Are the non-Domiciled Rich and the City Good for England?


Sean Gabb

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 168
19th February 2008

Are the non-Domiciled Rich and the City
Good for England?
by Sean Gabb

On my way out of the house this morning, I was called by a BBC researcher to discuss my opinion of non-domiciled tax status. As my opinions were not the ones expected, our conversation did not lead to any broadcast. But I was rather pleased with what I said, and I might as well spend the rest of my railway journey writing it down.

For my readers who live abroad, I should explain that resident foreigners in this country enjoy significant tax privileges. I, as a British citizen resident in the United Kingdom, pay tax on my income earned here and elsewhere in the world. A foreigner living here, who can persuade the authorities that his permanent residence is outside the United Kingdom, pays tax only on what income he earns in this country and on what income he brings in from abroad. Whatever he earns abroad and leaves abroad attracts no tax. That is why so many rich people have moved to London.

This privilege is now under attack. During the past eleven years, the British State has almost doubled in size. The Ministers have justified this by an endless chant of “investment in essential public services”. In truth—whether to a few white proles, or to Shopping Coordinators for Bearded Men with HIV, or to the various Tarquins and Jaspers who get the contracts to redesign logos and headed paper every time a Ministry name is changed—our tax money has gone on raising up an army of Labour voters. So far, most of us have not paid attention to the systematic looting required for this. Some of it was cleverly disguised. Much of it was enabled by an expansion of the world economy that brought in more revenue without increases in the rates of tax.

This may now change. If we go into recession, the amount of tax paid will fall at current rates. At the same time, there is no room left for imposing taxes that will not be noticed and felt. Therefore, if the payroll vote is to be kept on, let alone expanded, the Government must now openly increase taxes or inflate or both.

That is why the non-domiciled are to be hit with a poll tax of £30,000 per year. This will not put off the fiscal crisis. At £800 million, the sum projected is barely a fifth of one per cent of total government spending. Nor will it last very long. The non-domiciled are already threatening to leave. That means a farewell to Madonna and to Roman Abramovich. More importantly, it means a farewell to some of the most dynamic people in the City of London. To raise barely enough cash to run the National Health Service for a week, the Government is prepared to lose people who contribute billions in employment and indirect tax, and to damage a vast financial machine that generates more than a third of the national income.

But when a state is hungry, every little extra can look tasty. That it may not last beyond the next election is not something at all likely to worry our present set of politicians.

I think the lady from the BBC expected me to run out of breath as I denounced the scheme. She had me listed on her database as Director of the Libertarian Alliance, and took it for granted that I opposed taxes and supported the rich in general and the City of London in particular.

Well, I did denounce the taxes. They were bad, I said, because they stole the produce of a man’s labour: taxing is enslaving. They were bad, I added, because they enabled government spending that, even when not obviously wasteful or oppressive, tended to corrupt both direct and indirect recipients.

Her problem started when I moved to the rich and all those City people. Good riddance to the lot of them, I said. If it needed a tax to get them out of England, I might almost find something nice to say about taxes.

That was the end of our conversation. The BBC lady made her excuses and rang off. I imagine she then did a search in her database for Tory Boy Intellectual, and was soon hearing a lecture about London as “the Jewel in the Crown of the British Economy”.

I suppose I should explain myself. There are those who think libertarianism involves a defence of riches and of the rich. Some libertarians seem to agree. I do not. A libertarian is someone who wants to be left alone, and who wants to leave others alone, and who wants others to be left alone. People must be taken as the owners of their bodies and of what they create in or appropriate from the external world.

Given that all exchange and other association needs therefore to be voluntary, we move to an endorsement of what is called the free market. If some people do better in life in others, so much the better for them. If they contrive to pass on some part of their success to their children, so much the better again.

This is not, however, an endorsement of actually existing capitalism. A free society is not Tesco minus the State. It is a place of small craftsmen and farmers and traders, of artists and of unlicensed doctors and lawyers, and of others needed if individuals and free associations of individuals are to live well. We cannot say much more than this about the arrangements of a free society. But we can be sure it would have no place for big business as it now is found.

