Re: Backed money/Mike Sproul

[GGard97342@xxxxxx]

In a message dated 07/04/2000 00:41:40 GMT Daylight Time,
BergP867@xxxxxxxxxxxxx writes:

> Britain's notoriously uneven income
>  distribution by European standards may be mitigated to some extent by
>  the relatively cheap food in that country. Sweden's income distribution
>  is known as equitable, but food and rent are expensive.

I am a bit surprised. I thought that one fifth of all Swedish private
industry was owned by five families. Have the Wallenbergs liquidated
themselves? My own dealings with Swedes years ago led me to believe they were
masters of every tax ploy there was.

Britain was supposed to have the greatest inequality of wealth ever known in
the history of the world in the Edwardian era, though I do not know who did
the calculations. By 1979 as regards differences in net income the opposite
was true. Certainly since 1984 the gap has widened again with the ending of
the horrendous  top tax rates.

I wonder how true the current comparisons are? The British tax system is so
much more effective than any other (not necessarily a good thing for the
economy). The continental practice of bearer certificates for investments
leaves a vast loophole for tax evasion.  They were banned in Britain for
about 40 years, initially under the 1939 Defence Regulations. The current
dispute between Britain and Germany over the proposed withholding tax is due
to the fact that the Germans have almost totally lost control over tax
evasion (Steffi Graf!), whereas the British tax authorities are quite
sanguine over the problem. They may be oversanguine, because undoubtedly
"Rule 19", has in the past been the real secret of British success in getting
in taxes. ( The rule makes the payer of income liable for the tax, not the
payee.)

I write with some considerable personal experience of the international tax
scene, and had colleagues with even more. I also have a son who is an
international tax expert. British ethical standards are much lower than they
used to be, but there are still remants of the former puritanism which never
seems to have thrived to the same extent either in Europe or the US. It is a
reason why so many Brits are still very reluctant to merge with Europe. The
difference probably has something to do with the fact that Britain has not
been invaded for a 1000 years. To be ruled by a conqueror destroys the
ethical impetus of a society, and it is difficult to recover it once it has
gone. But slowly alien immigration may be doing the same for Britain as
invasion has done for others so we shall have to get used to the loss of our
moral arrogance.

It is a very intersting subject, but I warn any potential researchers that
they need loads of difficult technical knowledge and some inside information
about tax havens to do a proper job. As one indication of the size of the
problem the Isle of Man raises £130 million in income tax every year from a
community with a GNP just over £600 million. As its top rate of tax is 20%,
and it gives very generous allowances, it is obviously levying tax on a sum
which is perhaps twice GNP. The source is tax exiles. With a population of
71,000 it has bank eposits of £20 billion.

The total of foreign owned foreign currency deposits in the banks of the
world totals $9 trillion.

Geoffrey Gardiner