Sebrof Posted September 21, 2008 Share Posted September 21, 2008 Income tax was capped at £100,000 a couple of years ago. Has anybody seen any statistics on whether tax revenues have risen or fallen as a result, and whether the measure has been successful at luring the super-rich to the island? S Link to comment Share on other sites More sharing options...
mojomonkey Posted September 21, 2008 Share Posted September 21, 2008 Can't speak for the super rich but the £100k cap hasn't made an difference to me! Link to comment Share on other sites More sharing options...
Sebrof Posted September 21, 2008 Author Share Posted September 21, 2008 Can't speak for the super rich but the £100k cap hasn't made an difference to me! Are you sure? It might be that tax revenues have fallen as a result of this measure, in which case either your taxes will have to rise in future, or services will have to be cut. S Link to comment Share on other sites More sharing options...
triskelion Posted September 21, 2008 Share Posted September 21, 2008 Rather than attempting to spread sensationalist conjecture, why don't you go and examine the little pink books for yourself? Link to comment Share on other sites More sharing options...
jimbms Posted September 21, 2008 Share Posted September 21, 2008 Can't speak for the super rich but the £100k cap hasn't made an difference to me! Are you sure? It might be that tax revenues have fallen as a result of this measure, in which case either your taxes will have to rise in future, or services will have to be cut. S I would say quite the opposite may occur by encouraging those who would have to pay that amount to come here rather than pay higher taxe else where i.e. it's better to have 100 people paying £100k than 30 people paying £200k Link to comment Share on other sites More sharing options...
rednik Posted September 21, 2008 Share Posted September 21, 2008 Can't speak for the super rich but the £100k cap hasn't made an difference to me! Are you sure? It might be that tax revenues have fallen as a result of this measure, in which case either your taxes will have to rise in future, or services will have to be cut. S I would say quite the opposite may occur by encouraging those who would have to pay that amount to come here rather than pay higher taxe else where i.e. it's better to have 100 people paying £100k than 30 people paying £200k I don't know how many have moved here as a result, but I definately know of a few. Bear in mind all the VAT they pay as well. These people generate a lot more government income than just the £100k Link to comment Share on other sites More sharing options...
WTF Posted September 21, 2008 Share Posted September 21, 2008 100k cap on tax is ok. is there a cap on the associated national insurance payments too?? Link to comment Share on other sites More sharing options...
La_Dolce_Vita Posted September 21, 2008 Share Posted September 21, 2008 Am I right in thinking then that if you earn more than 100k you don't pay income tax? Or is it just that you don't pay more £100,000 in a year? Link to comment Share on other sites More sharing options...
mojomonkey Posted September 21, 2008 Share Posted September 21, 2008 The effect it has for me is to make it even more clear that income tax is not a social responsibility that everyone must meet. I say that on the assumption that this cap is a cap on the super-rich being told that they don't have to contribute t paying for government. If the rich few can escape from the 'social responsibilities' that the rest are told to meet and everyone thinks this is ok, then I hope we have a more understanding attitude to those amongst us who are also tax dodgers, benefit fraudsters, and thieves who may steal from such people. If some people don't have to pay for government, why should you! I don't agree with the tax cap and agree with most of what you say but I think the idea is more along the lines that after paying tax up to £100k they consider that you've contributed enough to society. I think the idea of attracting the mega rich is something to do with VAT returns but I could be wrong as I'm not that finance savvy. Link to comment Share on other sites More sharing options...
La_Dolce_Vita Posted September 21, 2008 Share Posted September 21, 2008 The effect it has for me is to make it even more clear that income tax is not a social responsibility that everyone must meet. I say that on the assumption that this cap is a cap on the super-rich being told that they don't have to contribute t paying for government. If the rich few can escape from the 'social responsibilities' that the rest are told to meet and everyone thinks this is ok, then I hope we have a more understanding attitude to those amongst us who are also tax dodgers, benefit fraudsters, and thieves who may steal from such people. If some people don't have to pay for government, why should you! I don't agree with the tax cap and agree with most of what you say but I think the idea is more along the lines that after paying tax up to £100k they consider that you've contributed enough to society. I think the idea of attracting the mega rich is something to do with VAT returns but I could be wrong as I'm not that finance savvy. Sorry to confused anyone who didn't see my original post. I posted and then edited as I wasn't sure what was meant by the 100k tax cap. But if it is a cap on income tax for people who earn more than 100k then that is my stance on it. Though I wonder what sort of ridiculous salary someone would be earning to have to pay more than 100k? That is a huge amount to pay. Link to comment Share on other sites More sharing options...
WTF Posted September 21, 2008 Share Posted September 21, 2008 The effect it has for me is to make it even more clear that income tax is not a social responsibility that everyone must meet. I say that on the assumption that this cap is a cap on the super-rich being told that they don't have to contribute t paying for government. If the rich few can escape from the 'social responsibilities' that the rest are told to meet and everyone thinks this is ok, then I hope we have a more understanding attitude to those amongst us who are also tax dodgers, benefit fraudsters, and thieves who may steal from such people. If some people don't have to pay for government, why should you! I don't agree with the tax cap and agree with most of what you say but I think the idea is more along the lines that after paying tax up to £100k they consider that you've contributed enough to society. I think the idea of attracting the mega rich is something to do with VAT returns but I could be wrong as I'm not that finance savvy. Sorry to confused anyone who didn't see my original post. I posted and then edited as I wasn't sure what was meant by the 100k tax cap. But if it is a cap on income tax for people who earn more than 100k then that is my stance on it. Though I wonder what sort of ridiculous salary someone would be earning to have to pay more than 100k? That is a huge amount to pay. at a guess i reckon you would need to be earning around or over 750K a year to incur that much tax. but in then grand scheme of the really wealthy depending on how good an interest rate you had on your wealth, anything above 15 - 20 million you wouldn't be paying tax on the interest. so if you had 60 million say, you are only charged tax on the interst on the first 20 million, the next 40 millions interest is tax free. Link to comment Share on other sites More sharing options...
