http://www.seangabb.co.uk/flcomm/flc168.htm
Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 168
19th February 2008
Are the non-Domiciled Rich and the City
Good for England?
by Sean Gabb
On my way out of the house this morning, I was called by a BBC
researcher to discuss my opinion of non-domiciled tax status. As my
opinions were not the ones expected, our conversation did not lead to
any broadcast. But I was rather pleased with what I said, and I might as
well spend the rest of my railway journey writing it down.
For my readers who live abroad, I should explain that resident
foreigners in this country enjoy significant tax privileges. I, as a
British citizen resident in the United Kingdom, pay tax on my income
earned here and elsewhere in the world. A foreigner living here, who can
persuade the authorities that his permanent residence is outside the
United Kingdom, pays tax only on what income he earns in this country
and on what income he brings in from abroad. Whatever he earns abroad
and leaves abroad attracts no tax. That is why so many rich people have
moved to London.
This privilege is now under attack. During the past eleven years, the
British State has almost doubled in size. The Ministers have justified
this by an endless chant of "investment in essential public services".
In truth—whether to a few white proles, or to Shopping Coordinators
for Bearded Men with HIV, or to the various Tarquins and Jaspers who get
the contracts to redesign logos and headed paper every time a Ministry
name is changed—our tax money has gone on raising up an army of Labour
voters. So far, most of us have not paid attention to the systematic
looting required for this. Some of it was cleverly disguised. Much of it
was enabled by an expansion of the world economy that brought in more
revenue without increases in the rates of tax.
This may now change. If we go into recession, the amount of tax paid
will fall at current rates. At the same time, there is no room left for
imposing taxes that will not be noticed and felt. Therefore, if the
payroll vote is to be kept on, let alone expanded, the Government must
now openly increase taxes or inflate or both.
That is why the non-domiciled are to be hit with a poll tax of £30,000
per year. This will not put off the fiscal crisis. At £800 million, the
sum projected is barely a fifth of one per cent of total government
spending. Nor will it last very long. The non-domiciled are already
threatening to leave. That means a farewell to Madonna and to Roman
Abramovich. More im****tantly, it means a farewell to some of the most
dynamic people in the City of London. To raise barely enough cash to run
the National Health Service for a week, the Government is prepared to
lose people who contribute billions in employment and indirect tax, and
to damage a vast financial machine that generates more than a third of
the national income.
But when a state is hungry, every little extra can look tasty. That it
may not last beyond the next election is not something at all likely to
worry our present set of politicians.
I think the lady from the BBC expected me to run out of breath as I
denounced the scheme. She had me listed on her database as Director of
the Libertarian Alliance, and took it for granted that I opposed taxes
and sup****ted the rich in general and the City of London in particular.
Well, I did denounce the taxes. They were bad, I said, because they
stole the produce of a man's labour: taxing is enslaving. They were bad,
I added, because they enabled government spending that, even when not
obviously wasteful or oppressive, tended to corrupt both direct and
indirect recipients.
Her problem started when I moved to the rich and all those City people.
Good riddance to the lot of them, I said. If it needed a tax to get them
out of England, I might almost find something nice to say about taxes.
That was the end of our conversation. The BBC lady made her excuses and
rang off. I imagine she then did a search in her database for Tory Boy
Intellectual, and was soon hearing a lecture about London as "the Jewel
in the Crown of the British Economy".
I suppose I should explain myself. There are those who think
libertarianism involves a defence of riches and of the rich. Some
libertarians seem to agree. I do not. A libertarian is someone who wants
to be left alone, and who wants to leave others alone, and who wants
others to be left alone. People must be taken as the owners of their
bodies and of what they create in or appropriate from the external
world.
Given that all exchange and other association needs therefore to be
voluntary, we move to an endorsement of what is called the free market.
If some people do better in life in others, so much the better for them.
If they contrive to pass on some part of their success to their
children, so much the better again.
This is not, however, an endorsement of actually existing capitalism. A
free society is not Tesco minus the State. It is a place of small
craftsmen and farmers and traders, of artists and of unlicensed doctors
and lawyers, and of others needed if individuals and free associations
of individuals are to live well. We cannot say much more than this about
the arrangements of a free society. But we can be sure it would have no
place for big business as it now is found.
