A Psychological Consideration

The treasury states that tinkering with the tax structure has not in the past and will not in he future create an exodus of entrepreneurs and that the Non-Dom issue did not have a great affect on this market. The repercussions of the Non-Dom changes may only just be beginning to be felt, as it is a recent decision to instigate this charge. It is not always possible for business people to up sticks and move  at a moments notice, the result is usually on a drip drip basis. It is also the combination of what has been instigated now and the perception of what will be instigated in the future. Britain is a country with a national borrowing level heading toward the total GDP figure. It is a country with a trillion plus private debt. It is becoming obvious that the revenues will over the next few years not keep pace with borrowing , leading to more quantitative easing. Right at this moment the borrowing levels may be lower than certain other countries especially Japan; however Japan has a more solid manufacturing base than the UK. It is not the 50% tax on its own that gives rise to concern, it is how many more tax rises will follow and there is little doubt that they will. With a contracting economy and eventually revenues not matching borrowing and a tax structure that is earning less and less tax and finding it harder and harder to service the loan commitments tax can go only one way up whether under Labour or the Conservatives. Some will say that a recovery will correct all this gloom; however there is now little doubt that the tax collection programme linked to the repayment programme will be in force for  decades  and what if there is  even a minor economic set back during that prolonged period. There will be more raids on the vulnerable pension industry and suggestions that there are better products for retirement planning will spew forth. Where will this strategy lead the job market within the pensions industry let alone the pensioners. The UK already has one of the lowest pension structures in the developed world this will only get worse as even the state sector paid for by tax payers who actually earn money from real productivity can no longer support the non-productive public sector.The short sightedness of this government is beyond belief as they push out the entrepreneurs, middle classes and move the aging population closer to poverty in order to fill short term gaps prior to a general election. As tax revenues fall there will not be any money in the pot for infrastructure . A  country with clogged roads and a deteriorating rail network will not be able to efficiently move goods or business people leading to more falls in productivity and lower tax returns.