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Simon Black – Reporting from London…..admin

In Business, Business/Political Trends Worldwide, Political on October 5, 2010 at 8:23 pm

Sovereign Man
Notes from the Field

Date: October 5, 2010
Reporting From: London, England

In its ongoing contest to outdo other countries in the global crackdown against productive citizens, British tax authorities recently unveiled their latest series of measures designed to prove one thing without a doubt:

Big brother is coming.

I should pause for a moment to clarify some important definitions: tax evasion is the willful nonpayment or underpayment of taxes owed through illicit means… usually through things like underreporting of income or hiding funds offshore. Tax evasion is illegal, simple.

Tax avoidance, on the other hand, is the legitimate arrangement of one’s financial affairs to legally minimize tax liabilities within the structure of the law.

Most nations’ tax codes are so Byzantine that they cause people to engage in completely ludicrous and insane acts in order to lower their tax liability. For example, people will deliberately take losses or purchase unnecessary products in order to reduce their overall tax burden.

Needless to say, these sorts of things cause drastic misallocations of capital, which is never good for the aggregate wealth of a society.

Recently, however, the British government has begun blurring the distinction between tax avoidance and tax evasion. Evasion, they say, may be illegal, but avoidance is just as bad. In either case, you’re “stealing” from your neighbors…

Apparently the British government expects its subjects to simply open their wallets without hesitation and let the politicians decide when the bleeding should stop… nevermind that many in the government, including the Treasury Chief Secretary, use legal means to reduce their own personal tax burdens.

This is where the new policies come in.

In one proposal being considered by the UK tax authorities, British employers would no longer pay their workers. Instead, they would send full paychecks to the government and let the bureaucrats sort it all out.

Once the tax authorities deduct the amount of tax that they feel is sufficient, they would eventually pass on the net paychecks to the workers’ bank accounts.

If anyone should call to complain, the tax agency will implement voice recognition software to automatically detect if a caller sounds nervous, or if s/he may be trying to mislead tax inspectors.

On top of that, for anyone trying to take subsequent deductions later in the year, Her Majesty’s tax police have already committed to increasing the number of audits by 3,000%, and possibly hooking people up to lie detectors.

It’s uncertain what the final picture of this insanity is going to look like– which measures will be dropped due to voter backlash, which will be publicly implemented, and which will be surreptitiously implemented. The proposals and rhetoric, however, certainly indicate what the politicians are thinking:

People who are productive will be continually squeezed until they are no longer productive; this means that if you are just a little bit better off than your neighbors, the politicians won’t rest until you are suffering equally. Naturally, though, they won’t be suffering themselves.

This line of reasoning will have disastrous effects on a society. Not only does it prevent the most productive people from creating value, building wealth, and providing new jobs, but it gives those who are already suffering very little incentive to pull themselves out of the hole.

It’s unfortunate when nations which were once the pinnacle of innovation and prosperity resort to such baneful and self-destructive tactics. These policies should serve as yet another reminder of what awaits, and underscore a clear point:

Nothing is permanent. A country on top will not remain on top forever. This applies to the west today, and will apply to Asia in the future.

Right now, the developed western world is in a substantial period of decline. It will likely remain there for decades to come. Other countries such as Brazil, Indonesia, Mozambique, and Panama will continue to experience a surge in economic output and standard of living.

We are fortunate to be living during a time in which we can witness this transition, as well as be able to capitalize on it… if we’re willing to take action.

Being born in a particular country should not enslave a person to go down with a sinking ship; we’re all human beings, and the entire world is our home. National borders are simply invisible lines on a map, and perhaps an inconvenient bureaucracy.

I’m not suggesting that you get out of dodge tomorrow… but if you look around where you live and see things getting worse, it is probably time to start considering unique options overseas. I think your wallet and your soul will thank you for it later.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

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