnic links stretching back to the prehistoric Celtic invasion of Britain and to the pre-Roman/pre-Christian Druids.

However, that culture was born in magic, not historical fact. Nationalists conveniently forget that the population of Wales trebled in size in the late 19th century, with immigrants needed in both the iron and steel and the coal industries. This is proof, if proof was needed, that nationality is in the software and not the hardware, since the present gene pool does not have a majority Ancient Welsh component! Take myself for example. My surname, Angell, means English – although born in Wales my paternal ancestors had more in common with Hengist and Horsa than with the Druids and their Eisteddfodau. {Hengist and Horsa were two brothers who led the invasion of Britain around 450AD by the Jutes, Angles and Saxons (collectively known as the Anglo-Saxons), who pushed back the Celts to the margins of the British Isles; a druid was a priest/magician of the ancient Celtic tribes; an eisteddfod is a competitive festival of poetry and music.}

Wales has a proud tradition of story-tellers, bards and poets, but they would have borne very little resemblance to the ‘druids’ of present day Eisteddfodau who parade around in bed-sheets, celebrating their links with a mythical Druidic past.

Today’s rituals are in fact an eighteenth century romantic fantasy, dreamt up by the likes of Iolo Morganwg (a.k.a. Edward Williams). He claimed to have uncovered an ancient manuscript that described various Druidic rituals. In 1792 he brought together a group of friends in the first Gorsedd of Bards, not in Wales but on Primrose Hill in London. Of course he had written the mystical book himself! Nevertheless his ceremony continues right up to the present. Well-known bards have included actor Richard Burton, even Rowan Williams, the previous archbishop of Canterbury, and of course the late and much lamented Queen Mum.

Iolo had got wrapped up in what started as the imaginings of seventeenth century English antiquaries like John Aubrey and Inigo Jones, who yearned for an ancient British culture to rival that of Egypt, Greece and Rome, and culminated in the 18th and 19th century Romanticism that fuelled nationalistic fervour across Europe.

Some of the stories, to which the latter-day druids lay claim, such as the Mabinogion {a collection of Welsh folk-tales written down between the 11th to the 13th centuries}, do have an ancient and legitimate pedigree. However, their interpretation, and the motives claimed for them, are pure modern invention.

And the mythology contains pseudo-ancient stories, like that of Beddgelert. Prince Llewelyn the Great returned from a hunting trip to find his baby’s bed-chamber in total disarray and covered in blood. His dog Gellert stood amidst the chaos. Convinced that Gellert had harmed his young son, Llewelyn drew his sword, and in a fury killed the hound.

beddgelert1a

However, the baby was safe. The blood was of a wolf that Gellert had killed in protecting the baby.

Full of remorse, Llewelyn buried the dog in a field in Snowdonia, at Beddgelert {literally: Gellert’s grave}, where he placed a simple stone to mark the grave. No doubt the town elders of nearby Blaenau Ffestiniog had heard of the fable – there are similar examples in the Hindu, Persian, Hebrew and Buddhist traditions. Their town had been on the main stagecoach route to Ireland, however, with the coming of the railways, they were by-passed. Their solution to the financial difficulties: invent the Beddgelert story to bring in the tourists. And they’re still ripping them off – £2 for the car park!

BeddGelert2a

As for attracting tourist money, let’s not forget the village of Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch, with a name containing 58 letters, including 11 L’s, four side by side. This mouthful in the Welsh language means “the church of St Mary in the hollow of the white hazel near the fierce whirlpool of Tysilio by the red cave.”

The village started off as plain old Llanfair Pwllgwyngyll; two words, meaning the Church of Mary in the borough of Pwllgwyngyll. However, in the 1880s a tailor from nearby Menai Bridge decided to add a few more syllables as a publicity stunt to pull in the tourists on their way to Holyhead to catch the boat to Ireland. It worked, and it’s still working. Tourists come from all over the world and pay their money for a platform ticket, to buy trinkets and snacks in local shops, and to be photographed next to the 15-foot sign on the railway station of a village with no other notable attraction. Of course some idiot in the local authority placed a giant lamp-post just in a position that ruins the best shot.

