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28 January 2014

Where are Britain’s selfless billionaires?

Rich people in other countries demand they be required to pay higher taxes more often than you might think. So why doesn't Britain have a Warren Buffett or a Bill Gates, willing to pay a little bit more tax for everybody's benefit?

By Jonn Elledge

Let’s get one thing straight: no one likes paying tax. Most of us, though, are willing to put up with it as the price we pay for living in a civilised country. Because a world in which we give up a chunk of our income to pay for an imperfect government is better than one in which we get to keep our money, but can’t leave the house to spend it because all the roads are potholed and anyway our neighbours have plague.

Since we’re going to have to pay tax whether we like it or not, then it makes some kind of sense for those who can most easily afford it to make the biggest contribution. That’s certainly what the public think: support for Ed Balls’ plan to hike the taxes on the top one per cent is, despite what the newspapers might tell you, consistently running at around 60 per cent.

Oddly enough, though, there’s been remarkably little support for the plan from those who are actually going to have to pay the higher tax. The City, the business lobby and the right-wing press have all come out with responses so doom-laden that you’d think Balls had promised to nationalise Surrey.

This may seem a bit on the dog-bites-man side, but, actually, rich people demand they be required to pay higher taxes more often than you might think. In 2009, nearly 50 German billionaires signed a petition calling for the government to raise their own taxes, so they could help their country through the fiscal crisis. Two years later 16 of France’s wealthiest people did the same.

This isn’t just some kind of weird, continental hangover from socialism, either. Across the Atlantic, in the home of the free itself, Warren Buffett has been demanding his own government stop coddling him for some time; so, as it happens, has Bill Gates.

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All these people, though, have one glaring characteristic in common: none of them are British. Here in blighty, it’s hard to find anyone who’ll come out vocally in favour of a policy that’s going to cost them personally.  There’s J K Rowling, of course, but she’s unusual in that she’s been dependent on the welfare budget and thus feels a sense of personal responsibility that many others lack.

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And while there are other rich folk who’ve made a point of not bitching about taxes – James Dyson, Duncan Bannatyne, the Phones4U founder John Caudwell – the debate is generally couched in terms of “being happy to pay” rather than “being happy to pay more”. They don’t call for higher taxes, merely stress that people shouldn’t avoid the existing ones. And even then, Dyson’s business empire spent four years domiciled in Malta, before coming back onshore late last year.

All of which raises a question – where are our selfless billionaires? Those tricksy foreigners who’ve spoken in favour of higher taxes are no doubt unusual, but their lack of a parallel here in Britain is striking all the same.

One possibility is that our rich are, in global terms, genuinely hard done by (don’t laugh, it could happen). A top tax rate of 45 per cent, after all, isn’t notably low in global terms.  Or, just maybe, Balls’ plan really is a bad one. Maybe, if the government were to take one more pound in every £20 that high earners make over £150k, it really would succeed only in slashing growth and killing innovation.

We can’t entirely discount this possibility – so those among the hyper-wealthy who desperately do want to do more for the nation, and merely think that this is a bad way of doing it, are welcome to set out their alternative plans. An open letter to the Daily Telegraph should do the job nicely.

Or maybe something else is going on. Maybe most super-wealthy Britons genuinely believe the state shouldn’t get a single penny more out of them. After all, continental billionaires grew up with the European social model; American ones have a long history of philanthropy. Ours, though, are used to a political narrative in which government spending is always inefficient, the poor are always feckless, those on benefits always scroungers. The world repeatedly tells them that most tax is wasted. Given that, why would any sane person want to waste more?

No one likes paying tax. But as long as we never talk about the reasons why we do it, we’ll like it even less.