Tax burden must fall on the rich
Tuesday 22nd June 2010, 3:00PM BST.
JERSEY can still claim to be a location where individuals and businesses pay relatively low taxes, but how long that claim will remain tenable is open to serious question.
Yesterday Islanders, who are already deeply apprehensive about the potential impact of a planned programme of widespread public sector cuts, learned that a further £50 million in taxation is being sought to address the so-called structural deficit and to protect those essential services which must continue to operate.
Less dramatically but no less significantly, today sees the publication of a consultation paper on business taxation. Although this states that zero-ten, the corporate tax formula designed to make the Island compliant with EU standards, is not dead, the consultation and review would not be necessary if the measure – and the revenue that it currently underpins – were not on shaky ground.
Against this background, it is clear that Treasury Minister Philip Ozouf and his Council of Ministers colleagues are grappling with fiscal problems of a major order and that failure to solve them would have severe consequences for the Island as a whole.
If, however, ministers are to take the public with them on the journey towards balanced books, they must be in no doubt whatsoever that increased burdens of taxation must not fall on the poor or on much-put-upon ‘middle Jersey’.
Today, as UK Chancellor of the Exchequer George Osborne was preparing to deliver his emergency Budget, it was reported that he had promised that the rich would bear the brunt of tax increases. This is what Jersey people – with the possible exception of the well-off who at present escape heavy taxation – will expect to hear from their own Chancellor, Senator Ozouf.
With an increase in GST and a massive hike in the share of the rates received by the States now being mooted, ordinary Islanders will be in a mood to demand that the tax burden is shared as fairly as possible in any proposals that are finally considered by the House. They will also demand that the States sweep their own side of the street – perhaps beginning by freezing some of the manifestly absurd salaries that are being paid to senior public servants and privileged groups such as police officers.
Given that both raising the Social Security contribution ceiling and the idea that there should be a rate of tax higher than the standard 20 per cent for people earning over £100,000 a year are now being floated as possibilities, there are signs that senior politicians are beginning to sense how powerfully feelings are running. That these sacred cows are even being considered for slaughter indicate that we are on the brink of a new era.
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Never thought I would agree with a JEP Leader but for once well done, spot on tax the rich share the burden fairly however with our government of millionaires is that really likely
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About time too.
Let them leave if they don,t like it it would bring everyday prices down and we all will be better off.
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At the risk of provoking a storm of protest, the better off do pay a larger burden. 20% of £80,000 is a bigger amount than 20% of £30,000.
And abusive replies of tax the fat cats, etc, do not change that, they just pander to populist politics…
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Euan Mee 3.
I do not think that raising taxes for the better off is at all unreasonable. While I believe that we must reward hard work and encourage those who have skills and talent to succeed, I also believe that the riches success brings should be shared with society…and those who can spend to dine out more than some people can earn in a week have no legitimate grounds for complaint.
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It won’t happen. The report on the states website is blatantly slanted to push Senator Ozouf towards raising rates and GST.
But the real issue isn’t about hard-pressed middle Jersey. This is about the fact that while we have the image of Millionaire’s Row, those at the bottom of the pile are having to live on charity handouts. Pushing up rates and GST – both of which are regressive taxes, which hurt the poorest most – will drive many people into real poverty.
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I quite agree that the wealthy should pay more tax.
Some multi millionaire have letters from the tax department stating they will only ever pay 20k tax per annum – and thses are people with 10s if not 100s of millions.
Most well off people have their money hidden in trusts and companies, not just sat in the bank, so their wealth will be hard to track down.
Jersey should not be allowing the continual immigration of people to the island only capable of earning low wages, that is why there is such a big divide in income.
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Born Warrior #4
“While I believe that we must reward hard work and encourage those who have skills and talent to succeed”
Well said
I agree completly.
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6. Overpopulated – most 1-1Ks are not paying 20% – it all depends on their agreement with the Income Tax Department – the majority are paying far less than that and even then, they often get out of paying anything at all by various means. They should at least pay 20% but definitely have to pay what they have agreed to pay as a condition of being allowed to live in Jersey. 1-1Ks do benefit the Island as they provide employment and some of their money circulates over here but they should have to pay tax like the rest of us.
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PJG
I have never denied that competition in the workplace drives individuals to their maximum potential/performance. However, I think that the advantage of ‘union’ greatly outweighs the disadvantage of ‘diminished’ incentive…workers need protection.
And although I am a firm believer in meritocracy, I still lean toward equality.
Talent must always be nurtured and success rewarded…but a percentage of anything gained from success must be redistributed back to the weaker members of the collectivity – even to the skivers – hence my comment!
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As £100k is well above the average it would be useful to know just how many would be bought into this new high tax bracket. Whilst it would be nice to take more money from this group, are there enough of them to make a difference to us peasants? If we set the rate too high many will leave and we could end up worse off than we are now.
Whilst many in Jersey aspire to the Socialist dream of lining the rich up against a covenant wall and seizing their wealth, by removing those who generate wealth these gains have been very short lived.
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Here’s a fact (not a Nellie wildly inaccurate stereotype): 25% of the tax take is paid by the top 5% of wage earners. So chase the top 5% wage earners away, and you lose 25% of your tax income. That’s a big part of the funding for schools, hospitals, emergency services, etc. You may think that’s progress towards your socialist nirvana, I call it cutting off your nose to spite your face…
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#7 PJG.
