Vince Cable energised the Lib Dem Spring Conference in March 2008 when he declared:

“The idea that the super-rich should be elevated above taxation is immoral and deeply insulting to those on modest incomes who pay their full whack of tax.”

He ridiculed the £30,000 levy on non doms that had been brought in by the Labour Government. Milking the applause for all it was worth, Vince went on:

“If we are not careful, they say, Russian and Ukrainian oligarcha living in £80m houses will no longer feel welcome and go and live somewhere else. That’s tough. Let them go. We say that foreign expatriates are welcome to live and work in Britain. But when they have been here seven years, they pay British tax like the rest of us. Pay up or pack up.”

The Treasury is now consulting on changes to the rules on non doms but the £30,000 levy – previously mocked by Nick Clegg as a “flea bite” – stays, except for those non doms who have been UK resident for 12 years or more. They will pay £50,000.

The 2010 Lib Dem manifesto (for what it is worth) promised to

reform the system of “non-domiciled” status, allowing people to hold such status for up to seven years; after that tie they will become subject to tax on all offshore income in the same way as domiciled British citizens.

But in the Coalition Agreement this morphed into a vacuous pledge to “review the taxation of non-domiciled individuals”.

The Coalition Government (and that includes you, Vince) says the current rules “can be seen as complicated, difficult to use and unwelcoming to individuals who come to the UK, either permanently or on a short-term basis”.

…the Government believes that non-domiciles should make a greater tax contribution than they do currently. This is especially the case when they have been resident in the UK for many years, benefiting from the UK’s public services, infrastructure and stable political environment over a long period.

The Government believes more stringent tax measures could drive many non-domiciles away or deter them from coming to the UK in the first place.

Non doms will be encouraged to invest in “qualifying businesses” so long as they are actually “engaged in trading which involves the exchange of goods or services with a customer for reward”. No shell companies then.

And non doms mustn’t get involved in anything where

the leasing of tangible moveable property (such as yachts, cars, furniture, pictures) or the provision of personal services (such as nannies, cooks, chauffeurs) is a part of the activities of the business.

No. No. That would never do.

The consultation paper warns that this kind of business must be excluded as it may be used “for non-commercial purposes or direct personal benefit”.

Paragraph 2.48 tells us the Government recognises that complicated anti avoidance provisions could deter non domiciles from investing in the UK.

Best to keep it simple so these Ukrainian oligarchs can understand the rules.

(Since posting this blog I find myself wondering who the dom doms are. The consultation documents are silent on this. How many are British citizens or have dual nationality? What are their countries of domicile? Are these countries of domicile tax havens? How many have been UK resident for, say, over 20 years? And - this is a question for Vince - why do we allow it?)

The end of collective bargaining triggers recall elections in Wisconsin

Next Tuesday (9 August) six Republican State Senators in Wisconsin will face the voters after petitions successfully triggered recall elections.

In January, Governor Scott Walker backed by Republican majorities in the State legislature moved to end collective bargaining for public employees. There was uproar as crowds invaded the State Capitol in protest.

This blog from the Washington Post explains it all.

The unions say big money is being used to buy the elections for the Republicans (nothing new there) and allege dirty tricks.

Republicans currently control the Wisconsin Senate by 17-13 but with six seats up for grabs they could easily lose their majority.

Trade unions in the United States, for so long on the back foot , are coming out fighting.

Attachments:

consult_condoc_non_domicile_individuals.pdf	[Treasury Consultation on non doms]	382 Kb
consult_condoc_statutory_residence.pdf	[Treasury consultation on statutory residence test]	373 Kb
libdem_manifesto_2010.pdf	[Lib Dem Manifesto 2010]	851 Kb