Big business corporatism, I would never seek to deny, is the best economic model humanity has known in over a century. It does generate vast amounts of wealth, and does ensure that much of this is distributed with some approximation of justice. Give me a choice between what we have and any of the state socialisms tried or recommended since Plato, and there is no doubt what I should choose. Nor is there any doubt, though, that the civilised nations made a big collective mistake around the middle of the 19th century. A system of scientific and industrial progress that might have grown into an unmixed blessing was partly hobbled and made into a new instrument of class domination by laws that allowed firms to incorporate and that gave shareholders limited liability for the debts of firms.

The result was a channelling of investment into firms that would never have been trusted had investors continued to face the risk of joint and several liability for debt. As these firms grew to enormous size, they monopolised or cartellised whole markets. They accepted and often quietly called for schemes of tax and regulation that harmed them, but harmed them less than their smaller competitors. In Britain and America, they demanded the underwriting by the State of their foreign expansions.

To ask whether big business bought or were colonised by the political class is irrelevant. All that matters is that we live in a world where political power and corporate wealth are possessed by different wings of the same ruling class. It is a ruling class that presides over whole nations of people transformed by brainwashing and mild but continuous discipline from human beings to human resources.

More than any other financial centre, the City of London stands as the heart and mind of the global corporate system. Every statistic the BBC lady was hoping I might drool on air—that there are more American banks in London than in New York, that German banks employ more people in London than in Frankfurt, that over a third of all currency conversions take place in London, and so on and so forth—is further condemnation for me.

Anyone who regards the City as identical with free market liberalism is deceived or trying to deceive. It is a place where markets clear, and where profit comes from working out returns in fractions of one per cent. It is one of the few places where reality and the textbook world of perfect competition nearly merge. It is, however, a place maintained in being by the scheme of state-granted privilege that is limited liability. At the very best, its activities are useful to protect us from high taxes. But in a world of free societies, there would be no City of London or anything like it.

A further evil of the City brings me back to the non-domiciled rich. Whatever their immunity from income tax, these are people who pay large amounts of indirect tax. They hand this over without much resistance or complaint, and they hand over large amounts. Political quietism plus great wealth is always dangerous to freedom. When the quiet rich are also foreigners, or at least highly mobile, is still worse. They will not protest at any use of their tax money to oppress other people than themselves. The moment their own freedom is infringed, they will retreat to somewhere more congenial.

For all the airs and graces they try to assume, this is what makes the non-domiciled rich different from the old landed aristocracy. Though tiresome in their defence of legal privilege and unearned wealth, these latter were incidentally useful in slowing the rise of big business corporatism. Like the rest of us, they had nowhere to run to, and were by training and inclination the natural leaders of resistance. Roman Abramovich and Madonna are none of these things. They live among us, but are in no sense with us. The same is true for the more anonymous bankers and fund managers who have for the past generation found this country useful as a trading platform. The same is true of the rich in general. Unlike the workers, who may have little else, the rich have no country.

Just about the only very rich foreigner possessed of any public spirit is Mohammed al-Fayed. He expresses that spirit in what may seem an eccentric cause. But he certainly cares something about this country. He is also domiciled here and is subject to the same taxes as the rest of us. Not surprisingly, he is hated and reviled by the establishment media, and has failed to obtain a British passport in an age when these are handed out to any parasite who can hold his place on the underside of a lorry.

In closing, Gordon Brown and his Ministers do not intend to do well by us. They are traitors to us in their external policies, and rapacious tyrants in all their internal dealings. But their desire for short term gain may set us on the path to a better world. And if they are not to be thanked for this, I am not inclined to join in the chorus of disapproval.

