Wealth tax and the rich

[the0ni0nking]

History has told us that wealth taxes never raise anything like what is claimed, cause many people to emigrate, lead to a rise in tax avoidance (and evasion), causes a fall in investment (particularly in private businesses and farms) and many of the rich will adjust their behaviour in ways which further damages the economy (e.g. close their businesses)

Some of us on TLF are "the rich" and we (and our money) can be quite mobile.

Spain introduced a wealth tax after the financial crises but the autonomous communities have slowly moved towards a wealth tax of 0%. Sure, there are some that still have a wealth tax but the general movement seems to be in that direction.

The legislation is still in place (as I understood that was set nationally) but the communities set the rate and so Madrid I'm fairly sure is 0%; as is Andalusia. Valencia still has one but there are allowances.

Furthermore, certain visas that the wealthy might consider taking to move to Spain enable them to exclude assets held overseas from their wealth. & if wealth tax legislation were to come in where those overseas assets are held, for the seriously wealthy where no doubt any wealth tax would seek to gain the most, I suspect some appropriate tax restructuring of their wealth would end up with it owned offshore from that country rather swiftly.

The politics of envy never will work out well.

[JohnB]

The politics of envy never will work out well.

Have you just written an A-level essay on the French Revolution?

[Trent]

It can be quite amusing to hear that those that presume to be rich shout from the government rooftops thou shalt not tax the rich. If only those not that well off could have a government shouting for them.

[Lootman]

The gap between the rich and the rest is getting wider - this has to be checked and the gap needs to narrow. The only way to do this is to tax the rich.

History has told us that wealth taxes never raise anything like what is claimed, cause many people to emigrate, lead to a rise in tax avoidance (and evasion), causes a fall in investment (particularly in private businesses and farms) and many of the rich will adjust their behaviour in ways which further damages the economy (e.g. close their businesses)

Some of us on TLF are "the rich" and we (and our money) can be quite mobile.

One giveaway that someone is motivated merely by envy is when they argue for a wealth tax and yet they do not articulate why the extra money is even needed or what it is for.

That shows the true motive is not the provision of better services, but rather it is confiscating wealth for the sake of it, just because it is there and it somehow offends them.

So then it is not about helping the poor but simply harming the rich. Classic class warfare.

[Gerry557]

Taxing the wealthy is a good thing - check out Gary’s Economics on YouTube. He does a great job of explaining it all.

Do you have a link as there are so many videos

[scotview]

It can be quite amusing to hear that those that presume to be rich shout from the government rooftops thou shalt not tax the rich. If only those not that well off could have a government shouting for them.

Here's an alternative wee thought.

Work out what the cost is percapita (adult) for all UK services, health, water, roads, rubbish collection, defence etal.

Then each person pays for their share of the nations public services/expenditure on a per capita basis, (same as the BBC license for example), just a bigger number. What's wrong with that ?

[mc2fool]

Here's an alternative wee thought.

Work out what the cost is percapita (adult) for all UK services, health, water, roads, rubbish collection, defence etal.

Then each person pays for their share of the nations public services/expenditure on a per capita basis, (same as the BBC license for example), just a bigger number. What's wrong with that ?

See https://en.wikipedia.org/wiki/Poll_tax_riots

[SalvorHardin]

A parable about overtaxing the rich (not original, it's quite old and out of copyright)

Every day, ten men went to a restaurant for dinner together. The bill for all ten is £100 each day. The bill was paid the way we pay our taxes, the first four would pay nothing; the fifth would pay £1; the sixth would pay £3; the seventh £7; the eighth £12; the ninth £18. The tenth man – the richest – would pay £59. Although the ten men didn't share the bill equally, they all seemed content enough with the arrangement – until the restaurant owner gave them a discount.

"You're all very good customers," the owner said, "so I'm going to reduce the cost of your daily meal by £20. I'm going to charge you just £80 in total." The ten men looked at each other and seemed genuinely surprised, but quite happy about the news.

The first four men are unaffected because they weren't paying for their meals anyway. They'll still eat for free. The big question is how to divide the £20 in savings amongst the remaining six in a way that's fair for each of them. They realized that £20 divided by six is £3.33, but if they subtract that amount from each person's share, then the fifth and sixth men be paid to eat their meals. The restaurant owner suggested that it would be fair to reduce each person's bill by roughly the same percentage, and he proceeded to work out the amounts that each should pay.