Big business cor****atism, I would never seek to deny, is the best
economic model humanity has known in over a century. It does generate
vast amounts of wealth, and does ensure that much of this is distributed
with some approximation of justice. Give me a choice between what we
have and any of the state socialisms tried or recommended since Plato,
and there is no doubt what I should choose. Nor is there any doubt,
though, that the civilised nations made a big collective mistake around
the middle of the 19th century. A system of scientific and industrial
progress that might have grown into an unmixed blessing was partly
hobbled and made into a new instrument of class domination by laws that
allowed firms to incor****ate and that gave shareholders limited
liability for the debts of firms.
The result was a channelling of investment into firms that would never
have been trusted had investors continued to face the risk of joint and
several liability for debt. As these firms grew to enormous size, they
monopolised or cartellised whole markets. They accepted and often
quietly called for schemes of tax and regulation that harmed them, but
harmed them less than their smaller competitors. In Britain and America,
they demanded the underwriting by the State of their foreign expansions.
To ask whether big business bought or were colonised by the political
class is irrelevant. All that matters is that we live in a world where
political power and cor****ate wealth are possessed by different wings of
the same ruling class. It is a ruling class that presides over whole
nations of people transformed by brainwa****ng and mild but continuous
discipline from human beings to human resources.
More than any other financial centre, the City of London stands as the
heart and mind of the global cor****ate system. Every statistic the BBC
lady was hoping I might drool on air—that there are more American
banks in London than in New York, that German banks employ more people
in London than in Frankfurt, that over a third of all currency
conversions take place in London, and so on and so forth—is further
condemnation for me.
Anyone who regards the City as identical with free market liberalism is
deceived or trying to deceive. It is a place where markets clear, and
where profit comes from working out returns in fractions of one per
cent. It is one of the few places where reality and the textbook world
of perfect competition nearly merge. It is, however, a place maintained
in being by the scheme of state-granted privilege that is limited
liability. At the very best, its activities are useful to protect us
from high taxes. But in a world of free societies, there would be no
City of London or anything like it.
A further evil of the City brings me back to the non-domiciled rich.
Whatever their immunity from income tax, these are people who pay large
amounts of indirect tax. They hand this over without much resistance or
complaint, and they hand over large amounts. Political quietism plus
great wealth is always dangerous to freedom. When the quiet rich are
also foreigners, or at least highly mobile, is still worse. They will
not protest at any use of their tax money to oppress other people than
themselves. The moment their own freedom is infringed, they will retreat
to somewhere more congenial.
For all the airs and graces they try to assume, this is what makes the
non-domiciled rich different from the old landed aristocracy. Though
tiresome in their defence of legal privilege and unearned wealth, these
latter were incidentally useful in slowing the rise of big business
cor****atism. Like the rest of us, they had nowhere to run to, and were
by training and inclination the natural leaders of resistance. Roman
Abramovich and Madonna are none of these things. They live among us, but
are in no sense with us. The same is true for the more anonymous bankers
and fund managers who have for the past generation found this country
useful as a trading platform. The same is true of the rich in general.
Unlike the workers, who may have little else, the rich have no country.
Just about the only very rich foreigner possessed of any public spirit
is Mohammed al-Fayed. He expresses that spirit in what may seem an
eccentric cause. But he certainly cares something about this country. He
is also domiciled here and is subject to the same taxes as the rest of
us. Not surprisingly, he is hated and reviled by the establishment
media, and has failed to obtain a British pass****t in an age when these
are handed out to any parasite who can hold his place on the underside
of a lorry.
In closing, Gordon Brown and his Ministers do not intend to do well by
us. They are traitors to us in their external policies, and rapacious
tyrants in all their internal dealings. But their desire for short term
gain may set us on the path to a better world. And if they are not to be
thanked for this, I am not inclined to join in the chorus of
disapproval.
--
Sean Gabb
Director, the Libertarian Alliance
sean@[EMAIL PROTECTED]
(remove "nojunk")
http://www.seangabb.co.uk
http://www.libertarian.co.uk
Buy my new book - "The Column of Phocas: A Novel of Murder and Intrigue
Set in
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(publication date: 4th August 2006)
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