NB—Sean Gabb’s book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded free from http://tinyurl.com/34e2o3. You can help by contributing to publishing and distribution costs

Free Life Commentary No 168, 19th February 2008

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8 responses to “Are the non-Domiciled Rich and the City Good for England?

  1. Not my LA. I also knew Chris Tame and it wasn’t his either.

  2. I couldn’t agree more that libertarianism is not about protecting the rich. I also couldn’t agree more that a free market has more to do with little businesses than with large corporations. A lot of these rich people that are profiting from this tax privilege are a product of the state. However, I do not understand what that has to do with raising taxes. Taxes are wrong and injustice does not get better when more people are effected from it. You only get rid of these false rich by changing the structure of the state, or as I would prefer get completely rid of the state.
    The idea that you can get rid of them by taxing them more is deeply political. Here we have an unpleasant product of state regulations (the rich) and how can we get rid of them by imposing more regulations. Regulating the regulations cannot work and should not be a libertarian position. Like all regulations these new taxes will have unpleasant side effects.

  3. For me, I’m choosing freedom because it’s efficent and effective.

    I have no real other interest in it.

    If communism was better at creating wealth and increasing the choices available to the masses then I would choose it. It doesn’t and so I don’t.

    If your vision of freedom results in us being impovershied – having no road or rail networks or no shipping (since no navies) al la Carson – then I don’t want it.

    I want semicondutor fabs and walmart and BMW. You can have your spinning wheels.

  4. The problem arises because, I think, that in the present situation which we have, when “small businesses” become “big or “corporate businesses”, they kind of go up in the world: they, in they very hour of their success, then get to run up against nasty people in the State at dinners and suchlike, where women are underdressed [the said nasty people did PPE degrees and who have never worked but will happily order mass killings for an idea just like Pol Pot or Mao] who offer them the delights like those offered in The Temptation of Christ [see your copy of The Gospels for details, and for what Christ said in reply.]

    He effectively told The Devil to f*** off. You and I can’t do that, for we are not that resolute or incorruptible.

    The people then at the top of these organisations can no more resist these Temptations than fly through the air. I could not. You could not. It is not possible. It is like The Ring, in Tolkien.

    The State will have to be drained first. There is no other way out for Man. There will have to be found a way for clever people who can’t make things but who can talk glibly, to (a) NOT go to a universit and study “PPE”, and (b) if they do, for them to be incentivised, perhaps by the efforts of sexy “palestinian” [type] girls applied regularly for the purpose along with beer, to “learn a trade”.

    The “palestinian” girls will need to have pretty boobs, or the system won’t work. And we will, thus running out of “palestinian” girls earlier, need to up the ante on the “war on terror”, and offer $50,000 and a newer car (say a 4-year-old Vauxhall Astra with satnav) to Jihadists, but without the “girl”: instead of $20,000-plus-a-ten-y-o-Golf GTI-and-a-single-mum-from-Bootle.

    But even then, the “War on Terror” will only come in at $250-million-plus-the-cars, and we can “promote effectively” the Bootle-bints to somebody else less discerning. (After all, the guys we are targetting want 72 “virgins”. Each.)

  5. The question is “why is it in the interest of society to choose freedom?”

    In my view freedom is not an intrinsic good. It’s all about what freedom delivers: the number of amps, mercs, anti-biotics, farms, hip transplants, MRI scanners, computers and atom bombs or 1911’s I can hope to have in my lifetime.

    In short, I think that it’s more efficent and more effective to be free. That it, most of the goals held by most people will be most readily met in a Haykeian free society.

    A very small percentage of people will do dramatically less well (and may die) however the consequences of trying to avoid that will result in terrible mass death events in which about 10% or more of the population will die.

  6. I am afraid that davidncl is quite right in the last comment.

  7. Because, in answer to the question, it has nothing to do with society. What’ s that? – some individuals hanging around interacting with one another. Take away the group’s artificial props, be it a corporate or state or dinner club, and natural interaction will take place. Being the simplest and easiest it will probably be the most cost-effective?
    And deliciously free.

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