Sebrof Posted September 21, 2008 Author Share Posted September 21, 2008 Rather than attempting to spread sensationalist conjecture, why don't you go and examine the little pink books for yourself? Do kindly read my post and explain what was conjecture and what was sensationalist. And then kindly tell me where in the little pink books it refers to the success or otherwise of the measure. Having read the LPBs before posting, I was unable to find anything in this year's and only the following in last year's: "People have moved to the Isle of Man as a result of the tax cap". Is that one man and his wife; twenty people, or what? And did the extra revenue outweigh the lost revenue from existing high earners who enjoyed a tax cut as a result of the cap? These questions might have been answered elsewhere, hence my query. I asked out of interest. I have no axe to grind, and would be delighted to learn that the measure was successful. But thank you for your helpful and constructive contribution. S Link to comment Share on other sites More sharing options...
Twitch Posted September 21, 2008 Share Posted September 21, 2008 From memory, I believe the cap applied to 69 residents during the first year. No evidence to back this up but I'm sure I heard it on Manx Radio. On how effective it is...when moving house the estate agent told me that he was getting 2 enquiries a day from "High Net Worth Individuals" looking to move here for tax reasons. What this might mean for future tax income for IOM, who knows? Link to comment Share on other sites More sharing options...
Sebrof Posted September 21, 2008 Author Share Posted September 21, 2008 The effect it has for me is to make it even more clear that income tax is not a social responsibility that everyone must meet. I say that on the assumption that this cap is a cap on the super-rich being told that they don't have to contribute t paying for government. If the rich few can escape from the 'social responsibilities' that the rest are told to meet and everyone thinks this is ok, then I hope we have a more understanding attitude to those amongst us who are also tax dodgers, benefit fraudsters, and thieves who may steal from such people. If some people don't have to pay for government, why should you! I don't agree with the tax cap and agree with most of what you say but I think the idea is more along the lines that after paying tax up to £100k they consider that you've contributed enough to society. I think the idea of attracting the mega rich is something to do with VAT returns but I could be wrong as I'm not that finance savvy. Sorry to confused anyone who didn't see my original post. I posted and then edited as I wasn't sure what was meant by the 100k tax cap. But if it is a cap on income tax for people who earn more than 100k then that is my stance on it. Though I wonder what sort of ridiculous salary someone would be earning to have to pay more than 100k? That is a huge amount to pay. at a guess i reckon you would need to be earning around or over 750K a year to incur that much tax. but in then grand scheme of the really wealthy depending on how good an interest rate you had on your wealth, anything above 15 - 20 million you wouldn't be paying tax on the interest. so if you had 60 million say, you are only charged tax on the interst on the first 20 million, the next 40 millions interest is tax free. Quite right. The tax cap was a very interesting and bold move. Say we have twenty residents with an annual income of £2.5 million each, or £50 million in total. Tax at 22% would yield £10.1 million. But after the cap it would only yield £2 million, leaving a shortfall of £8.1 million. So we'd need quite a few new residents to make up the difference. Obviously the VAT would help, but people who earn £2.5 milion a year don't usually spend it all, and quite a lot of their expenditure (wages, houses, etc) doesn't attract VAT. It would be interesting to see the real figures. S Link to comment Share on other sites More sharing options...
Billy One Mate Posted September 22, 2008 Share Posted September 22, 2008 As I have been involved in doing some work on this over the past few months the following may help those of you who dont appear to have grasped this tax scenario. This 100K tax cap is in relation to the ammount of tax paid and not your income ie maximum tax to be paid by an IOM Resident is 100k. Tax is not just paid on your yearly earnings but your income from all sources such as interest and investments, so you dont need just to be earning as a salary 750K per year as a salary to hit the max tax cap. Dont underestimate the benefit to a high net worth individual of moving here. For example in a recent player transfer to Manchester City it was estimated that Robinios wages would reduce from 6 million to 4 million due to tax. The benefit to the Isle of Man is massive and the 100K that our economy gets is peanuts in the scope of things. VAT is the big area we benefit from and that has nothing to do with what they spend when they are here but the new arrangement with the UK Government on our VAT reciepts which is now based on our GDP. Therefore a high wealth individual who is worth say 20 million will produce approx 1 million in additional VAT reciepts. On paper this 100K tax initiative could be a little gold mine for the Islands Economy but as per usual there is a serious problem in that these individuals who want to move here cant find suitable properties to buy and our Planning Department do not see the granting of planning permission for large mansions as being in the National Interest. So unless we get some joined up Government this 100K tax initative will fail. Link to comment Share on other sites More sharing options...
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