DEBATE: Should billionaires consider fleeing the country if Jeremy Corbyn gets into power?
Should billionaires consider fleeing the country if Jeremy Corbyn gets into power?
Craig Kemsley, head of tax at Calibrate Law, says YES.
An exodus of wealth creators from the UK is already well under way, and Labour’s tax plans would only catalyse this phenomenon if the party got into office.
Despite Labour’s claims that the rich have had endless tax breaks, never have Britain’s public finances been so reliant on such a small group of taxpayers. The rise in anti-wealth sentiment combined with Brexit uncertainty and the new tax incentives being actively promoted by our EU partners to attract foreign investors are having a negative effect on the tax base.
Our analysis shows that it has never been simpler to relocate. Since 2017, 10,000 additional rate income taxpayers have left the country for good. Of course these individuals would be tempted to leave if the situation got worse.
There are only 393,000 such taxpayers in the country, but they provide £56bn or around one third of the total income tax take. If the leak turns into a flood, the losers will be the rest of the UK taxpayers, who will have to pick up more of the bill for all the spending promises.
Alfie Stirling, head of economics at the New Economics Foundation, says NO.
Every single billionaire is a further example of our broken economy. But they should be encouraged to stay in Britain — and contribute their fair share.
This debate doesn’t need to be about left and right politics. Even long-established, traditional economics is clear on this: someone should only become a billionaire if they are worth that value to the economy and society.
Statistically, it is unlikely, to the point of being practically impossible, that any one individual could ever truly contribute this amount of value on their own. When someone does accumulate this much wealth, it is invariably the consequence of excessive economic rents, market exploitation, or inheritance — and sometimes all three.
A number of parties are hoping to address this injustice. But billionaires have no reason to leave. A more equal, healthier, better educated, higher investment, higher productivity economy is a good place for businesses and entrepreneurs to operate.
Indeed, these things are far more important to sensible businesses planning for the long term than small changes in the headline tax rate — which they are asked to contribute alongside the rest of society.
Main image credit: Getty