ALEX BRUMMER: Soak-the-rich tax policy drives companies and managers offshore

Tax deadline day in the US is always greeted by queues outside the offices of H&R Block, the specialists in completing America's notoriously complex return.

This year there is a new trend. Wealthy New Yorkers are changing from Big Apple tax residence to low or no income tax zones such as Florida.

In the fine print of Donald Trump & # 39; s epic tax reduction package, which became law in 2017, was a provision that local income tax (in New York it can be as high as 12.7 percent) can only be deducted from federal tax returns up to $ 10,000.

Jeremy Corbyn and Shadow Chancellor John McDonnell want to raise the highest income tax rate to 50 percent and impose taxes on the rich.

Jeremy Corbyn and Shadow Chancellor John McDonnell want to raise the highest income tax rate to 50 percent and impose taxes on the rich.

For Wall Street high rollers, this means a huge tax increase that drives wealth makers to relocate.

The relationship between high taxes, investments and output is sensitive. When President Hollande of France raised the highest income tax rate to 80 percent, there was an immediate exodus of French entrepreneurs and traders to London and other locations.

It is worth keeping this in mind, as Britain is considering a government of Corbyn with plans to raise the highest income tax rate to 50 percent, impose taxes on the rich and possibly up to 10 percent of capital from any company with 250 employees. .

The evidence from New York and France about what happens when governments try to crush the rich is unambiguous. Entrepreneurs are driven out and investments and job creation are stopped.

The dismantling by the Thatcher government of a work structure that ensured that the well-to-do paid more tax than they earned, brought companies, entrepreneurs, and the rich back from abroad.

George Osborne & # 39; s decision to reduce the rise in labor at the highest income tax rate from 50 percent to 45 percent saw no loss of income, as UK employment reached record levels along with tax revenues.

In 2010, corporate income tax revenue of 28 percent was £ 35.5 billion. After the 19 percent discount, corporate tax income increased to £ 58 billion in 2018/19.

You do not have to be a Messianic supplier to recognize that the higher the taxes on the wealthy and the business world, the greater the incentive to invest.

Jeremy Corbyn and Shadow Chancellor John McDonnell will kill the golden goose that has achieved a record job in Britain if they continue to engage in the drenched tax policy that drives managers and companies offshore.

Bad deal

Claims from the non-standard finance (NSF) boss John van Kuffeler that he is a person that investors, regulators and customers can rely on to clean up the UK subprime lending sector by absorbing Provident Financial.

Van Kuffeler, armed with the support of large investors, claimed the victory when the irrevocable support of shareholders exceeded the 50 percent score.

But with 90 percent acceptance required (although it could look for a lower threshold), the complete victory is not guaranteed.

Van Kuffeler & # 39; s case was that the regulated registration of NSF is better than that of Provvy, and his superior knowledge of the company makes his leadership preferable to that of the other friend of the poor, Malcolm Le May.

This may be helpful, since Le May is busy finding a chairman for spread-betting group IG. But Van Kuffeler does not inspire much self-confidence either.

Regulator, the Financial Conduct Authority (FCA), has already intervened to warn NSF against the danger of lifting checks on granting loans and introducing new incentives.

After the London Capital & Finance mini-bond scandal had blown a gap in the FCA's reputation, it is unthinkable that regulators would nod by the NSF deal.

This is particularly the case after the acknowledgment that NSF acted in a technical violation of the Companies Act by distributing dividends from reserves and by an intra-company transaction in 2016.

None of this suggests that Van Kuffeler or NSF are suitable and good stewards to be lenders for Britain's vulnerable and least creditworthy borrowers.

Before a deal is concluded, Van Kuffeler and Le May must set aside their personal ambitions, resign and allow new management teams to settle before conducting a potentially disastrous merger for all involved. That includes the controversial FCA.


Has the despair at Waitrose started? After providing free coffee and copies of the Daily Mail, it jumped on the gin bandwagon and offered tastings at home.

Perhaps also midlife makeovers in the empty aisles.