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Billionaire talking about why he bought a jet

This is actually old hat. My son, 13, suitably impressed, showed me it on Instagram, Facebook, Whats Up? some months ago. Seems to impress 13 year olds. Good luck to the guy. That much bling, well………….Not my style but I cannot afford one I pay my UK taxes.

I was actually waiting for her, the silly wife, to be whisked up and ingested into the LHS engine as he came under the canopy, but then I would have watched the video on LiveLeak, or Den of Geek.

Fly safe. I want this thing to land l...
EGPF Glasgow

He may have the same wish on occassions too, I suspect

Administrator
Shoreham EGKA, United Kingdom

Nice to see that even a guy who has seen a lot of success moments can enjoy taking delivery of an airplane with this kind of enthusiasm and joy. Have to say, I was almost as silly the day I took delivery of my plane… a sight smaller but still immense satisfaction that she is mine!

LSZH(work) LSZF (GA base), Switzerland

Peter wrote:

He may have the same wish on occassions too, I suspect

Ha, yes. The videos are actually an interesting study in sociology. I have a couple of colourful characters that I know, Glasgow is actually full of them, who are weighed down by trinkets and tings. A Bentley and Hublot for Monday, a Roller and Patik for Tuesday, blah blah. They are all business men, and invariably in roofing or scaffolding.

Apologies in advance to roofers but that business seems to support 14 Lambos and three G wagons. The only others that I know in that league are ex bankers

Toady,, almost to a tee, everything is up in lights with these people. Facebook, Insta, Snapchat to a bizarre degree. I would never think of letting the world know my every move, every meal, every expensive purchase, and I would never brag about NOT paying my taxes. By all means have all the toys, but I would always advise that low key and humble with it is the only and most preferred option.

Fly safe. I want this thing to land l...
EGPF Glasgow

Silvaire wrote:


In the real world, about 40% of total US tax revenues are paid by the highest earning 1%.

The highest 1% also own 40% of the US’s wealth, too.

Before begrudging paying taxes, it does well to remember that nearly all of the 1% of the richest would not be in that position without the following publically funded things (and more) paid out of taxes: a stable political system, the rule of law, publically funded infrastructure like highways and airports, an educated population, the military insuring no one thinks of invading etc. If you’re in the top 1% you have a lot more to lose should these things crumble than if you’re in the bottom 1% (where you have really nothing at all to lose).

So I don’t begrudge it when I make the bank transfer to pay my tax bill every year, because even at my level of wealth, it couldn’t exist without a society that provides all those things.

Andreas IOM

I took me a while to figure this out but in the US they seem to make annual tax laws which are meant to throttle the economy. If they feel that more growth is needed amazing 100% instant write off on investments are allowed. This guy did nothing wrong, he just did exactly what the goverment wanted him to do. As an American explained me in the end he will not get around most of the taxes when he eventually sells the plane as he will have to declare the “hidden value” of that asset then.

This also explains why so many people in the US are buying brand new Cirrus or PA46 every few years which a European would not do. In general the US tax system seems to be more in favour of investments and getting the tax someday later while the Europeans want all their money now which can make some investments difficult. The same applies to VAT. The European want their full VAT right now and here bu after that you are free to use it for 100 years. In the US the initial tax is much lower but then they have use taxes, property taxes etc. So at the end of the day you probably pay a similar amount but it is not all charged in the beginning.

www.ing-golze.de
EDAZ

By all means have all the toys, but I would always advise that low key and humble with it is the only and most preferred option.

That seems to be a personality thing. People with certain types of personalities love to show off, while others would not even think about it. I am glad that we have diversity and we all do not have to be the same or to behave the same.

EDLE, Netherlands

Tax is a funny thing. Different societies have different ideas about what the fairest way to calculate taxes is, and some are polar opposite of the others. They all have a reasonable argument that they are the fairest way.

I think there are essentially four different bases for income tax.

Zero Income Tax
Under this system, individuals don’t pay any income tax. Society is funded by tax on companies and indirect taxes such as VAT/sales tax, property taxes, capital taxes etc.
There are arguments in favour of this such as
- It treats everyone equally…nobody pays any income tax
- It encourages individuals to make as much of themselves as they can as they keep the fruit of their efforts.
- It encourages a higher proportion of very high income people to live in your society, and the less well off locals benefit from the spill over into the local community
- Services can be funded by those who use them rather than everybody.
- Who doesn’t like zero taxes?