The results? The fifth man now also paid nothing, the sixth now paid in £2, the seventh paid £5, the eighth paid £9, the ninth paid £14, leaving the tenth man with a bill of £50 instead of £59. Outside the restaurant, the men began to compare their savings. "I only got one pound out of the £20," said the sixth man, pointing to the 10th man, "and he got £9!" "Yeah, that's right," exclaimed the fifth man. "I only saved a pound, too! It's not fair that he got nine times more than me!" "That's true," shouted the seventh man. "Why should he get back £9 when I only got £2? The rich get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine outraged men surrounded the tenth man and threatened him. The next day, he didn't show up for dinner, so the nine sat down and ate without him. When it came time to pay the bill, they faced a problem that they hadn't faced before. They were £50 short.

What happened to the tenth man? He now eats at a different restaurant.

[Trent]

Taxing the wealthy is a good thing - check out Gary’s Economics on YouTube. He does a great job of explaining it all.

Do you have a link as there are so many videos

Try this one - https://www.youtube.com/watch?v=z8bt95a5TS4

I find he has the right idea on what’s been happening and what needs to change. Hoping to get reading his book.

[Steveam]

First things first … why do we need to raise more? I think we’re vastly under investing in infrastructure, health care, social care, education and defence.

How about a more broad based approach to wealth taxation?
Let’s look at SIPPs being used to avoid IHT, let’s examine whether (large) ISAs really encourage people to save, perhaps a root and branch review of IHT to remove avoidance, why no CGT on one’s home? CGT and IT and dividend taxation to be rationalised to avoid/stop taxation biases (see GILTS taxation).

Disclosure: all the above would adversely affect me and I’d welcome it for a better society.

Best wishes,

Steve

[scrumpyjack]

The plan to buy land for building compulsorily at the agricultural value and then flog it to developers at building land prices will raise quite a lot!

[chrissyr]

I don't get CGT on a home (prime).
I buy a house to live in (I need it) for 100k.
I pay 5k a year in mortgage payments, 1k in maintenence and probably another 1k. So after 10 years it's cost me 170k.
When I sell it for 170k I owe the government 12 to 14k or whatever they decide.

For living in a house?

[Gerry557]

Do you have a link as there are so many videos

Try this one - https://www.youtube.com/watch?v=z8bt95a5TS4

I find he has the right idea on what’s been happening and what needs to change. Hoping to get reading his book.

So he wants to tax "massively" those with more than £10m to reduce "our" taxes.

Pity he didn't specify how many of these 10m people there are, how much this would raise and how much less the rest of us would pay. It opens up other questions too like how would taxes be lowered to cover all those people. I suppose me with £9.9m will get a tax reduction, well until I go over.

So a tax reduction to spend on wine women and song, I'm in.

[JohnB]

If when buying a house your £170k is repaid in full after a decade, you've had free accommodation over that time. Pity the poor renter who's paid out £100k with nothing to show for it. Why shouldn't you pay £10k in tax.

Of course if house prices had risen with inflation, then there was no real gain, so no real justification for a gains based tax. But we've seen rampant house price growth, hugely distorting the flows of money in society and splitting society into streams of haves and have-nots. Re-distributive taxation is good for social cohesion, especially if it could suppress house price growth. Of course right-wing haves care not a jot for have-nots.

[ayshfm1]

There are few new policies in my experience and taxing the rich "until the pips squeaked" has been implemented before. It crashed the economy and ended up with Thatcher being required to sort it out in an manner which the left still complains about. They don't see them being the cause and her being the effect.

Anyway I'm pretty unhappy with the current lot, I voted conservative and got a watered down Labour.

The country has forgotten what the hard left looks like. Starmer isn't the hard left but he doesn't have the power to purge them, Rayner would not be deputy if he did, so I'm pretty confident that once he's done the job of winning the election he'll find himself struggling to contain them (at least I hope so).

The youth in the country have never seen a real socialist Government and they need to feel for themselves just how miserable it really is, then they'll never vote for them again.

My earliest memories are the winter of discontent and the country being run by the trade unions, for their own benefit and a Labour Government powerless do anything other than appease them, fixed me.

[Mike4]

There is something refreshing about a Labour leader praising the accumulation of wealth as a national virtue, with none of that "inequality" snark to go with it.