The Welsh were taught this magical lesson (of how to invent a story that would part people from their money) from no less an authority than a Pope, Callistus II, who canonised St David {the Patron Saint of Wales} on March 1st 1123 {March 1st is the Welsh National Day.} Callistus decreed that in the Heavenly Current Account, two pilgrimages to St David’s in Pembrokeshire were worth one to Rome.

Saint David was a Celtic monk, abbot and bishop who lived in the sixth century, and was one of over 500 Welsh saints who helped spread Christianity among the pagan Celtic tribes of western Britain, and beyond. So was David so different from all those other run-of-the-mill saints? The reality was much more mundane. Hordes of British pilgrims, a type of twelfth-century football hooligan, were descending on Rome, causing huge problems for the Vatican. By raising the status of the Welsh saint, Callistus cleverly cut his costs and sent the troublemakers west, to Saint David’s monastery instead.

I can’t leave St. David without mentioning one fact, which in itself could be the basis of a new tourist industry. David was baptized by his cousin, Saint Elvis, who came from Prescelly: that’s right, by Saint Elvis Prescelly. No joke! There really was a St Elvis, and he was St David’s cousin.

But seriously, Vernon Presley, Elvis’s father, named his son after Saint Elvis. Vernon knew that his family originally came from the Prescelly Mountains – that’s the origin of the name Presley. Who knows, maybe among the King’s British fans, two trips to Pembrokeshire will become the equivalent of a visit to Graceland?

That’s enough of Welsh mythology. If I start on about King Arthur and his Round Table we’ll be here all day. But let me get something straight here. I am not being snide or cynical about these myths, legends and tourist attractions. Far from it! I speak of them with a sense of awe, and as a magical inspiration.

I see nothing fundamentally wrong, immoral or deceitful about creating such delusions. As far as I am concerned the behaviour of the good men of Blaenau Ffestiniog and Menai Bridge is typical of the Magic out there in the development of all cultures. Every culture is a collection of delusions, and the rituals that support those delusions for a particular self-selecting grouping of humanity. These delusions make us comfortable in the world, and with ourselves, by reinforcing what we see as virtues, all the while making the dark side disappear. And the delusions that work best are the ones that work on the primitive (and on the child) in us all.

That’s Magic!

Sir Roger Moore: Saint or Sinner?

I was surfing the net today when I stumbled upon roger-moore.com, the official website of Sir Roger Moore, the actor famous for playing the Saint on television, and of course James Bond. I’m even old enough to remember him in the ITV series Ivanhoe.

The lead story was the transcript of a Q&A session with the great man. Someone named Keith Sage, asked if the actor had fond memories of Denham Green, in Buckinghamshire. His answer was informative.

“Hello Keith, I loved living in Denham, and in fact my full title (on getting my Knighthood) is Sir Roger Moore KBE of Denham. I never really wanted to leave, but the tax legislation of the Labour government in the late 1970s meant I was faced with paying 97% and as an actor’s career can be short, in terms of earning decent wages, we have to look after our pennies to see us through our old age which meant I either moved overseas or faced a bleak financial future.”

Who could blame him for becoming an archetypal Golden Goose?

Death and Taxes

Screen Shot 2014-07-29 at 16.05.24
Just returned from a fabulous two week break in Newfoundland. On my last day we were driving out of St. Anthony when I spotted this sign on the side of the road. I just had to get a picture. Poor Newfoundlanders, a short and glorious summer and then a lot of snow. But the taxman is on their back the whole year round.

To Bitcoin or not to Bitcoin

I was attending the Cryptocoin:SpaceBIT launch party at Canary Wharf when I had the pleasure of chatting with Ben Ingram of Swarm, the crowd funding network. He was very convincing about the virtues of Bitcoin, not that I need convincing.

Anyway he mentioned a very interesting fact, which you can check out yourself:
You can book a hotel on Expedia.com using Bitcoins, PayPal or Credit Cards. However, use Expedia.co.uk and the Bitcoin option is missing.

Can any conspiracy theorists out there tell me what .co.uk has against Bitcoins?