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Explore the Swiss Leaks Data

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Re: Explore the Swiss Leaks Data

#91
post #45
post #31

Earlier quoted context omitted.

The problem is that there's nothing illegal about putting your money in secret swiss bank accounts per se. It first becomes tax evasion (in the UK anyway; details may vary) the moment you fail to report income or capital gains that are taxable, since the UK does not tax wealth.

Yeah, but you don't accidentally both place your money in secret Swiss bank accounts and fail to report it. You may want a secret account for privacy and you may forget to report all your money. Doing both at once, however, is highly unlikely. There's an end to plausible deniability and beyond that end should lie prison time.

It may be unlikely, but not so unlikely that I think you'd manage to convince many to put someone in prison for it without additional evidence.

Expect lengthy trials with all kinds of details showing up that creates sufficient doubt to make it hard to justify a prison sentence.

For starters, unless HMRC can prove that you have received the money in a way that should be taxed in the UK, they have no reason to expect you to report the money, and so most people don't.

E.g. for my part I'm Norwegian, but have been ordinarily resident in the UK for the last 13 years or so. The first year I lived here, I was not ordinarily resident for tax purposes, and maintained accounts in Norway that HMRC had no expectation of knowing anything about, and no legal basis for me to report.

But if I had had a large enough fortune and income, it'd have been trivial for me to maintain a status as not ordinarily resident much longer, and legally avoid reporting any income due from work done outside the UK at that point. The same is possible for UK citizens who move out of the UK to work for some time. For me there was no point, since all my income came from the UK, and so I brought my money into the UK once I'd tidied up my Norwegian affairs.

If you wish to defraud the HMRC, then, and create plausible deniability, you move out of the UK, or at least spend enough time outside the UK for a few years to be able to claim that when you receive that X million payment from WeAreTaxEvaders Ltd. in the Cayman Islands, directly to your secret account in Switzerland, it is income due to you entirely from work done outside the UK in a period where you were not resident in the UK for income tax purposes. Then you move back, and conveniently don't tell the HMRC because, you will claim, it has nothing at all to do with them (of course it is not at all because you don't want to risk that they take a closer look at the paper trails related to WeAreTaxEvaders Ltd. and maybe find traces of payments from the UK etc., or a timeline that doesn't match when you were abroad), and you way have had legitimate reasons to want to e.g. invest in Swiss shares or whatever at a later date when you retire to a cabin in the Swiss alps. Or whatever. If you are telling the truth about this, it is none of the HMRC's business that the money is sitting there unreported.

This is the problem with going after these schemes: There are any number of completely legal - for good reason, often, - mechanisms that allow the unscrupulous to create sufficient plausible deniability that actually proving a case becomes incredibly hard. It's easy to sit and assume that of course these are tax evaders. Except some non-trivial percentage of them are not.

HMRC risks not only not getting the actual tax evaders imprisoned, but not getting their hands on the money either, if they go to court on insufficient evidence. Going after just the money is a lot easier since people are often willing to pay to make the threat of further investigation go away even if they see the risk of prison as remote.

Re: Explore the Swiss Leaks Data

#93

The pattern is apparent - once you become rich, you don't want to donate millions to governments in taxes. Anyway you do, but trying to minimize it. Be it for their lack of any transparency how cash will be used (mostly wasted in very ineffective way). It doesn't matter if it's famous or unknown rich. Now what to do with this situation... There are too many tax havens out there (Suisse, Monaco, Channel islands, Luxem…

The problem is one i can sympathise with to some degree. For standard wage levels taxation (whilst still to much in UK) makes sense. Scale that up to millions and it really is out of wack. There is no moral reason why a government deserves 50% of everything you have made. Its like when you order a more expensive bottle of wine, and the restaurant's service charge is a percentage of it... its ridiculous to charge $100…

> There is no moral reason why a government deserves 50% of everything you have made.

Why? Personally I think the marginal tax rate should be much higher on the highest earners, for the simple reason that the impact of exact additional percentage point tax is far lower for a higher earner. To me the actual percentage is irrelevant. The relative impact is far more important.

If I had to pay 1 percentage points more tax, I wouldn't notice. I spend more than that on comics and takeaways, and also set aside 15-20 times more than that in savings and investments.

If I had to pay 5 percentage points it would begin to sting a bit, but I could still easily afford it. 10 percentage points more would start to be painful but still doable.

