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Terry Pratchett wrote a letter to The Times about taxes, reproduced in "A Slip of the Keyboard". In it he says: I have been enormously buoyed up, though, by he

by PaulAJ 8y ago

Terry Pratchett wrote a letter to The Times about taxes, reproduced in "A Slip of the Keyboard". In it he says: I have been enormously buoyed up, though, by hearing from journalists and other pundits that ‘the rich won’t end up paying the 50 per cent income tax because their smart accountants will find a way around it’. When I put this to my own accountant, a senior member of a reputable London firm, he laughed and said: ‘Unless you want to go and live abroad for a very long time, or associate with some extremely unsavoury people, or invest in risky tax schemes, then for someone like you there is really nothing that can be done.’

saiya-jin 8y ago
That ain't true at all, there are tons of options in Europe where you can hide, well anything. UK has their own Channel islands, for various purposes you have Luxembourg, Malta, Switzerland, Monaco and so on. You only need to be resident on paper, never physically set a foot there. Every politician, tax attorney/advisor or tax collector knows this, if they claim they don't they are lying to your face (or are utterly incompetent). Why do you think normal flat in Monaco costs up to 20+ million eur? It is a nice place, but not THAT nice (In MCO case you need only postbox which can be rented cheaply as many professional athletes do... unless you are French citizen, then you are screwed but can go elsewhere)
- graeme 8y ago
  Hide legally, or hide illegally? Pratchett may have been referring to legal methods only.
  - saiya-jin 8y ago
    Of course its legal by laws of the place where it happens. That's why EU has some issue with some of its members like Ireland, or Luxembourg. Hiding usually means just avoiding paying most of the income taxes (ie 5% instead of 40% or even much more in places like Scandinavia). In most countries, tax brackets for really high incomes are just ridiculously high, so everybody seeks to pay less taxes while staying legal. Taxes are a sinkhole from rich payer's perspective - you get back very little and you pay a lot. It's like expecting common Joe not claiming some tax breaks he is entitled to. Why on earth would he not do it?
    - roel_v 8y ago
      No offense, but you don't sound like you know what you're talking about if you don't even seem to understand the difference between 'tax avoidance' and 'tax evasion' (or at least your posts and answers give off the vibe that you're just throwing them all on the same pile of 'paying less taxes, somehow').
      - saiya-jin 8y ago
        I am commenting only on tax avoidance (legal optimization), not tax evasion (illegal, don't know much about that). What exactly is untrue in my posts? Happy to learn more. My posts are quite generic for the topic, since we're on public internet forum but they come from my knowledge on this topic (which might be obviously invalid).
- heavenlyblue 8y ago
  >> resident on paper Not true for Monaco. They will go to such lengths as watching the CCTV footage that had been recorded of you in order to see if you are actually present in the country.
  - saiya-jin 8y ago
    Well, then how come most of olympic athletes from my home country have permanent(=tax) residence there? I can guarantee you they are not living there at all, nor do they rent any real apartment (which is 20k+ eur/month unless you are a Monaco citizen). As I said if you are French citizen all this tax haven sugar isn't valid for you, Monaco banks will report you to French authorities, but for rest of the world it works (unless something dramatically changed in last year or two).
    - heavenlyblue 8y ago
      So it is for the UK. I am actually not sure about the exact details, but the change happened one or two years ago.
- s3nnyy 8y ago
  > "You only need to be resident on paper, never physically set a foot there." Not true for Switzerland: You have to be 6 months per year here to officially / taxwise "live here". Otherwise, you lose your permit. The same is true for Singapore, I believe.
  - saiya-jin 8y ago
