Tag Archives: Golden Geese

Biblical Tax Collectors

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David Lesperance and I need to get a move on with publishing The Flight of the Golden Geese. Many of the predictions in the book are coming to pass even before it sees the light of day.

One particular prediction is already happening in the UK. We say that the popular political rhetoric of squeezing the rich ‘until the pips squeak’ is total bunkum. There simply aren’t enough wealthy people around. Taxing them at 100%, or even confiscation, would not generate sufficient funds to cover the waste of profligate politicians. The target for tax collectors has always been the hard working middle classes and upper working classes. Our prediction is that the situation will get even more critical when the mobile rich, the Golden Geese, fly away from increasing tax demands, leaving those suckers with an even bigger tax bill.

Today in the UK, Her Majesty’s Revenue and Customs (HMRC) are experimenting with bully-boy letters sent to a thousand higher rate tax payers demanding to know why their self assessments require the payment of less tax than persons with similar earning profiles. No checking if the assessments are valid and the avoidance of tax is legitimate. A threatening letter was sent to an elderly widow who had made a large charitable donation, thereby legally reducing her liability.

By definition roughly half of tax payers in any profile will be paying less than average. People will end up paying more than they need just for the taxmen to go away. Over the last year the HMRC has been very successful in intimidating more money out of people with this ‘guilty until proven innocent’ approach. Soon we can expect to see these threatening letters rolled out across the whole country.

The HMRC is behaving like their counterparts in the Bible, and like in those times, tax-collectors will become pariahs in society.

France: economic suicide by socialism

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France is dead, only the French haven’t realized it yet. It died on 6 May 2012, when the turkeys in France voted for Christmas. In the final runoff in the election for President of the Republic, socialist François Hollande with 51.63% of the vote defeated Nicolas Sarkozy with 48.37%. France had a new President who was reported to have once said “I hate the rich”.

In his campaign the victor had promised a socialist assault on the rich, by increasing the tax on incomes over €1m, temporarily (where have we heard that before), to 75%. After a raft of tax increases that were intended to raise an extra 30 billion euros in 2013, the Court of Auditors, which oversees the county’s accounts, tell us that the amount raised in a mere 16 billion. And at what cost?

Despite being elected on a anti-austerity platform, Hollande has been forced to implement spending cuts, saying France “cannot live with such heavy debt”. The end of 2013 saw unemployment hit a record high of 11%. There was zero growth in the first three months of 2014, and a significant number of the wealthy are jumping ship – so less taxes will be collected in future.

Just as we say in our upcoming book ‘The Flight of the Golden Geese’, the politics of envy doesn’t work. The state ends up collecting less taxes, and in the process the economy is destroyed.

Contract signed

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David and I have finally signed the contract for Flight of the Golden Geese with Oyster Point Press. We expect the book to be available around September. Between now and then we have the job of getting the marketing started … informing all our contacts in the press and media in order to maximise the impact of the launch. I would be grateful to all the readers of this blog for any help in this endeavour. Please ask any of your contacts in the press and media who would like to know more about the book to send me a message on the Contact page of this website, which will guarantee they reach me.

The streets of London are paved with Golden Geese

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According to the Sunday Times 104 billionaires with a combined wealth of £301billion now live in the UK. London alone has 72 billionaires (39 of whom were not born in the UK), more than any other town: Moscow (48); New York (43). They have bought property, employ staff, and spend money – all of enormous benefit to the British economy. Be quite clear these people disperse huge sums in the economy.

They must not be taken for granted. Or despised for their wealth. They are after all, Golden Geese, and they can fly out as easily as they entered, to the benefit of other economies. But what do the Labour and LibDem politicians want. To introduce a mansion tax, and plan all sorts of other snide taxes to “squeeze them until the pips squeak”. Not that the populists in the Conservative Party are much better.

Of course the visiting super-rich can afford to pay what is to them a drop in the ocean. However, what they see is not a tax grab, rather that they are being treated with contempt, or worse that they are seen as beneath contempt by the politicians who are playing to the masses in order to drum up votes. These are proud people, and be quite sure they will move on. Then the great unwashed, who as in France scream ‘good riddance’, will find themselves having to make up the shortfall in tax revenues.

Take That tax avoiders

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The UK government has in place some very generous tax relief schemes for genuine business investment in British creative industries, with the intention of helping the country’s film, television and video production companies to compete globally.

The HMRC however claim that the system is being abused. Judge Colin Bishopp has agreed with them. A company called Icebreaker, made up of a number of different partner companies, put money into schemes that generated losses of £336million, and so could claim huge tax relief. The tax tribunal ruled Icebreaker was set up as a deliberate attempt to avoid paying tax.

