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 sale 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 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.
Wow, it sure isn’t difficult to tell what your politics are? You mention three seperate Congressman that “TRIED” to pull the crap but didn’t get away with it, and all three that you just happen to use as an example are Republicans.
But you just happen to overlook that one of the most powerful Democrats there are that did get away with it for several years, Congressman Charlie Rangel, of New York. Congressman Rangel, unlike the three you mentioned, Congressional District is aproximately one hour by train everyday. And you just happen to overlook that Congressman Rangel also owns property in the Caribbean that also received illegal tax benefits on.
And the Democrats leave the likes not only in office but in powerful positions.
I did mention that there were 22 Congressmen involved during the last scandal. The three that are currently being investigated in DC are the three that I mentioned. Not a conspiracy.
And if you actually search the site, you’ll see that I’ve blogged Rangel’s tax issues before: http://www.taxgirl.com/rangel-refuses-to-give-up-chair-despite-tax-probe/ – and I cut him no slack. Please don’t make assumptions without looking at the whole picture.
Kelly,
At this point, I don’t care if you name a hundred republicans. The GOP needs a major cleanup. One thing I will say in defense of the GOP is that at least the GOP opposes many of the tax laws they break (ha ha). They are much less hypocritical than the Dems. Since the Dems are in charge now, I can expect many inquiries of GOP’s dealings in the near future. The Dems have the GOP where they want them and are going to do everything in their power to keep the GOP in its place. That will be the only way they will be able to maintain power when their policies fail to resurrect the economy in the long term.
Everybody knows there is systemic corruption in both parties and smart people know that as long as they have $3 trillion plus to spend every year that the corruption will continue. It is the massive size and budget of the government that breeds massive corruption and thus, reducing the size of government is the only way to reduce corruption.
I will agree re the systemic corruption. It’s amazing the lifestyles that many of our politicians enjoy on their “salaries” – it’s clear that they are benefiting from the “perks” of the job. We see it in PA all of the time. In Philly, the Inquirer just did a massive expose into the political favor jobs at the BRT – it’s crazy what goes on at our expense.
That said, I wouldn’t say that this investigation is linked to partisan politics. The homestead exemption received a lot of attention in 2005 and then it faded. But in the midst of a recession, when taxpayers are chomping at the bit, this kind of thing is going to matter again. Sadly, we as taxpayers don’t seem to complain as loudly when things are going well. We tend to accept it. That’s exactly why it continues.
When this scandal first broke in the UK, both major parties were conspicuously silent on it — because both were doing it. I guess when it comes to U.S. politicians, we can say that the apple doesn’t fall far from the tree.
Melody, it’s not surprising that they were both quiet – maybe hoping it would go away? When it didn’t, it became clear that they needed to do something. The Tories actually formed their own council to review these issues – that’s the “scrutiny panel” referenced in the post.