Ed Davey should leave Dubai tax exiles alone
Ed Davey’s calls for American-style citizenship taxes on British expats in Dubai to pay for their military protection is completely unjustified, argues Charles Amos
Last week Ed Davey challenged Keir Starmer to introduce American-style citizenship taxation on Brits who have fled to Dubai, but who now allegedly ask for military protection. His argument is simply that if you benefit from the British military you should pay for the British military. Ultimately, Davey’s argument has little to do with stopping free riding. Instead, it is simply an attack on rich people who have decided to dodge phoney obligations to social justice. Contra Davey, there exists no case for British tax exiles to be forced to pay British taxes, even if they do receive military protection from the RAF.
In 2024, a total of 240,000 Britons lived in Dubai and, due to the Iran War, as of early March, the British government has arranged for chartered flights out of the area, for a charge, to keep them safe. Alongside an evacuation effort, Starmer has also said that planes are “in the sky” in the Middle East “to protect our people, our interests and our allies”. Davey claims British tax exiles should be paying for this, because, generally speaking, people should pay for what they get. Free riding is wrong. Although I think this fair play argument, espoused by political philosophers such as George Klosko, is the best argument for the limited right of the state to tax, Davey’s use of it is flawed at best.
Davey wishes to replicate the American tax scheme for nonresidents which requires they pay tax on their worldwide income simply in virtue of being an American citizen. At the moment, British citizens in Dubai do not pay UK tax on earnings generated there. Important to the American citizen tax scheme is the Foreign Tax Credit, which enables them to reduce their tax bill to the US Treasury by one dollar for every one dollar they pay to the government they reside under. Where tax is lower, as in Dubai, than in the USA, the US citizen will cough up the difference to the US Treasury. Given defence spending in the UK makes up less than 7 per cent of the government’s budget, but Davey wants British citizens to pay British tax rates on all of their worldwide income, then clearly the vast majority of the tax Davey wants levied is about redistribution and not paying for military protection used.
A sledgehammer to crack a nut
It might be said keeping fighter jets in the sky for people in the Middle East alone is very expensive, therefore warrants higher taxes on British people in the Middle East solely to finance their protection. Maybe. But then Davey’s wish to replicate the American citizenship scheme of taxation goes too far, because there are many low tax jurisdictions such as Singapore that are entirely peaceful and require no protection from the British military. Davey’s answer to the Dubai problem is to use a sledge hammer to crack a nut. Nevertheless, would a specific compulsory fee to British tax exiles in the Middle East be warranted given British air protection?
Does bestowing any benefit on someone justify extracting money from them to pay for such a benefit? No. Robert Nozick asks us to think of a person who shoves books through people’s letterboxes and then demands money from them. Can the book shover forcefully take money from the book receivers? Obviously not. Analogously, the British government providing some benefit via military protection to British tax exiles does not warrant it levying taxation on them. According to Isabel Oakeshott British citizens are ‘chill’ about the situation and probably would be even without British planes in the sky. The real question is whether tax can be taken from people on the basis of providing net benefits to them?
British tax exiles have removed their consent to paying British tax by leaving, hence, any taxation on them from the British state simply amounts to theft
Again, the answer must be ‘no’. If your neighbour creates a garden next to your house which you’d pay £10 for and she demands a £1 contribution from you to keep it tendered next year, she still can’t use force to take that £1 from you. Why? Because individuals shouldn’t be used for purposes to which they do not consent. British tax exiles in Dubai do not owe the British government anything even if the British military do provide protection which is net beneficial to them. The only basis on which British tax exiles might claim military protection is as restitution for any tax they’ve paid to the UK government, which, as Oakeshott notes, is still the case for many with UK-based earnings.
British tax exiles have removed their consent to paying British tax by leaving, hence, any taxation on them from the British state simply amounts to theft. Davey’s argument that tax exiles should pay full UK taxes because they receive military protection doesn’t work even on its own grounds, because full UK taxes are not needed just to pay for their military protection. Besides, bestowing a benefit on a person, or even a net benefit, is no reason to take money from them to finance said benefit. Good buskers can’t pick pocket listeners who enjoy them, so neither should the British government pick pocket tax exiles in Dubai just because they fly a few planes over their heads now and then.
Charles Amos works in the haulage industry and writes The Musing Individualist Substackin his spare time.