I understand Monaco operates on something like this.

A Capped System
Income tax is calculated under various rules. But if you reach a point where you’ve paid X in taxes, then you’re considered to have made your fair contribution to society and you don’t owe tax on any further income.
The arguments in favour of this include
- It costs a country Y to provide services for you (roads, security, etc). If you’ve paid enough tax to cover this for yourself and for a fair share of the poorer in society, then why should you continue to pay more? You’ve paid your fair share.
- It encourages a higher proportion of very high income people to live in your society, and the less well off locals benefit from the spill over into the local community

I understand that the Isle of Man may operate a system similar to this.

A Flat Rate Tax
Under this system, a flat rate of tax is charged on all income. There are no personal allowances or credits and not rate bands. You pay x% of your income no matter what you earn. You pay the same % on your first €£$ and your billionint €£$.
Arguments in favour of this include
- It’s fair on everyone as everyone pays the same percentage of their income.
- There are no tax loopholes or reliefs (which can usually only be enjoyed by those with income to spare)
- It’s very easy to understand and reduces cost of administration such as accountancy fees, tax office systems
- It minimises genuine calculations errors

I understand some if not all of the Channel Islands operate a system such as this

A Progressive Tax
Under this system as your income goes up you end up paying a progressively higher percentage of your income in taxes. The more you earn, the bigger the percentage of your income that goes in taxes.
Arguments in favour of this include
- The more income you have, then more tax you can afford. If you only early €£$10K then handing over 10% of this will be a big sacrifice. But if you earn €£$100M, then handing over 50% of the next €£$10K isn’t going to be near as much hardship.
- It allows those at the very bottom of society to try to improve their situation without having a lot of taxes taken away from their efforts.
- It can lead to a more equal society as quality of living can be somewhat redistributed.

Lots of people will argue in favour of any one of those systems and they all have reasonable arguments. It’s up to a society to choose which one they want to use.

I don’t blame this guy for buying his jet. He looked at the rules that he’s asked to live by and asked himself “Of the options that society has given me, which is the one that I would suit me best?” If the American tax system says that he can write off the cost of his jet in year 1, then that’s what it says. It will probably apply equally to the company car that is supplied to some sales man, or a guy buying a new computer for his web development business which he operate from his bedroom. If society decides that this is unfair, they just have to change the rules.

It’s far more legitimate than someone operating outside the tax rules eg the employee doing a nixer (job outside their employment) and pocketing the cash and evading paying the tax on that income.

I’d be far more critical if he set up bogus companies in some off shore country to evade tax and hide his earnings and operate outside the rules set by society. But if you operate inside the rules set by society then that’s fair. Often these rules are set up to help encourage high wealth individuals to send or invest their wealth in particular industries that the government wishes to support grow or even save from bankruptcy.

EIWT Weston, Ireland

I think the “zero” option is the best and if I was setting up a new country it’s what I would do, but (a) you would never get it past the socialists and (b) you could never implement it anyway, after you have been running one of the other systems, because it would impoverish the “poor”.

One has to remember that income tax is only a bit of Govt revenues. Most people think it is all the tax that exists but actually the Govt gets a big pile from Corporation tax… And this guy bought the jet to save a load of CT, not IT.

Administrator
Shoreham EGKA, United Kingdom

I’m in favor of flat tax, I like simplicity in most things and prefer a more disciplined, less invasive role of government. It won’t ever pass in the US, at least not without a lot of compromises, because most people have adjusted their lives to match the existing system of deductions, including me. The recent changes in tax law are a move in the direction of flat tax – and I’m paying a little more income tax as a result.

@Mooney_Driver, this video was not made for the US market. It was made for the UK market where selling crude caricatures of wealthy people, very much including Americans, makes money. The host says his hope is to “put the BBC out of business”. There are a few Americans who appreciate these kind of self promoting blowhards, but most Americans are not in that category. Building productive business and working within tax law does not invariably equate to having an annoying personality, although if money can be made selling that image to the UK audience I’m sure he or somebody else will do it

I think its great if this guy or anybody else buys a biz jet and uses it, but self publicity to make money is a cancer on society. It’s bad enough in politics (a notably inefficient part of life) where it is a necessary evil to get the vote and then do things like move towards a flat tax.

Last Edited by Silvaire at 07 Feb 15:51
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