It’s not just politicians in the US who are feeling anger from taxpayers over perceived “perks” in the midst of an economic recession: UK pols are feeling it, too.
Parliament in the UK has been slammed recently with accusations that politicians are unfairly benefiting from their positions. British papers have recently been citing personal expense reimbursements and tax “loopholes” as ways that government officials have been taking advantage of their positions.
Next in line to be called out? Eleanor Laing, a Conservative MP for Essing Forest. She reportedly paid no capital gains tax on a £1 million ($1,635,915.24 in US dollars using today’s exchange rate) profit from the sell of an apartment in London.
Laing bought the apartment for less than £800,000 (approximately $1.3 million US). More than 10% of the purchase price paid out of taxpayer-funded allowances for a second residence, despite the fact that her primary residence is just an hour away. She sold the apartment for more than £1.8 million (just under $3 million US) last July.
Laing claimed that the apartment was her “second home” for purposes of nearly £90,000 in taxpayer-funded reimbursements. She then turned around and claimed the apartment as her primary residence for purposes of escaping capital gains tax on the sale of the apartment. She used the proceeds from the sale to buy another apartment on the same block.
Laing says that she has not done anything wrong. However, her own party, the Tories, may disagree with her. She will have to appear before the the party’s scrutiny panel to determine how much she must pay in taxes. If she is forced to pay the entire amount, it would be the biggest payback from any MP caught in the expenses scandal, which has rocked the UK Parliament in recent months. Previously, Conservative MP John Butterfill was thought to have the highest repayment obligation.
Sir John Butterfill (he was knighted in 2003) did exactly the same thing. He bought a taxpayer-funded “second home” in Surrey. He then sold the property, racking up £600,000 profit. He then informed HM Revenue & Customs (the equivalent of IRS) that it was his primary residence and therefore exempt from capital gains tax.
Butterfill also claimed tens of thousands of dollars in fees for the country estate/second home/”primary residence.” He has agreed to refund more than £20,000 worth of fees that he claimed as living expenses. Over the last five years, he has claimed £17,000 of expenses for his servants’ quarters alone. That’s right: servants’ quarters. For his second home. Which he claims was really his primary residence.
But don’t think that sort of thing is limited to the Brits. We have our similar scandals in the US – Congress and other pols often appeared “confused” about where they really live. Just ask Tom Petri (R-WI), Rep. Phil Gingrey (R-GA), and Rep. Steve King (R-IA), each of whom recently tried to claim a homeowner’s exemption for their residences in DC. The exemption is meant solely for DC homeowners who maintain their primary residence in the District, not for taxpayer funded second residences. And lest you think it’s an accidental “oops”, note that Karl Rove and 22 members of Congress were slammed for the same thing in 2005 (Rove did agree to pay back the taxes that he inappropriately exempted).
It seems that everywhere you go, politicians seem to believe that public trust = public trust fund.
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