In fact, while I'd be complaining and whining about it at that point, I could manage 50% tax quite easily (I actually pay about 32% combined income tax and national insurance, despite being far into the 40% income tax threshold, and earning enough to be in the top 10% UK earners or so)

Meanwhile I have neighbours that would have to cut down on their food budget if their tax rate went up 1%, despite paying at least 10 percentage points less than I do, and many people in the UK would struggle to keep modest accommodation and food if they paid more than 20%.

I don't find it at all unfair that I pay more than them, not least because the only reason I can make what I do is that there is a functioning society around me that can afford my services.

Re: Explore the Swiss Leaks Data

#96

Earlier quoted context omitted.

Yes, but this is not easy. I heard (don't recall where) that a while back someone proposed a new tax in Sweden: "tax on work that was avoided with the intention of avoiding tax". I.e. a doctor was working 40 hours a week and was paying >50 % of income as taxes, and decided that it's not worth it to work so hard if government takes most of the proceeds, so reduced working time to 35 hours a week. The proposal was to t…

Indeed. Those kinds of situations showcase the problems of taxation that is too high, not the other way around. It gets quite ridiculous sometimes, especially since 2008. Governments are looking for cash everywhere, and they don't mind challenging whatever comes their way. It doesn't cost them anything to challenge arrangements, so why not try? At worst, they lose and they will have lost some time. Civil servants are…

Quite. That case sounds frivolous, considering that we're talking about two EU countries, and the whole point of EU is that people (labour) and money (capital) can move from member country to other, without duties. But it does not surprise me that when a government starts a frivolous case, they incur frivolous expenses on others, and will not compensate. Belgium appears to be at the top end of world when it comes to tax revenue as % of GDP (after Denmark and Zimbabwe, of all places), and it is no wonder the system starts creaking at joints.

Re: Explore the Swiss Leaks Data

#97
post #58

Earlier quoted context omitted.

Paying taxes is not "donating money". You are required by law to pay them. You get certain things in exchange, like laws that protect your property. If you think that you shouldn't be forced to pay taxes, why do you think that other laws should be enforced? If rich people steal from the state, why shouldn't poor people just take what they want from the rich? If you avoid taxes, you are stealing from everybody.

> You get certain things in exchange, like laws that protect your property. With the important difference that the price is non-negotiable, and set by the service provider alone. The people highlighted on the website chose to park their property elsewhere, so the government had zero cost in protecting that. The price is not in proportion to the quality of service at all, it's proportional to the income of the citizen…

You don't pay taxes for specific services. You pay taxes because it is the law. The money you have to pay for taxes is not your property. It belongs to the state. If you illegally transfer untaxed money out of the country, you aren't "parking your property elsewhere", you are stealing public money.

If you don't want to pay taxes in a country, then don't do business in a country.

Re: Explore the Swiss Leaks Data

#98

Earlier quoted context omitted.

Indeed. Those kinds of situations showcase the problems of taxation that is too high, not the other way around. It gets quite ridiculous sometimes, especially since 2008. Governments are looking for cash everywhere, and they don't mind challenging whatever comes their way. It doesn't cost them anything to challenge arrangements, so why not try? At worst, they lose and they will have lost some time. Civil servants are…

Quite. That case sounds frivolous, considering that we're talking about two EU countries, and the whole point of EU is that people (labour) and money (capital) can move from member country to other, without duties. But it does not surprise me that when a government starts a frivolous case, they incur frivolous expenses on others, and will not compensate. Belgium appears to be at the top end of world when it comes to…

In a way, they always win if we’re talking relatively small amounts (If you have to pay €10-20k for a decent lawyer to deal with a case, that tax lawyer in turn will be taxed on that income at income tax/corporate tax rates (+ VAT tends to be charged as well).

It's a pretty decent strategy for a government, but not one I would appreciate if someone were to use it in a business setting.

Re: Explore the Swiss Leaks Data

#99

A flat taxation system (with say the starting point for tax at £25,000) seems like a good plan? I also think taxes on business and taxes on individuals should also be harmonised. Add in a general tax avoidance rule and you are good to go.

That means shareholders will be taxed twice, once at the corporate level, and once at the individual level, leading to double taxation (unless a tax credit is given). But, like you, I'm a big fan of a simple flat tax, with relatively little deductions.

As long as the flat tax applies to profit rather than revenue (for both individuals and companies), that wouldn't lead to double taxation. Salaries are an expense.
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