For example I want a computer. If I pay for the computer as a private citizen, I have to pay income tax, social security on the money before I can spend it and then I have to pay VAT on the item.
Hamilton got too greedy here [1] and the setup wasn't the best, but you get the idea:
"Hamilton set up another Isle of Man company to purchase a €1.7m motorhome that he uses at racetracks. [..] He is contracted to Mercedes, with whom he secured his fourth world championship last month, via a Guernsey company."
See Hamilton doesn't get the money from Mercedes, his "Guernsey company" does. He doesn't own the motorhome, he owns the company that owns the motorhome. No VAT payed, no income tax payed. And the company he owns might be through several shell companies so no IRS knows what he owns. And when it knows, the company only makes losses (see Trump setup), so no taxes payed on owning the company either.
[1] https://www.theguardian.com/news/2017/nov/06/lewis-hamilton-...
Why HMRC does not do the same with companies using fake charges to hide profits? Those companies got huge competitive advantage over local small companies who cannot afford such creative accounting. So many businesses didn't happen because of that.
I think it's time HMRC doubled down and destroyed this gravy train.
I am sure we have clever people that would build a new Facebook, that is ethical and pays taxes.
https://www.loeb.com/en/insights/publications/2021/02/new-tr...
The only protection I would count on is if you were high up politically, like Putin or a Saudi prince.
It will then take slightly over 229 years until the multiplier has shrunk from 10,000 to 1,000.
After another 229 years the multiplier will have shrunk another order of magnitude, from 1,000 to 100. And it makes sense mathematically that if it shrinks an order of magnitude in the first 229 years then it will shrink another order of magnitude in the next 229 years.
https://www.wolframalpha.com/input/?i=y+%3D+10000+*+0.99%5Ex...
As a layperson this seems reasonable I think. But I also think there is no "right" or "wrong" in this case, and it will boil down to personal views.
I see bigger problems with evasion and valuation. Evasion can be solved by coupling the wealth tax with enforcement of property rights. You own an offshore bank account, somebody steals from that offshore bank account, you show up in court to prosecute them, and the government says "I'm sorry, we don't have any record of your ownership of this bank account, and you have never paid taxes on it." Oops. Also makes logical sense, as the function of the state is to enforce property rights.
Valuation is tricky, as a lot of wealth-producing assets are illiquid and it's hard to pin a specific value on them in the absence of a specific transaction. The way LVTs handle this is through statistics: you know what comparable land sells, you know what improvements are on it, you can run a regression against all the features that impact valuation and subtract them out to get a reasonable estimate of the value of the land itself. Something similar could work for income-producing assets: you know all the cash flows from the asset (because you've been declaring your income, right?), you can do a discounted cash flow analysis that smooths them out and arrives at an estimate of the NPV of the asset under current cash flow & interest rate conditions.
Although one idea I was playing around with in my mind was around whether the tax could be made payable in public stock, provided that the voting rights are still assigned to the holder for a guaranteed minimum window (5 years?) that could extend pretty much indefinitely until the government chooses to close a position, e.g to pay for things.
I have no idea how good or bad an idea it is, but it's an idea.
E.g. what is this IP charge by Cayman company that belongs to you as well? NON DEDUCTIBLE.