    You're right, I've listed various European tax havens and made a blank statement which is true only for some of those. I don't claim to know intricate details of each of those, but even as an relative outsider these things are not exactly top secret. It was and most probably still is true for Monaco for example. If you come as an outsider to Suisse, private banks/tax companies will either refer you to their branch in place where this applies to you, or if your net worth is high enough (can't remember exact threshold but it should be in 5 mil CHF ballpark and above), you can literally buy citizenship and you're covered (ideally in Zug/Luzern as one can witness in local property market there but it always depends on the case).
    - s3nnyy 8y ago
      No, you CAN NOT buy citizenship in Switzerland, not even in Zug. You can however get a permit to stay that is renewed every year, if you're wealthy (defined as: sustain life here without the need of work). The threshold is way lower than 5 million and is decided case-by-case.
  - hyperpape 8y ago
    In the case of Puerto Rico, it's apparently the case that you can land your jet there, refuel, step outside, and count that as a day on the island: https://www.gq.com/story/how-puerto-rico-became-tax-haven-for-super-rich https://www.gq.com/story/how-puerto-rico-became-tax-haven-fo....
    - Scoundreller 8y ago
      There must be a lot of demand for flights that leave at 12:30AM for the mainland and return at 11:00PM (just in case there's a delay).
djrobstep 8y ago
The trick to getting the rich to pay their taxes is to simply seize their companies and keep the profits.
- thaumasiotes 8y ago
  It's been tried.
  - djrobstep 8y ago
    You mean in Norway? Yes, it works great. 70% of the country's non-housing wealth is in public ownership.
    - pjc50 8y ago
      I don't think Norway got rich by seizure, rather by oil?
    - ChrisLomont 8y ago
      They have a massive state oil fund of size about 3x GDP. If the US had such a fund, it would be worth 60T, about double the value of all US housing stock. Not every country has that luxury. And Norway didn't get there by seizing rich people companies to make them pay taxes. The problem with picking one place your idea (sort-of) worked is you may miss the overall trend. Try picking all places the rich have had their companies seized and see how it plays out overall.
      - fulafel 8y ago
        There was a recent comic strip where a robot uprising used swords and spears due to using historical data for training.. sometimes using historical averages is not valid.
        ChrisLomont 8y ago
        >sometimes using historical averages is not valid. True, but more often historical behavior is the correct prediction looking forward. The future is not likely random in all behavior. So your claim is only true when it's demonstrated that the historical averages are no longer valid ... There are countries right now failing after seizing wealth from their citizens (Kim in NK, Marcos in Phillipines, Mugabe in Zimbabwe, Chavez in Venezuela, Pot in Cambodia, among others). France recently tried it for a season, and enough rich and wealth left the country that they reversed it almost immediately. Are there any that have recently prospered as a result of seizing the wealth of their rich?
pjc50 8y ago
The risky tax schemes are definitely ongoing. The bar is gradually raised, and every time this is done we hear about another group of people left swimming naked by the tide. Recent examples I can think of include celebrities: https://www.bbc.co.uk/news/uk-politics-18531008 https://www.bbc.co.uk/news/uk-politics-18531008 and Rangers football club (paying its staff through trusts in the Isle of Man)
lordnacho 8y ago
This seems utterly unlikely. For guy who is reliant on intellectual property you'd think there's loads of options. But the other thing to know about the tie-wearing professions is that although one guy says something, another may say something completely different. Aside from not being alive, what prevents Terry Pratchett from moving to some island to write his next book?
- kamarg 8y ago
  That's exactly what his tax guy said he'd have to do. He couldn't avoid the tax unless he lived abroad or does business with unsavory types.
  - lordnacho 8y ago
    What about the football players who sell their image rights? They have to stay in the UK to play.
    - kamarg 8y ago
      I don't have an answer. I'm' not a tax expert and certainly not one in the UK. My earlier comment was just reiterating what part of the gp stated that seems to have been missed.

