It is worth noting that, all yesterday, the BBC referred to these Panamanian companies as operated by “the rich and powerful” as if to suggest that if one is rich and powerful one operates a Panamanian company. Channel 4 News followed up on the same basis in the evening. It is hard to escape the conclusion that these news-issuing organisations are left wing. Truth is certainly not their objective.
Mind you, their attempts at issuing the truth are hampered by their inability to understand the law obtaining. Certainly, the financial journalists at The Guardian are hopeless. Try as these propagandists may to distinguish between taxation avoidance and evasion, at least fifty per cent of readers and listeners fail to understand. This is democracy in action.
Fifty or so years ago a death wish had settled upon the British economy (both of the main parties espoused the cancer). The top rate of taxation for earned income got up to 83% with an extraordinary 98% for investment income. The result was that any able young man got out to the United States or anywhere else abroad you care to name. However, a still small voice of calm prevailed at HM Treasury and, as a result, offshore tax havens came alive with Britons prominently using them.
Events have moved on. Politicians are less overtly stupid and it is therefore possible to expect a top rate of tax of 40% or so. The result is that commercially successful taxpayers can develop businesses with little fear of seeing their efforts vitiated. This calls into question the social advantage of the offshore avoidance routes. And, as anyone who has studied the subject will remark, Britons have many fewer offshore avoidance routes now available to them. The law has tightened up around them.
However, offshore tax havens are essential for the many visitors to the UK who may stay for a few years or, quite possibly, settle down here. To deter such adopters of British culture is plainly silly. I hope HM Treasury will have sufficient power to maintain this sense of proportion. This is an opportunity for Britons to be kind to their own economy.
Ocado (OCDO) is up again at 331p this morning. I cannot believe it. Keep selling.
Ditto Tesla (NASDAQ:TSLA). This closed at $247 last night as a result of the developing order book for the Model 3. These cars will not be delivered for at least eighteen months. Another clear shorting opportunity.