The debate over the 50p tax rate overlooks a bigger problem, tax havens (Letters, March 20).

Nicholas Shaxson's book Treasure Islands shows these are the main cause of higher taxes for the majority and small businesses, via billionaires, banks and big firms avoiding taxes through them.

Shaxson estimates that around $12 trillion, a quarter of the world's wealth, goes untaxed in tax havens. If banks and companies were included, the amount would be at least twice that. Every Footsie 100 company from Tesco to RBS has subsidiaries or partners in havens to avoid tax.

Tax havens also provide secrecy to avoid regulation, which allowed the fraudulent financial derivatives such as collateral debt obligations which caused the financial crisis. Every fraud from BCCI to Enron has relied on them.

Unless tax havens are closed down effective regulation is impossible and it is only a matter of time before there is another crisis. The banks and hedge funds don't care as they have bought up enough political influence and become so large they are guaranteed another bail-out.

Politicians claim it's impossible to close them down, yet capital controls (ie limits on transferring money between countries) worked fine from 1945 till 1971 under the Bretton Woods agreement. They claim there's no political will –but that's the result of politicians and billionaire newspaper owners telling everyone the problem is benefit fraud, estimated at just 0.6% of claims.

Politicians say they can't do anything without an international agreement. In fact if one country takes a lead in closing down it's tax havens, public opinion in others will demand they follow. The UK, which allows tax havens in the Square Mile (governed only by the City of London Corporation), Jersey and the Cayman Islands, could take the lead.

Duncan McFarlane,

Beanshields Farm,



Are we expected to believe that someone in the 50p tax bracket on earnings over £150,000 may pay up to five times more in tax when the rate is reduced to 45p and that someone who sees the 40p tax band reduced from £42,476 to £41,450 will think this likely or equitable? I'm glad that Mr Osborne has removed the disincentive I had of aspiring to upwards of £150,000.

R Russell Smith,

96 Milton Road,


Targeting the PAYE system (noting also that National Insurance contributions drop from 12% to 2% on earnings above £42,000) and in particular people with medium to good earnings while treating the rich like listed buildings is hardly surprising.

Twas ever thus. But, by George, pointedly provoking the pensioners is, and petty minded with it.

David Easton,

30 Pullar Avenue,

Bridge of Allan.

The hysteria generated by the Granny Tax is as unfounded as George Osborne's presentational and policy skills are incompetent ("Blow as 'granny tax' aims to raise £3.3bn", The Herald, March 22).

Why on earth should pensioners such as I (and much wealthier bankers, NHS consultants et al who may indeed still be working) benefit from a higher tax-free allowance than the hard-working population, many with young families, in addition to paying no National Insurance, purely due to our age?

Whatever the original justification was for age-related allowances, it no longer exists.

What the Coalition should have announced in June 2010 was an early move to incorporating our tax-free cash benefits like the winter fuel allowance into the taxable state pension, linking that pension to both the tax-free allowance and the minimum wage for 18 to 20-year-olds, amalgamating income tax and NIC, extending VAT to many VAT-free items and improving the progressive tax structure.

John Birkett,

12 Horseleys Park,

St Andrews.