by PaulAJ 8y ago

saiya-jin 8y ago

That ain't true at all, there are tons of options in Europe where you can hide, well anything. UK has their own Channel islands, for various purposes you have Luxembourg, Malta, Switzerland, Monaco and so on. You only need to be resident on paper, never physically set a foot there. Every politician, tax attorney/advisor or tax collector knows this, if they claim they don't they are lying to your face (or are utterly incompetent). Why do you think normal flat in Monaco costs up to 20+ million eur? It is a nice place, but not THAT nice (In MCO case you need only postbox which can be rented cheaply as many professional athletes do... unless you are French citizen, then you are screwed but can go elsewhere)

graeme 8y ago
Hide legally, or hide illegally? Pratchett may have been referring to legal methods only.
- saiya-jin 8y ago
  Of course its legal by laws of the place where it happens. That's why EU has some issue with some of its members like Ireland, or Luxembourg. Hiding usually means just avoiding paying most of the income taxes (ie 5% instead of 40% or even much more in places like Scandinavia). In most countries, tax brackets for really high incomes are just ridiculously high, so everybody seeks to pay less taxes while staying legal. Taxes are a sinkhole from rich payer's perspective - you get back very little and you pay a lot. It's like expecting common Joe not claiming some tax breaks he is entitled to. Why on earth would he not do it?
  - roel_v 8y ago
    No offense, but you don't sound like you know what you're talking about if you don't even seem to understand the difference between 'tax avoidance' and 'tax evasion' (or at least your posts and answers give off the vibe that you're just throwing them all on the same pile of 'paying less taxes, somehow').
    - saiya-jin 8y ago
      I am commenting only on tax avoidance (legal optimization), not tax evasion (illegal, don't know much about that). What exactly is untrue in my posts? Happy to learn more. My posts are quite generic for the topic, since we're on public internet forum but they come from my knowledge on this topic (which might be obviously invalid).
heavenlyblue 8y ago
>> resident on paper Not true for Monaco. They will go to such lengths as watching the CCTV footage that had been recorded of you in order to see if you are actually present in the country.
- saiya-jin 8y ago
  Well, then how come most of olympic athletes from my home country have permanent(=tax) residence there? I can guarantee you they are not living there at all, nor do they rent any real apartment (which is 20k+ eur/month unless you are a Monaco citizen). As I said if you are French citizen all this tax haven sugar isn't valid for you, Monaco banks will report you to French authorities, but for rest of the world it works (unless something dramatically changed in last year or two).
  - heavenlyblue 8y ago
    So it is for the UK. I am actually not sure about the exact details, but the change happened one or two years ago.
s3nnyy 8y ago
> "You only need to be resident on paper, never physically set a foot there." Not true for Switzerland: You have to be 6 months per year here to officially / taxwise "live here". Otherwise, you lose your permit. The same is true for Singapore, I believe.
- saiya-jin 8y ago
  You're right, I've listed various European tax havens and made a blank statement which is true only for some of those. I don't claim to know intricate details of each of those, but even as an relative outsider these things are not exactly top secret. It was and most probably still is true for Monaco for example. If you come as an outsider to Suisse, private banks/tax companies will either refer you to their branch in place where this applies to you, or if your net worth is high enough (can't remember exact threshold but it should be in 5 mil CHF ballpark and above), you can literally buy citizenship and you're covered (ideally in Zug/Luzern as one can witness in local property market there but it always depends on the case).
  - s3nnyy 8y ago
    No, you CAN NOT buy citizenship in Switzerland, not even in Zug. You can however get a permit to stay that is renewed every year, if you're wealthy (defined as: sustain life here without the need of work). The threshold is way lower than 5 million and is decided case-by-case.
- hyperpape 8y ago
  In the case of Puerto Rico, it's apparently the case that you can land your jet there, refuel, step outside, and count that as a day on the island: https://www.gq.com/story/how-puerto-rico-became-tax-haven-for-super-rich https://www.gq.com/story/how-puerto-rico-became-tax-haven-fo....
  - Scoundreller 8y ago
    There must be a lot of demand for flights that leave at 12:30AM for the mainland and return at 11:00PM (just in case there's a delay).

djrobstep 8y ago

The trick to getting the rich to pay their taxes is to simply seize their companies and keep the profits.

thaumasiotes 8y ago
It's been tried.
- djrobstep 8y ago
  You mean in Norway? Yes, it works great. 70% of the country's non-housing wealth is in public ownership.
  - pjc50 8y ago
    I don't think Norway got rich by seizure, rather by oil?
  - ChrisLomont 8y ago
    They have a massive state oil fund of size about 3x GDP. If the US had such a fund, it would be worth 60T, about double the value of all US housing stock. Not every country has that luxury. And Norway didn't get there by seizing rich people companies to make them pay taxes. The problem with picking one place your idea (sort-of) worked is you may miss the overall trend. Try picking all places the rich have had their companies seized and see how it plays out overall.
    - fulafel 8y ago
      There was a recent comic strip where a robot uprising used swords and spears due to using historical data for training.. sometimes using historical averages is not valid.
      - ChrisLomont 8y ago
        >sometimes using historical averages is not valid. True, but more often historical behavior is the correct prediction looking forward. The future is not likely random in all behavior. So your claim is only true when it's demonstrated that the historical averages are no longer valid ... There are countries right now failing after seizing wealth from their citizens (Kim in NK, Marcos in Phillipines, Mugabe in Zimbabwe, Chavez in Venezuela, Pot in Cambodia, among others). France recently tried it for a season, and enough rich and wealth left the country that they reversed it almost immediately. Are there any that have recently prospered as a result of seizing the wealth of their rich?

pjc50 8y ago

The risky tax schemes are definitely ongoing. The bar is gradually raised, and every time this is done we hear about another group of people left swimming naked by the tide. Recent examples I can think of include celebrities: https://www.bbc.co.uk/news/uk-politics-18531008 https://www.bbc.co.uk/news/uk-politics-18531008 and Rangers football club (paying its staff through trusts in the Isle of Man)

lordnacho 8y ago

This seems utterly unlikely. For guy who is reliant on intellectual property you'd think there's loads of options. But the other thing to know about the tie-wearing professions is that although one guy says something, another may say something completely different. Aside from not being alive, what prevents Terry Pratchett from moving to some island to write his next book?

kamarg 8y ago
That's exactly what his tax guy said he'd have to do. He couldn't avoid the tax unless he lived abroad or does business with unsavory types.
- lordnacho 8y ago
  What about the football players who sell their image rights? They have to stay in the UK to play.
  - kamarg 8y ago
    I don't have an answer. I'm' not a tax expert and certainly not one in the UK. My earlier comment was just reiterating what part of the gp stated that seems to have been missed.