An agreeable aspect of living in New York in 1983 was not paying UK tax. I was not there long enough to be liable to US tax either. By 1989, when I was in Singapore, this tax holiday had been abolished. I would have had to stay for more than a year. Worse, the Singapore taxman tried to put the bite on me. Tax rules often change.
Harold Nicolson wrote in his diary on 4th January 1944:
“I get a letter today from John Masefield, as President of the Incorporated Society of Authors etc asking me why the BBC have ‘banned’ PG Wodehouse. If anybody we do not want to employ is regarded as ‘banned’ then the BBC will lose all freedom of selection. Moreover, there is no doubt that Wodehouse allowed himself, for a ‘consideration’, to be used for broadcasts which were in the interest of the enemy. As such he is a traitor and should not be used. I do not want to see Wodehouse shot on Tower Hill. But I resent the theory that ‘poor PG is so innocent that he is not responsible’. A man who has shown such ingenuity and resource in evading British and American income tax cannot be classed as impractical.”
Harold wrote the above both in good faith and ignorance. Plum was only too aware of the value of money when he was unable to follow his brother to Oxford because his father’s pension wouldn’t stretch to it. (The pension was paid in rupees and the rupee fell in 1900.) Two years working at the Hong Kong and Shanghai Bank in London taught him nothing about finance but he did brood on the rapacity of the taxman. Here is the first paragraph of an article he wrote for Vanity Fair in 1915.
“As I sit in my poverty-stricken home, looking at the place where the piano used to be before I had to sell it to pay my income tax, I find myself in thoughtful mood. The first agony of the separation from my hard-earned, so to speak income, is over, and I can see that I was unjust in my original opinion of the United States Government. At first, I felt towards the U.S.G. as I would feel toward any perfect stranger who insinuated himself into my home and stood me on my head and went through my pockets. The only difference I could see between the U.S.G. and the ordinary practitioner in a black mask was the latter occasionally left his victim’s carfare.”
In the 1920s and 1930s Plum’s earnings were substantial but he showed none of the ingenuity and resource that Harold attributes to him. He placed his affairs in the hands of a succession of incompetents and the upshot was that no tax returns were filed in the US for many years resulting, not unreasonably, in a gigantic tax bill being served in the 1930s, further inflated by fines for not filing returns and for filing false returns. Plum, shrewdly, observed that he couldn’t have done both.
Meanwhile, the Inland Revenue in the UK expected Plum to pay tax and his capital, invested on Wall Street, was wiped out in the Crash. He was not a pauper but it became evident that paying tax in both the US and the UK was not sustainable – hence his move to France. The French are notoriously lax at collecting tax so I wonder if he paid any French tax? The answer may lie in Tony Ring’s 1995 book, You Simply Hit Them with an Axe. The title derives from the lyrics Plum wrote for Sitting Pretty.
In Bongo, it’s on the Congo,
And boy, what a spot.
Quite full of things delightful,
And few that are not.
There no one collars your hard-earned dollars,
They’ve a system that’s a bear:
When government assessors call
To try and sneak your little all
You simply hit them with an axe;
It’s how you pay your income tax
In Bongo, it’s on the Congo
And I wish that I was there.