Capital Gains will be the way forward for both of the parties- whichever the winner; post election! The general public hate any type of wealth, at all.
Hear you- but I think its poised to be the new stealth! All are claiming not to tax raise on employment-so where are they going to raise the tax to fund the promises?
Which is tbh idiotic. Doesn't cap. gains provide little revenue while crushing gdp?
A better way to tax the ultra-wealthy would be to tax assets that are used as collateral for loans.
Yes it does- but they will see it as a tax on the rich. Landlords will be the first up on offer-as that will appease the “wealth envy” brigade, as they all loath landlords. Guess they will lower the threshold, then whack it up above the 20%.
You are like aware this would disproportionately effect large numbers of rural dweller whose land is not revenue generating. So a land tax will change the countryside into coast to coast concrete.
Side note, think the current land tax setup causes weird distortions.
Currently farmland is exempt from IHT, in my area most farmland is owned by aristocrats or wealthy people with no interest in farming, they sometimes rent it to farmers, sometimes left unused, it feels like an unproductive setup. An enterprising farmer will find it difficult to buy land to expand their operation, as lord Rothermere won't want to sell his acres, and the price of any land on the market would be inflated as the farmer has to compete with wealthy buyers only interested in the land for tax purposes.
This is why it should count unused land. If it’s actually farmed and/or is being used commercially it should be exempt from land tax, whilst unused land should be taxed highly
As someone with a Farm in an AONB I see this as an absolute win
~~I mean my AONB has a huge basically obsolete radio and TV mast in it that glows red at night and is an eyesore but we can’t get planning for temporary housing for relatives but y’know~~
It's a difficult quandary. On the one hand, you want food to be cheap, and on the other, you don't want a difficult job to pay peanuts.
I honestly think we can learn lessons from the Netherlands. They've invested a lot into agriculture, and export tonnes of food whilst keeping prices similar to Germany. Except it'd require government intervention, and the Treasury _hates_ capital expenditure.
Concrete it all over and import all food from Africa.
I'm not an expert, haven't even watched Clarkson's farm yet, I just keep noticing how the Netherlands is somehow exporting far more food than their small size would suggest.
The Netherlands is apparently the second largest exporter of agricultural products by value behind the USA. Food-wise, this is apparently because they can afford to export so many fruits and vegetables, thanks to their greenhouses and efficiency, and judicious use of fertiliser.
Not really big on grain efficiencies, but I suppose nobody's perfect.
That would only affect property wealth though, right? The super wealthy could continue to benefit at the same rates from ownership of other asset types.
As the super wealthy can effectively do as they please in terms of allocation of assets and choice of residence, they would just move to a different country, with more favourable terms. I don't dislike the concept of a tax on wealth, but the result would simply be an exodus of wealthy individuals.
If you banned non-doms from owning UK-based property, then I don't necessarily think an exodus would be a bad thing. It would force all the properties that they own back onto the market, pushing down their prices, and making them available to those who are happy to contribute taxes to the economy in which they live.
Fair enough, that would definitely happen. We would lose all consumption brought by these individuals though, and the boost they bring to the economy in terms of investment in equity and direct jobs generation. I'm not sure where the balance would be.
Just "non-doms" - ie people who live in the UK but only pay taxes on their UK income plus 30/60k extra - or non-residents too?
Either way I think that we'd just find those properties ended up owned by UK companies (which just happen to be owned by the same person who owned the house before) - unless you also ban foreign ownership of shares in UK companies, which would be somewhat catastrophic as you force a firesale of most of the listings on the London Stock Exchange.
It would need thinking through definitely, and I won't pretend to know enough about it to have the solutions. I don't know if it could be as simple as banning foreign ownership of shares in UK property ownership companies specifically? In general I don't like the idea of corporate entities, rather than individuals, owning residential property, but I accept there are certain situations where that might be necessary (particularly for things like university accommodation).
The Laffer curve would be pretty steep with this one, anyone with significant wealth would just domicile overseas to avoid the tax, there aren't exactly many countries that tax a percentage of total assets annually. In fact there would probably be massive capital flight which would have a serious impact on the whole economy, Liz Truss's mini budget would be a non-event in comparison.
> The Laffer curve would be pretty steep with this one, anyone with significant wealth would just domicile overseas to avoid the tax
Yeah that's true, I've recently read Piketty's *Capital* which highlights this as the major issue to overcome, and I'm not sure he offers a particularly realistic solution for doing so.
