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At 18:38 23/11/00 -0500, Daniel Goncharoff wrote:
>Looking away from the US for a moment, the UK provides a wonderful
>example of an election having no real impact on the economy.
With respect, I beg to differ.
One of the things Labour did was to sneak in a nasty little piece of tax
legislation now known as "IR35". This significantly worsened the tax
position of most self-employed computer consultants, train drivers and oil
platform repair divers. (All three types of people operate through
personal service companies.)
As a result, people in IT and oil either left the country or started doing
other business. The train drivers didn't really have the choice of leaving
the country, but many walked away from driving trains and now do other
skilled casual work.
Labour's calculation was that they'd be able to squeeze a decent sized
chunk of revenue from a relatively small constituency - all in this
affected only about 55,000 people. What they overlooked were the
demographics of that labour pool - mostly single males under 35, highly
skilled and highly mobile - and the fact that exactly these people are
critical to a modern economy's infrastructure.
They removed a large contribution to Britain's competitiveness
overnight. To top it off, because the people affected reacted the way they
did, the exercise resulted in a GBP65MM *reduction* in tax take in the
first year of operation.
The real impact isn't highly visible because it results in increased costs
for customers of the remaining IT people and divers, and generally lower
quality of services rendered - most of the good people got out of the
country or out of the businesses. Easily visible or not - it is there, it
is real, and it is hurting the economy.
Regards,
Stefan Schulz
Suaviter Limited
prog1@xxxxxxxxxxxxxx
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