@DanNeidle's Threads
My tweet below was unfair to Boris Johnson. It turns out the abolition of industrial buildings allowance *was* driven by EU law considerations, although this wasn't widely known at the time (and I only found out yesterday).
The background is interesting #taxnerdery
The background is interesting #taxnerdery
Because IBAs favoured a particular sector (industry), it was believed they constituted State aid. But because IBAs were introduced before 1973, they were grandfathered and so exempt from the rules.
In the 90s and 2000s, bad people started using IBAs to drive tax avoidance schemes (think - like the film partnerships but using industrial buildings). So HMT/HMRC needed to change the law. But that would lose the 1973 grandfathering.
Chart of the day: the tax burden falling on labour and capital across the EU, as a % of GDP. #taxtwitter
Interesting to rearrange it, ordered by the % tax burden on capital.
Data from Eurostat
Can we increase public spending in the UK without increasing tax on the average worker? What do international comparisons say? My final thread on this theme:
We can plot the level of public spending in each country against the overall direct tax burden on employees - the "tax wedge". Crudely, if a country is above the trend line then the average employee is getting a better deal - more public spending without paying more tax.
Another way to view it: divide the world into quadrants:
1. countries w/ higher public spending than the UK/lower average tax om employees
2. higher public spending/higher tax
3. lower public spending/lower tax
4. lower public spending/higher tax
There is nobody in quadrant 1
1. countries w/ higher public spending than the UK/lower average tax om employees
2. higher public spending/higher tax
3. lower public spending/lower tax
4. lower public spending/higher tax
There is nobody in quadrant 1
Four things many people believe about tax in the UK that just ain't so:
1. "UK corporation tax has been cut over the last 20 years". Nope. The headline rate has been cut, but the base has expanded. The proportion of corporate profits paid in tax has slightly *increased*.
2. "Compared to the rest of Europe, the UK under-taxes wealth and capital". Nope. The UK is unusual for how *high* a percentage of the tax burden falls on capital rather than labour.
How reliable is the @TaxJusticeNet's Financial Secrecy Index? I've been through the UK entry and the answer is: not very. Here's why.
There's a large number of factual mistakes, generally down to mis-reading of sources or use of inappropriate or out-of-date sources.
A more serious problem is the criteria, which push policy preferences that have little or nothing to do with financial secrecy.
