Exit tax on entrepreneurs
8 October 2024
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Economic Theory
9 October 2024
Julian Jessop quoted in iNews
IEA Economics Fellow Julian Jessop was referenced in iNews discussing proposed exit taxes on entrepreneurs that leave the UK.
The article said:
“It also said the UK could levy the tax without affecting most emigrants, as the top 10 wealthiest leavers each year account for 73 per cent of potential revenue…The academics argue that countries including Canada, Australia and the US already levy taxes similar to the one being proposed on emigrants…The UK has not done so previously because European Union (EU) free movement rules would have rendered it ineffective, but this obstacle no longer exists now that the UK has left the EU. However, some economists said the change would send a ‘terrible signal’ to those looking to start a business in the UK.
“Julian Jessop, an independent economist, and an economics fellow at the Institute of Economic Affairs, said: ‘In isolation this proposal is not unreasonable. If people would normally pay taxes on capital gains made in the UK, it does seem unfair that they can avoid them simply by moving overseas. Nonetheless, the Budget is already likely to include many other measures that penalise investment, saving and entrepreneurship. Adding yet another would send a terrible signal to anyone looking to start a business here. There is a risk too that a punitive exit tax hits sectors where entrepreneurs are especially mobile – notably high-tech industries – and therefore deters them from setting up in the UK in the first place.”
You can read the full article here.
The article said:
“It also said the UK could levy the tax without affecting most emigrants, as the top 10 wealthiest leavers each year account for 73 per cent of potential revenue…The academics argue that countries including Canada, Australia and the US already levy taxes similar to the one being proposed on emigrants…The UK has not done so previously because European Union (EU) free movement rules would have rendered it ineffective, but this obstacle no longer exists now that the UK has left the EU. However, some economists said the change would send a ‘terrible signal’ to those looking to start a business in the UK.
“Julian Jessop, an independent economist, and an economics fellow at the Institute of Economic Affairs, said: ‘In isolation this proposal is not unreasonable. If people would normally pay taxes on capital gains made in the UK, it does seem unfair that they can avoid them simply by moving overseas. Nonetheless, the Budget is already likely to include many other measures that penalise investment, saving and entrepreneurship. Adding yet another would send a terrible signal to anyone looking to start a business here. There is a risk too that a punitive exit tax hits sectors where entrepreneurs are especially mobile – notably high-tech industries – and therefore deters them from setting up in the UK in the first place.”
You can read the full article here.
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