Nice bit of selective quoting.
You weren’t quite smart enough to leave out “While” at the beginning. It rather gives the game away that there was more to follow.
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11.Euan Mee – I didn’t even mention top wage earners – I was discussing 1-1Ks and my facts are totally correct.
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If the rich are heavily taxed, they will take their riches elsewhere. Jersey will return to the country bumpkin days before finance.
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Jerseys tax burden is already heavillly slanted towards the higher earners who pay the full rate of tax, social security etc and get zero back from the States in return. If we add to the burden then this section of the workforce who by their very nature are the most mobile will simply take their toys and play elsewhere. And despite this getting the more left wing element excited Jersey’s wealth will vanish with them. The real answer is to sort out our bloated public sector workforce with its infinate layers of management, overpaid consultants and health and safety experts once and for all which will at a stroke remove Jerseys debt concerns and have little impact on the level of service delivered by the States. Chances of this happening……same as turkeys voting for Xmas!
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C Le Verdic #12
Thank you !
That because I did not agree with
“I also believe that the riches success brings should be shared with society…and those who can spend to dine out more than some people can earn in a week have no legitimate grounds for complaint”
Because unlike the now defunct comunist Russia and the 1970s thinking Unions I believe you were brain cell deficient enough to support, I am a firm believer that competition is good for mankind.
To have left out the “While” would have been decietfull, sorry not my style, yours?
There was me thinking natural selection had caused the extinction of the Neanderthal.
The spelling mistake “was” intentional, a little present for you to get your rocks off over.
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#14 They’ll only leave if they are so heavily taxed that it is cheaper elsewhere, it’s about finding the right balance.
And yes, rich people should share more of the tax burden. Their money didn’t magically appear, for the most part it came from ordinary people buying their products, or buying products from the person they inherited it from. Had their products been cheaper they would have made less. Yes, I’ve put it in simplistic terms, but unless someone has found a way to create more hours in they day there really is a point at which earnings just become ridiculous. Since ‘market forces’ often cause these ridiculous salaries (and market forces do tend to favour far less essential jobs) then more of the money should go back into society.
#14 Strangely enough there are places without a finance industry where people have an extremely high quality of life. Money is not everything. And love of money (more likely in a finance centre) does bring with it many nasty traits.
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14 – The country bumpkin days…
You mean the days back when we could afford a house?
The days before Jersey became the overpopulated mess it is now?
The days when we could still walk St Helier after dark without fear?
The days before we had a huge welfare burden and tax deficit?
The days before we decided to open the immigration floodgates and allow anyone in without even so much as checking their criminal records etc?
Hmmm yeah of course we would not want to return to those ‘dark old days’ now would we?
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Hallelujah…is that a small glint of light in the black veil of darkness I see…..the hooray Henry’s of this world need to wake up and smell the coffee,as supressing ones conscience, with a “Let them eat cake ” stance is as crass as it is dangerous..for it just might be your cake “They” decide to eat.
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18 Tobias – I did not say ‘dark days’, I said ‘country bumpkin days’. You should try living in Sark if you would prefer that.
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Leah – You try and remove a potato from a farmer’s field and you will witness ‘nasty trait’.
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No. 14 Those country bumpkin ways before finance would be great. The days when values and morals meant more than money to people. Let those greedy financiers leave this island. We will survive you know! And we will all be happier for it!
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No.16 I think that you have not the brain cells to discuss a point without getting nasty! That was totally unnecessary.
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Those dark old days were the best ever-and we were naive enough to think they would last forever.
Those guilty of ruining jersey should hang their heads.
They put power and money before our health and happiness without a thought for the future.
Whoever said money was the root of all evil knew what he was talking about
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I have never read – except on the Guernsey threads – a greater level of ignorance with regards to the statement “chasing the rich away”.
Do you think they pay much tax at all? Do you not think they use our collective ‘sophistication’ to hide any ‘income’ they make that could be taxable?
If these guys care about the well-being and the continuation of Jersey and Guernsey ‘desirable places to base themselves’ (and apply that to all the little bitty places – the thirty-plus UK involved secrecy jurisdictions), don’t you think they would have some sort of conscience and accept some ‘hike’ (please believe that some sort of ‘hike’ in income tax based on their real earnings’ would mean no change to their lifestyle) they would be clamouring for it?
Take take take
We’re all mugs for believing the spiel.
Nothing to do with ‘socialist utopia’, but harsh economic reality.
Show me the ‘exodus’ after the uk tax amnesty, show me the ‘exodus’ after the continued 50% higher tax band.
Blinded by bling.
Nowhere. That is our destinantion. No sustainability, no forward imagination. Just defunct lawyers and accountants on these blogs that know nothing about anything.
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So people who work hard get hit hardest… realy smart. Build a society rewarding mediocrity! Won’t work, and States Members would be well advised not to go down this path. GST increases much smarter. I am on only 125k, but if they increase rates to 30% I will just have the incremental salary paid off island.
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Sadly there are a few posters that have so little faith in the acceptability of the tired old Thatcherite nostrums that they borrow from Daily Mail leaders and endlessly peddle on here that they have to descend to personal abuse!
To coin a phrase, there is no fool like a climate change denying fool
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27. Pip Clement your ‘coined phrase’ is not relevant to the topic on this forum.
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