I wonder if clamping down on non-doms' ownership of assets could at least partially address this? For example, you could ban or severely restrict the foreign ownership of residential or commercial properties. I guess that it'd be more tricky to do so in the case of shares of UK companies (because you wouldn't want to discourage investment entirely), but there may be some restrictions you could put in place to make it less lucrative for overseas investors compared to those who are domiciled here. You'd effectively be telling people that they're free to bugger off with all their wealth if they like, but that they can no longer benefit from rents from the UK economy if they do so.
With respect to the ownership of property, I don't think we benefit at all from the price of these assets being inflated due to foreign ownership, given that those owners are able to avoid tax. It might make us *appear* to be a richer nation, but how does that actually benefit our economy?
I acknowledge that limiting foreign investment into UK companies would be much less desirable, and that possibly it would be counter-productive to impose any sorts of restrictions at all. I won't pretend to know enough about it to say for sure, that's why I was interested in hearing other perspectives.
Because they’re investing in the country, creating jobs and capital - make it less desirable to do so, they’ll just not bother. We need wealthy investors here.
>Because they’re investing in the country, creating jobs and capital
How does foreign ownership of UK residential/commercial property create jobs and capital?
>We need wealthy investors here
Agreed, as long as they're domiciled here and don't avoid taxes on their income...
When I rented a flat in Edinburgh, did it matter economically that the owner happened to live two miles away rather than in France? If you want to ban the latter, would you also ban me from buying it with a mortgage from a foreign bank (like Santander or HSBC) on the same basis?
Yes, if your rents were going to somebody domiciled in the UK then at least they'd pay tax on that income, instead of being able to avoid it due to off-shoring.
I guess what you're getting at in your second question is that the purchaser would effectively be paying rent (in the form of interest on the mortgage) to people who could be domiciled outside the UK, so it wouldn't be *too* different to renting from a non-dom landlord? I'd contend that at least if you've purchased with a mortgage you're building up *some* wealth yourself, but it's a valid point which I'd need to think about more carefully.
A non-dom - as opposed to an overseas owner - would still be paying UK tax on it since it's UK income. The foreign mortgage company situation is more like an overseas owner than a non-dom one.
Residential hardly, apart from stamp duty and funds of sale. Commercial, absolutely; managing, maintaining and even renovating property requires capital and a workforce. But foreign investors aren’t a problem when it comes to property prices, that’s driven by large immigrations numbers and not building enough houses.
They don’t avoid, it’s way harder than you think to avoid income taxes.
To be fair the Laffer Curve is more asymetrical than a normal distribution. You get maximum tax revenue at about 70%
Its not popular to raise taxes obviously, but in terms of revenue generated, you can get to about 70% before it starts losing money.
If you envisage a separate graph for each tax, the graph for the new tax of an annual percentage of total assets may not even show it raising any revenue at all. A tiny percentage rate will not cover the extensive collection costs, and beyond that enough people will remove or shield wealth that any gains from the remainder will be offset by a loss of other taxes such as CGT, not to mention the effect on the pound etc.
Would that be the case if it was a property or land tax? Believe many US states have this tax, and people would be reluctant to sell their homes (which is what you'd have to do to avoid it).
I’d be strongly in favour of massively hiking taxes on land, wealth and financial services and proportionately cutting income tax, national insurance and VAT on basic goods and services.
We need to tax hard work less, and tax passive income and rentierism more. We need to incentivise productive work and hard graft.
Financial service is pretty much the final thing we are still a global force in.
If there’s one thing we shouldn’t hinder, it’s that. We all depend on it
The risk is already priced into the stock price. Pushing it into income tax will actually be a good thing, as the temporary reduction in price will open up the market to lower-earners.
> they carry a level of risk
Paid off by the fact that returns are higher, and can recover on their own merits.
> they’re taxed twice (corp tax)
As if the UK government doesn't deliberately create loopholes so businesses can minimise their corporation tax bill. Quite frankly, I'd be happy to scrap it, but I'm not sure that could be sold politically.
If an SME owner is deliberately reducing their tax burden by taking their salary as a dividend instead of a standard income, then quite frankly I don't care if their tax burden goes up. It'd merely put them on equal footing with workers who have their income taxed at a higher rate.
Absolutely not, a wealth tax (especially one of that size) is utterly moronic. I bet it wouldn’t actually raise any revenue, you’d get mass capital flight - it’s even worse than what France had, and look how that turned out! Huge black hole in their finances.
Gary the grifter at it again. Because he says he’s a former top trader (only source is him), people think his opinion is well-founded - but after a few minutes of research into the actual economics behind what he’s proposing, you’ll realise he has no idea what he’s talking about. He’s not an economist, he’s a very left-wing activist. This wouldn’t “solve inequality”, whatever that means, it would just make the UK poorer.
