That's rich...

The tax-free lifestyle of Britain's new mega-wealthy is impoverishing us all


Stewart Lansley
Saturday April 1, 2006
The Guardian

"...The City in effect operates as a giant, informal cartel, charging excessive fees for activity that, for the most part, involves the transfer (or sometimes destruction) of wealth, rather than its creation. Increasingly, the emphasis is on short-term, "fast-buck" deals that are at odds with the patient organisation-building on which enduring companies and long-term wealth creation are founded and many large and successful companies were originally built. Mergers and acquisitions are often driven by the prospect of fat bonuses and fees for directors and their City advisers rather than the long-term interests of the companies.

Financial speculation, the source of many modern fortunes, is rarely associated with creating value. As one leading figure in the hedge fund industry has admitted: "When I first went into the City, I could not believe that anyone would want to pay me so much for creating nothing."

Modern entrepreneurship and tax avoidance largely go hand in hand. There are few top tycoons who have not exploited tax loopholes to boost their personal fortunes - at the expense of the broad body of taxpayers. Philip Green has saved hundreds of millions in personal tax in the past three years because ownership of his companies - Bhs and Arcadia - is vested in the hands of his wife, Tina, who is a resident of Monaco. (With 5,000 Britons, mostly businessmen, living in Monaco, the tax haven has become known as le rocher anglais.) Sir Richard Branson, Lakshmi Mittal and Hans Rausing all use offshore tax havens, quite legally, to reduce their tax liabilities...."