Curious isn't it? Labour (claim to) support wealth creation while Tories hammer the millions of self employed liKe me with and EXTRA 3% Stamp Duty when we buy a house for our private pension plan so we need not bother the state so much in our dotage. Then they disbar tax relief on the mortgage interest on the loan to buy it so if you get your sums wrong you actually pay out to own it. Then they freeze the tax thresholds so poor working class self employed tradesmen like me pay higher rate tax. And then they batter them with IR35 if they dare to go for a bit of site work for one single customer e.g. Persimmon, or any small local building firm.....

No wonder UKIP I mean Reform are rubbing their hands at such stupidity...

[chrissyr]

If when buying a house your £170k is repaid in full after a decade, you've had free accommodation over that time. Pity the poor renter who's paid out £100k with nothing to show for it. Why shouldn't you pay £10k in tax.

Of course if house prices had risen with inflation, then there was no real gain, so no real justification for a gains based tax. But we've seen rampant house price growth, hugely distorting the flows of money in society and splitting society into streams of haves and have-nots. Re-distributive taxation is good for social cohesion, especially if it could suppress house price growth. Of course right-wing haves care not a jot for have-nots.

So the share assets you buy you want to outrun inflation but property should just match it?
I bought my house in 1993 for £60k it is now worth £500k to £600k.
If I bought £60k of ftse then and it increased 7.5% (seems to be the average) pa so double every 10 years -1993 £60k, 2003 £120k, 2013 £240k and 2023 £480k. With those shares I didn't have to pay maintenence, council tax, mortgage payments, insurance, etc etc. (all calcs back of fag package ). But as you say all rent free.
Is that rampant? (other examples may be different but that is mine)
When we bought our joint wages were about £15k pa so mortgage multiplier of 4. Now for that house we need £125k to £150k and that is what the issue is - no wage growth.

[Gerry557]

If when buying a house your £170k is repaid in full after a decade, you've had free accommodation over that time. Pity the poor renter who's paid out £100k with nothing to show for it. Why shouldn't you pay £10k in tax.

Of course if house prices had risen with inflation, then there was no real gain, so no real justification for a gains based tax. But we've seen rampant house price growth, hugely distorting the flows of money in society and splitting society into streams of haves and have-nots. Re-distributive taxation is good for social cohesion, especially if it could suppress house price growth. Of course right-wing haves care not a jot for have-nots.

The Renter gets a roof over their head without having to supply capital. They dont have the worry of having to fix the roof and have the flexibility to move a lot more easily than a home owner. Should they suffer a downturn they can choose to stop renting temporarily the home owner doesnt have that option without much more costs.

Id love a free accommodation mortgage! The trouble is the offset, older couples with 4 bed houses cant afford to downsize so less for younger families with kids. Still if they cant afford to downsize we can get them with IHT or Care fees.

[Gerry557]

Try this one - https://www.youtube.com/watch?v=z8bt95a5TS4

I find he has the right idea on what’s been happening and what needs to change. Hoping to get reading his book.

So he wants to tax "massively" those with more than £10m to reduce "our" taxes.

Pity he didn't specify how many of these 10m people there are, how much this would raise and how much less the rest of us would pay. It opens up other questions too like how would taxes be lowered to cover all those people. I suppose me with £9.9m will get a tax reduction, well until I go over.

So a tax reduction to spend on wine women and song, I'm in.

Apparently there has been a fall in both Billionaires and Millionaires in the UK. It didnt say why, are they poorer or have they left.

[Lootman]

So he wants to tax "massively" those with more than £10m to reduce "our" taxes.

Pity he didn't specify how many of these 10m people there are, how much this would raise and how much less the rest of us would pay. It opens up other questions too like how would taxes be lowered to cover all those people. I suppose me with £9.9m will get a tax reduction, well until I go over.

So a tax reduction to spend on wine women and song, I'm in.

Apparently there has been a fall in both Billionaires and Millionaires in the UK. It didnt say why, are they poorer or have they left.

Some will have left because of the plan to tax non-doms. Some will have left ahead of a Labour government. A good number probably leave all the time anyway.

And didn't a lot of the Russian billionaires leave when we tried to sanction them over Ukraine?

Anyone with a net worth of more than a few million would probably benefit from being tax-resident somewhere other than the UK, given that all parties are claiming that taxes will have to keep going up. And if you are not going to tax "working people" then that really only leaves the rich.

And for Labour the definition of "rich" may start at a surprisingly low number. I recall one of those annoying wealth tax advocates at Warwick suggesting it could start as low as 500K. I suspect that many Lemons have homes, pensions and ISAs all worth more than that.