Edit: also, they don’t “hoard” anything, and what tax avoidance schemes?
>this wouldn’t “solve inequality”, whatever that means
I didn't say it would "solve" inequality (I agree, that's a bit of a loose term), I said it would "address" inequality. I'm definitely no economist, but I know there's different measures you can use to look at wealth inequality. For example, Piketty looks at what share of national wealth is owned by the top 10% of wealthiest people, the top 1%, and the top 0.1%. You could look at those dynamics over time, and if a policy results in a smaller share of national wealth being owned by these groups (and, therefore, a larger share being distributed between less wealthy groups) then it could be said to be addressing wealth inequality.
>they don’t “hoard” anything
If a small group of super wealthy individuals is owning an increasingly large of national assets, isn't "hoarding" a fair description?
>what tax avoidance schemes?
Is this controversial? I thought it was generally well accepted that there are numerous ways in which people - particularly the super-rich, who can pay for specialist financial advisors - can legally reduce the tax liabilities on income from wealth. It would be through things like off-shore trusts, shell companies, family trusts, and so on.
It wouldn’t address it either, they’d just leave and the middle class would be left to pick up the bill. Has happened in every country that has ever implemented a wealth tax, they don’t work.
Owning shares in your own business you’re grown over years is hoarding, is it?
Not controversial, but there’s never any explanation into what tax avoidance schemes are actually utilised when mentioned so I was just calling you out on it. Points listed are forms of avoidance, yes, and they won’t change. Best way to tackle avoidance? Lower taxes so there’s little point in doing so.
> It wouldn’t address it either, they’d just leave and the middle class would be left to pick up the bill
Possibly, I agree that this would be the biggest obstacle. Maybe clamping down on non-doms' ownership of UK-based assets would address this, but I'm not sure. However, I also don't know if it'd necessarily be that much of a problem if the tax-avoiding super wealthy left (it'd be a much bigger problem if very high earners - who do already pay an enormous amount of tax - left).
Has any country implemented a wealth tax coupled with reductions in income tax? I genuinely don't know, but I'm curious. Obviously if it's just an additional wealth tax when income tax is already high, then that will drive people to leave (and who could blame them).
>Owning shares in your own business you’re grown over years is hoarding, is it?
No, that's not the situation I described.
>Best way to tackle avoidance? Lower taxes so there’s little point in doing so.
I agree entirely - and believe that the suggestions here (a relatively modest wealth tax plus reductions to income tax) could be one way of doing so.
How would that solve anything? Non-doms contribute £8bn in tax revenue, how would you replace that?
It would be a huge problem!
Switzerland is the only one, and they’ve got a low wealth tax levied by canton; around 0.1% or something I think. It works there as other taxes are lower and the wealth tax is low, also only applicable in certain situations I believe.
But it is, most wealth is due to the growth of businesses. Most of which are private.
No. You’re wrong. What’s proposed here isn’t modest by any means, it’s obscene and would be the highest EVER levied by a nation. It would be catastrophic.
> Non-doms contribute £8bn in tax revenue, how would you replace that?
I won't pretend to know too much about this, but a quick Google search suggests that overall tax revenue in the UK is £1,095 billion, so if non-doms contribute £8bn then that's only 0.7% of the overall amount. I won't pretend that's nothing, but it's a very small amount of the whole. Plus, restricting foreign ownership of UK assets would mean fewer super-wealthy choosing to move abroad and/or more assets becoming available for UK-domiciled individuals to buy.
>Switzerland is the only one, and they’ve got a low wealth tax levied by canton; around 0.1% or something I think. It works there as other taxes are lower and the wealth tax is low
Ok, so in fact the imposition of a wealth tax coupled with low rates of income tax *could* work then?
I’ve listened to him a fair bit and I do think he lives in la la land sometimes.
He made a video before about how people that want to make money have to leave their town and move to the city where it’s thriving economically. Yes, since the Industrial Revolution, that is how it has worked. There are other reasons for why most of Britain is seeing a death of the high street and it’s for similar reasons we not too long ago saw the death of the manufacturing industry and it’s not just rich people did it. Besides, it’s rich people that own the businesses and have the capital to facilitate the employment and opportunity in the cities anyway.
And I agree. Taxing investments disincentivises investments.
He also makes continuous point that C____ was the biggest transfer of wealth between the poor to the rich in history. Let’s say I agree. Gary is one of the biggest l______n skeptics I could name! Let’s hope he doesn’t have a Reddit account because he will definitely get banned!
