Politics of envy stinks – it is time to reward entrepreneurs
Here in the UK, we all listened to the budget with vague interest to see if Chancellor of the Exchequer Alastair Darling would do anything to reassure us , the general public, that he had got a grip on what needed to be done to rescue our economy and create some jobs.
Deep down we already knew nothing remarkable was likely to happen, but with an election looming, could something astonishingly bold be announced to get everyone buzzing with anticipation?
What did we get? Just more of the same – more “fudge” with little to alienate or encourage us one way or the other.
The big announcement – stamp duty freeze for first time buyers – well that is going to help the economy massively isn’t it? Yeah – right!!
So 50% tax here we come for any tax payers fortunate enough to have taxable income more than £150,000, which of course is unlikely to happen, as those earning that sort of money will take advice to keep paying tax at a maximum of 40% or less.
Great for my accountancy firm, OBC The Accountants – we will get an increased stream of clients from people not wanting to pay 50%, even from those who are unlikely to ever be anywhere near that earnings figure. That is the polarising effect of meaningless increases like this!
But for the country and economy as a whole – very little impact – it is purely a political statement to appease those who are not able or prepared to take the risks necessary to earn more than £150k p.a.
What we needed was incentives to persuade entrepreneurs to “come out of the woodwork”, to set up new businesses, or to expand their businesses, and create wealth and new jobs in our delicately fragile economy.
What we really needed was a reduction in main line tax rates to encourage entrepreneurs to focus on creating wealth instead of avoiding tax. Most entrepreneurs will be happy to pay tax at 20%, but once you get to 40% or more, this is considered too much of their income to give away by many.
We need to find a way of making government realistic about the future – to stop this “envy thinking” looking to tax success, and instead we should foster, encourage and reward successful and profitable businesses – they are the ones who will not need the support of the state in the future, and who will provide the much needed stimulus to improve our economy.
We need encouragement to invest in innovative thinking and technology to improve efficiency and effectiveness.
We are not going to get that with the current government – and I am not making a political statement here as such – the reality is it will be businesses not government that will turn our economy around, and they are getting no support and encouragement when faced with increased taxes, increased national insurance, let alone increased business rates that are penalising manufacturing businesses.
So until we do get a change of attitude from those governing the country, we have to return to the old ways of thinking and planning – how to reduce our greatly increasing tax burden – and there are plenty of ways, all perfectly legitimate.
All you need to do is contact me and ask for my firm’s detailed tax reduction tips – just email me at firstname.lastname@example.org and put in the subject line “Tell me how to avoid paying tax needlessly”