Tariffs, Tax Creep, and the Investor's Dilemma: A Deep Dive with ProACT Sam
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Over the last 70 years, globalisation has been shaped by a familiar government formula: tax and spend. As the world opened up and capital flowed freely, states expanded their reach—not only through policies and bureaucracy, but by subtly increasing their hold on your wallet. Enter what we call Tax Creep.
At ProACT Partnership, our mission is to shine a light on this often-overlooked trend—and right now, all eyes are on Tariffs.
Trump’s Liberation Day and the Return of Tariffs
With bold declarations like Liberation Day Tariffs, Trump has shaken the global economic order. His push for tariffs might appear as a dramatic pivot away from the status quo. But is it truly revolutionary—or just another form of Tax Creep dressed in nationalist rhetoric?
Let’s break it down.
Tariff vs VAT vs Consumption Tax – What’s the Difference?
At their core, Tariffs, VAT (Value Added Tax), and other Consumption Taxes are different tools designed to do the same thing: shift the tax burden from income to spending.
Tariffs target goods crossing borders.
VAT hits value added at each step of production and distribution.
Consumption taxes tax spending over saving.
While they differ in execution, the result is the same: more tax on your everyday choices.
From Income Tax to Taxing Everything of Value
It all began with Income Tax—a seemingly straightforward concept: you earn, you pay.
But the tax system didn’t stop there.
Next came taxes on savings and investments:
Dividends
Interest
Capital gains
Property income
Shares
Business profits
In other words, anything that grows from already-taxed income became fair game.
Even inheritance wasn’t spared. Death, they say, is the only certainty—but now, it’s taxable too. Add in pension fund restrictions, and you start to see the bigger picture: Tax Creep is relentless.
Dividends: Moveable Income, Multiple Layers of Tax
For investors and business builders, dividends are a common reward. But they’re also a prime target.
Labelled Moveable Income by tax authorities, dividends often face double or triple taxation:
The business pays corporate tax on profits.
You, the investor, pay dividend tax on what’s left.
Then, if reinvested or passed on, capital gains or inheritance tax may apply.
So what’s the real cost? For many, it’s 40–60% of their investment returns—gone.
Is This Still Capitalism? Or Just Capital Harvesting?
Governments may argue that taxes fund public services, but the pattern is clear: taxes follow value. And the more wealth you create or preserve, the more it becomes a target.
Tariffs may grab headlines. But beneath the surface, they’re part of the same story: Tax Creep is alive and well.
At ProACT Sam, we believe knowledge is power. If you’re an investor, entrepreneur, or business builder, understanding these hidden costs is key to protecting and growing your wealth.
Stay smart. Stay ahead. And never underestimate the silent rise of Tax Creep.
📩 For tailored advice on your tax residency and non-dom options, contact ProACT today.
