A New York billionairess was once reported to have said, to her eternal shame: “Only the little people pay taxes”. It is an attitude of mind that nicely demonstrates how, under even high-tax regimes, some people, if they have the right lawyers, smart tax planners and political connections, try or even succeed in avoiding paying as much revenue as possible, leaving those on lower incomes to pick up the tab.
Of course, the ideal solution to problems of tax avoidance by the rich is to cut taxes, drastically, across the board. And with all the current complaints about the British taxman’s crackdown on “non-domiciled” residents in the UK, it would be refreshing if those champions of capitalism like Lord (Digby) Jones, or William Rees-Mogg and the rest could acknowledge this point. I don’t mind non-doms being able to pay little tax; I hear all the arguments for why it is sensible to encourage them to live and invest in Britain. But would it not be nice if, say, the Tories could focus on what is a genuine problem: resentment by the increasingly taxed middle class of what is seen, however, mistakenly, as favourable tax treatment to very wealthy people? The solution, of course, is not to hit non-doms, but to cut taxes sharply, simplify them, and put the brakes on public spending, and then hit the reverse gear-shift.