Politician: A well-known British politician loses his popularity because of a tax saga.
Rishi Sunak was once thought of as a possible successor to Prime Minister Boris Johnson. Now he has to answer questions about his rich wife's tax status, and about how long he had an American green card while he was in office.
Boris Johnson has been embroiled in many scandals as the country's prime minister. Rishi Sunak, a popular British politician who serves as the chancellor of the Exchequer, looked like a good candidate to take his place two months ago.
His future has been clouded by revelations about the tax status of his wife, as well as the fact that he was in the U.S. for 19 months after becoming chancellor, the second most powerful job in the British government.
Even for a country that has seen a lot of political turmoil, Mr. Sunak's fall has been very steep.
John Johnson, who had to defend Sunak and deny that his aides had been spreading stories about him that were not true. Sunak's party was held at 10 Downing Street in breach of coronavirus rules.
Tim Bale, a professor of politics at Queen Mary, University of London, said that it's hard to see him becoming the next leader "any time soon, or maybe ever." Also, it could be a sign of how someone who is so rich feels like they are invincible and entitled.
In Britain, Sunak's wife, Akshata Murty, is a non-domiciled person, which means that she doesn't have to pay taxes on dividends from her father's technology company, Infosys. This meant that she didn't have to pay millions of pounds a year in taxes on dividends from her father's company. On Friday, Mrs. Murty tried to calm her husband down by saying that she would start paying taxes in Britain on her income from outside the country.
The original arrangement, which is common for foreigners living in Britain for a short time, has put a spotlight on the couple's extreme wealth. Politically, Sunak's lavish lifestyle has made him look out of touch with ordinary Britons who are having a hard time making ends meet because of the pandemic. Sunak is raising taxes to pay for the shortfall caused by the pandemic.
It doesn't matter that Rishi is "ludicrously, fabulously rich," says Jill Rutter, who used to work for the Treasury Department. She's now a researcher at the think tank, UK in a Changed Europe. It's another thing to be rich and appear to be a tax dodger.
He's a normally calm politician, but Mr. Sunak, 41, isn't used to the attention. At first, he said that people were unfairly "smearing" his wife. It makes sense because the chancellor is in charge of making sure that the taxes in Britain are fair. Ms. Rutter said that questions about how much money Mrs. Murty paid in taxes were both relevant and legitimate.
Sunak then said in an interview with the Sun newspaper that it "wouldn't be reasonable or fair" to ask his wife to cut ties with her country because she's my wife.
he said, "She loves her country." "I would never give up my British citizenship because I love it as much as I do."
Some people didn't like it because there were two problems with it: Mr. Sunak had a green card, which meant that for tax purposes, he was saying that he lived in the United States for a long time. Before his first trip to the United States as chancellor last October, he gave up the card.
More than that, hundreds of thousands of Indian citizens live in the UK without having non-domiciled status. To get the classification, Ms. Murty paid 30,000 pounds, or about $39,000. Tax experts say she could have saved 20 million pounds or about $26 million by paying dividend taxes in a low-tax country like India. Neither she nor anyone else can say where she pays her taxes.
In Richard Murphy's words: "To say that she has to be a non-domiciled person in order to come home is ridiculous." He thought it would make people angry. In terms of politics, he said, "This one is going to hurt a lot more than the rest."
Opposition leaders have asked the government to look into whether Mr. Sunak broke the rules for ministers. Mrs. Murty has agreed to pay British taxes on the money she makes outside the country. She will keep her non-domiciled status, which could help her avoid hefty inheritance tax.
Mr. Johnson said on Friday that Mr. Sunak was doing a "great job." There was a lot of speculation that Downing Street was spreading bad things about him because of all the talk about parties, which made them less friendly. There was a lot of talk that Sunak was going to try to take over as leader of the Conservative Party. He distanced himself from Johnson during the earlier scandal.
But Mr. Sunak didn't fire, and things have worked out for Mr. Johnson and against him. Mr. Johnson was able to show off his friendship with Ukraine's President Volodymyr Zelensky, whom he met in Kyiv on Saturday, and to take a hard line against President Vladimir V. Putin because of Russia's invasion of Ukraine. In Moscow, Mr. Sunak was the only person who could answer questions about why Infosys had not shut down its Moscow office. It has since done this.
As a result, Mr. Sunak has become a well-known figure in British economic and tax policies that are putting a lot of pressure on people in Britain. In the past, Mr. Sunak was seen as a kind paymaster who gave out hundreds of billions of pounds of subsidies to help people avoid the ravages of the pandemic.
Rutter said: "Rishi Sunak is having trouble because these problems are coming out at the same time that he is also getting bad press for being Scrooge-like." In this case, "What does this say about the chancellor's decision making?"
In many ways, Mr. Sunak is a good example of how multiethnic Britain should be. He is the oldest son of Indian immigrants who went to Winchester College, which is one of the best in the country. Then, after he graduated from Oxford, he went to Stanford to get an MBA, and he met Ms. Murty there, too! In the past, he worked for Goldman Sachs and hedge funds. Then, he ran for a safe Conservative seat in Yorkshire. His father-in-law, Narayana Murthy, gave him leaflets. People in the area called Mr. Sunak "Maharajah of the Yorkshire Dales" when he won.
Now, they are more likely to make fun of Mr. Sunak's royal tastes. In 2020, he was mocked for having a $235 "smart mug" that keeps tea or coffee at the right temperature. It went wrong last month when Mr. Sunak didn't know how to fill up his car at a gas station.
That makes him a target in British politics, where things can get rough at times. Papers that once talked about Mr. Sunak becoming the next prime minister now wonder if Mr. Johnson will move him down in the cabinet.
"Rishi Sunak could become one of those souffle politicians," Professor Bale said. "They look like they're rising well, but then they fall flat."