Who are the world’s worst fiscal hypocrites?
- Some people say the answer is the international bureaucrats at the OECD, IMF, and UN who push for higher taxes while receiving lavish tax-free salaries.
- Other people say the answer is politicians in the United States who push for higher taxes while following clever strategies to protect their own money.
Both of those choices are good, but we don’t want to overlook reprehensibly hypocritical politicians from other nations.
Consider Angela Rayner, the Deputy Prime Minster of the United Kingdom. She and her government love tax increases to finance ever-bigger government. Yet, as reported by Ben Ellery for the UK-based Times, she has been very aggressive about protecting her own money.
Angela Rayner’s constituency home was valued at the exact threshold for inheritance tax when part of it was placed in a trust using a wealth protection firm. Tax experts told The Times it was a “remarkable coincidence” that the property owned by the deputy prime minister and her former husband was valued at £650,000, the maximum amount allowed before the tax becomes payable. Rayner has been facing questions over whether she avoided £40,000 in stamp duty when buying her new flat in Hove, East Sussex…
Heather Powell, a partner at Blick Rothenberg specialising in property, said: “Valuing the property at £650,000 is a remarkable coincidence. …The questions over inheritance tax in relation to Rayner follow speculation that she had saved money on stamp duty and capital gains tax. Rayner bought a three-bed flat in a Victorian mansion block in Hove overlooking the sea for £800,000 in May. She said that she had disposed of her interest in her former family home in Ashton, before buying the flat on the south coast — a move thought to have saved her £40,000 in stamp duty. …
Questions were also raised last year about Rayner’s tax payments on a 2010 house sale. Rayner bought her Stockport council house in 2007 under right-to-buy. After marrying in 2010, she sold it for £48,500 profit but didn’t pay capital gains tax, stating she was unaware married couples typically only claim one main home for CGT.
Since the capital gains tax should not exist, part of me wants to cheer for Ms. Rayner. But I can’t cheer for people who want higher taxes on others while aggressively protecting their own money. Moreover, the BBC is reporting that she is admitting wrong-doing and will now surrender some of her money.
The housing secretary has admitted paying the wrong amount of tax on a house. That is pretty much the worst headline conceivable about any housing secretary, let alone Angela Rayner, who is also the deputy prime minister and spent years as Labour’s sleazehunter-in-chief. That’s the straightforward fact which makes this such a damaging, indeed career-threatening, episode for Rayner. …Rayner is adamant that she sought advice from a lawyer about the stamp duty liable, and has only now learnt from a different lawyer that that advice was wrong. It is on that basis that she is not resigning.
Since I’m not familiar with the details of capital gains taxation and stamp duty taxes in the UK, I have no opinion on the legal question of whether she crossed from legal tax avoidance to illegal tax evasion.
But I do know that the United Kingdom has become a tax hell for non-politicians, so there should be endless scorn when pro-tax politicians try to minimize their own taxes (legally or illegally).
P.S. Ms. Rayner is not the only Labour Party politician to get in trouble for hypocrisy.
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