WE are told repeatedly that Jersey is not a tax haven; it is an offshore finance centre.
We have a flat rate of tax at 20% that applies to everyone — apart from finance businesses (10%) and foreign-owned non-finance businesses (0%).
This flat rate is even supposed to apply to wealthy 1(1)K residents who are required to pay a ‘benchmark’ of about £250,000 in tax for the privilege of living in one of our luxury mansions and occupying a few vergées of our precious land.
As a rule of thumb, wealthy residents can expect to pay 20% on their first £1m of (declared) Jersey income; 1% on the next £1m and 0.5% on the rest.
We have 135 such wealthy residents. If they paid their tax at the benchmark rate, that would generate over £33m, almost sufficient to cover GST. That would be handy, wouldn’t you think?
So how much do the wealthy actually pay?
In 2002 they paid £10.7m tax in total, or around £79,000 on average. (Questions in the States, 4 November 2003).
You and I, being taxpayers at the 20% tax rate, might expect the government to chase a better return from its wealthiest residents, so what has the Treasury Minister done about it?
In 2006 Senator Le Sueur managed to extract the magnificent total of . . . £8m from the 135 wealthy residents; an average of only £59,000 each. (Questions, 15 July 2008).
Why is it that the wealthy cannot be made to pay their fair share, or at least the agreed benchmark rates?
Why can’t we vote out a Treasury Minister who prefers to tax the poor via GST rather than the wealthy?
Do I suffer from the politics of envy? I don’t believe so.
I believe in progressive taxation, as does Senator Le Sueur. Even with the addition of GST, he argues that our tax system is ‘mildly’ progressive.
Our tax system is not progressive at all.
Examine, for instance, these effective tax rates:
lLow to moderate earners (marginal rate): 8%.
lModerate to high earners (full rate): 14%.
lHigh earners (20 means 20): 20%.
lFinance sector (before zero-ten): 13%.
lFinance sector (after zero-ten): 10%.
lForeign-owned non-finance (post zero-ten): 0%.
lRichest 1(1)K residents: 6%.
lIf you think this makes sense as tax policy, then you are probably doing well out of it. It makes little or no sense to me. La Rochelle, Bellozanne Road, St Helier.
All those rich people and just £8m tax
WE are told repeatedly that Jersey is not a tax haven; it is an offshore finance centre.
We have a flat rate of tax at 20% that applies to everyone — apart from finance businesses (10%) and foreign-owned non-finance businesses (0%).
This flat rate is even supposed to apply to wealthy 1(1)K residents who are required to pay a ‘benchmark’ of about £250,000 in tax for the privilege of living in one of our luxury mansions and occupying a few vergées of our precious land.
As a rule of thumb, wealthy residents can expect to pay 20% on their first £1m of (declared) Jersey income; 1% on the next £1m and 0.5% on the rest.
We have 135 such wealthy residents. If they paid their tax at the benchmark rate, that would generate over £33m, almost sufficient to cover GST. That would be handy, wouldn’t you think?
So how much do the wealthy actually pay?
In 2002 they paid £10.7m tax in total, or around £79,000 on average. (Questions in the States, 4 November 2003).
You and I, being taxpayers at the 20% tax rate, might expect the government to chase a better return from its wealthiest residents, so what has the Treasury Minister done about it?
In 2006 Senator Le Sueur managed to extract the magnificent total of . . . £8m from the 135 wealthy residents; an average of only £59,000 each. (Questions, 15 July 2008).
Why is it that the wealthy cannot be made to pay their fair share, or at least the agreed benchmark rates?
Why can’t we vote out a Treasury Minister who prefers to tax the poor via GST rather than the wealthy?
Do I suffer from the politics of envy? I don’t believe so.
I believe in progressive taxation, as does Senator Le Sueur. Even with the addition of GST, he argues that our tax system is ‘mildly’ progressive.
Our tax system is not progressive at all.
Examine, for instance, these effective tax rates:
lLow to moderate earners (marginal rate): 8%.
lModerate to high earners (full rate): 14%.
lHigh earners (20 means 20): 20%.
lFinance sector (before zero-ten): 13%.
lFinance sector (after zero-ten): 10%.
lForeign-owned non-finance (post zero-ten): 0%.
lRichest 1(1)K residents: 6%.
lIf you think this makes sense as tax policy, then you are probably doing well out of it. It makes little or no sense to me.
La Rochelle, Bellozanne Road, St Helier.
Article posted on 28th July, 2008 - 3.00pm