Gary Barlow, Howard Donald and Mark Owen from the pop group Take That – along with manager Jonathan Wild – were among about 1,000 people who put money into the scheme. They will now become liable for the tax.

In the Flight of the Golden Geese both David Lesperance and I are adamant that all investments in such schemes are folly. They will all be outlawed sooner or later, laying investors open to huge repayments, and possibly even fines or worse … jail time. We make it quite clear, the only safe way of minimizing tax liability is to pay up all tax owing and fly the coop to more welcoming climes.

Piketty: Ideology masquerading as Theory

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Thomas Piketty’s book Capitalism in the Twenty-First Century has become a bestseller. It bemoans the fact that he sees the rich get richer, and the poor poorer. His answer: tax the rich until the pips squeak. Turn taxation into confiscation … set income tax rates at 80% or more. It’s unfair that money begets money, so the state must redistribute. The problem is that if there are no rich, there is no money to be-gotten.

Piketty is clearly only interested in developed countries – where he sees the inequality. Wealth is pouring out of the arrogant West, and is ending up elsewhere in the world. Living standards are improving there, at the price of those in the West. What right do we have to keep it all for ourselves, and to distribute it among people who do nothing to generate wealth? We are already seeing a redistribution of wealth. From the US, Western Europe and Japan to China, India, Russia, and who knows maybe some parts of Africa will also get the snouts in the trough. And if the wealthy can hold on to their money, then paying for the exodus of wealth will fall on the middle and lower classes in the developed world.

Even if the wealthy can’t prevent confiscation, then as we say in the Flight of the Golden Geese, much of their wealth will flee grasping jurisdictions, and anyway there simply aren’t enough rich around to fill the money pit that is emerging. A consequence will be less investment, a drop in entrepreneurship, and the centre of gravity of the world’s economy will move on to more welcoming climes.

Piketty claims to have a theoretical justification for his theories, but this is just politics of envy masquerading as the dismal science of Economics. This is ideology donning the mask of theory.

The Fall of the House of Deneuve

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The bottom has fallen out of top of the housing market in France. Falls of as much as 40% have been reported. Film star Catherine Deneuve has failed to sell her magnificent 18th century mansion, complete with lake, moat, and exquisite garden, despite lowering the price. And when the top falls, prices of regular housing are necessarily squeezed downward.

Because of the “we hate the rich” policies of Hollande’s government the market is being hit by a double whammy. French high net worth individuals are leaving the country, and the global rich think twice before investing in France.

Of course if France still had the Franc, the result would be a sharp drop in it’s value. Stuck with the Euro, France will now how to absorb the pressure elsewhere in its economy.

Flight of the Golden Geese

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David Lesperance and I are about to sign the contract for The Flight of the Golden Geese, our book about how the world’s high net worth individuals are fleeing taxation. I’ll let you know when we have finally put pen to paper, and about the publication dates.

Meanwhile, some of you have asked me about the cartoon video that David produced, summarising the attitude of the Golden Geese. In response I have posted it on the video page of this website, or you can find it on YouTube:
http://www.youtube.com/watch?v=u69VNU4pJ4I

Mansion Tax madness

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Hardly a month goes by without some new tax being floated by politicians idea for ripping off the wealthy in the UK; a mansion tax, presently a pipe dream of greedy politicians, is gaining support in both Labour and Liberal Democrat parties. The Liberals are even taking a person’s full property portfolio into account to levy a tax on total assets worth more that £2 million. Knight Frank, the up-market estate agents/realtors, has interesting points to make. “If the £2m threshold were adopted and not increased in line with house price inflation, over the next 25 years a total of 775,500 properties would be dragged into the mansion tax net, including all properties with a current value of £540,000 or more. This means that some first time buyers buying through the government’s help to buy scheme (upper limit £600,000) would be paying a mansion tax before they finished their mortgage term.” Some politicians are even considering taxing jewellery. No surprise then that the rich, the people I call Golden Geese, are running for cover. The politics of envy is making Britain unattractive to the worlds rich. And when they fly away, they take their spending with them.

However, the situation is far worse than the rich leaving. The Knight Frank report is being wildly optimistic. Once a new tax has settled in place, two things happen. Both the threshold level will go down, and the rate being levied goes up. We won’t have to wait a quarter of a century for £2 million to be down to $500,000 (in today’s money), which will drag in many ‘ordinary’ houses in the South-East of England into the net. And expect 1% to become 1.5% and then 2%, and up and up. In order to pay it many householders will have to sell up – the simple fact is that many people living in ‘mansions’ do not have income sufficient to pay the tax demands. The result is a ‘fire sale’ of property, trickling down to a crash in house prices.