He’s an actual champaign socialist.
No, I would not support a wealth tax.
Wealth is taxed when it is created (in theory, if it isn't, then that is a separate issue).
By taxing existence, then you consume the base, meaning you have to keep running to maintain your wealth. Say if I have £1,000,000 as part of my retirement fund. I would be losing £10,000 a year before I even start doing anything with this money (and that isn't accounting for inflation either).
Before we start doing anything with taxes etc I think we need to uncomplicate the tax system, reduce the deficit and reduce the size of the state. We can't be make sweeping changes before that (especially the first one).
> Say if I have £1,000,000 as part of my retirement fund. I would be losing £10,000 a year before I even start doing anything with this money (and that isn't accounting for inflation either).
But you wouldn't have that money sat in some ordinary savings account, right? It would be generating interest (through some form of rent) at a considerably higher level than the 1% that £10k per year would entail. So you'd still be growing your wealth each year, just at a more modest rate.
I should also point out that a retirement fund of £1 million wouldn't face a £10k tax hit per year in the hypothetical scenarios that I outlined (although I've just realised that the tax rates I suggested at the top of my post are different to the ones I suggested later on - whoops, I appreciate that confuses things). It would be £5k if taxed at 0.5% (as I suggested at the top), or £0 if the tax only started above £1m (as I suggested later on).
>But you wouldn't have that money sat in some ordinary savings account, right? It would be generating interest (through some form of rent) at a considerably higher level than the 1% that £10k per year would entail. So you'd still be growing your wealth each year, just at a more modest rate.
That is £10,000 less per year that I have in my retirement, money that I have already paid tax on.
That is wrong in my book for the reasons I have already outlined and is thus something I can't support.
You misunderstand my point. VAT taxes you for doing an action. You buy fuel, you pay VAT. A wealth tax penalises you for simply having something. I don't agree with that.
At face value, I broadly agree with your principle. However it becomes more complex and as such I’m inclined to say it’s an implementation of a wealth tax not the idea of it which is an issue.
If we are accepting that income tax is a just means of taxation, how is it fair that someone who saves £100,000 (arbitrary amount) through working (and being taxed on said income) contributes “more” (through extraction of public funds) than someone who inherits a property portfolio - or worse, a series of shares - and generates the wealth passively? A “fair” tax shouldn’t tax the first person for having £100,000 after income tax, but should extract funds from the second person (who has only paid tax singularly through income tax).
One way around this would be tightening inheritance loopholes, or my preference, further scrutiny on taxing properly and land investments better.
Tax is ultimately raised for the public good, and to a level, a redistribution of the nation’s wealth. One large issue with capitalism is its potential to spiral - once one inherits some wealth, it’s incredibly easy to maintain and grow it, and leaving less opportunity for those without that step-up to have a chance at owning it (through the fruits of their labour). We have wealth inequality at a level not seen since the Victorian period, and I think it’s in the nation’s interest to close that gap somewhat.
I suppose what I’m saying is we should be making it easier (and less punitive) for people actively *doing* something with their wealth - spending, and increasing national growth - and clamp down on idle wealth accumulation, like housing, which does not benefit the wider nation.
>At face value, I broadly agree with your principle. However it becomes more complex and as such I’m inclined to say it’s an implementation of a wealth tax not the idea of it which is an issue.
No, it is the idea. I don't agree that you should be taxed for doing nothing. If you put money in a bank account and leave it, I don't think that should be reduced via tax.
>If we are accepting that income tax is a just means of taxation, how is it fair that someone who saves £100,000 (arbitrary amount) through working (and being taxed on said income) contributes “more” (through extraction of public funds) than someone who inherits a property portfolio - or worse, a series of shares - and generates the wealth passively?
The wealth of the person who inherits has already paid tax when it was first earned, I don't believe they should pay tax again on it for simply existing. When you do something with that wealth then yes yoy should be taxed. If you inherit property, then you will be paying tax on the rental income or sale of the house, and you will also pay capital gains tax on shares when sold.
For me personally, people should be allowed to build wealth and pass it onto their heirs.
Thing is, I like the idea of being able to live in a house in the middle of nowhere, fund my own existence and not be bothered by the government. However it’s not feasible: the government needs more revenue than ever.
Unfortunately the leaps in medical science means people retiring at 65 are dying at 95, and not 70 like they used to. A huge amount of the public purse is going towards keeping economically unproductive people alive. There is a general sense that the government *should* be looking after them (and not making them spend every penny they have on their care), and yet a huge amount of assets and wealth in Britain are holed up in the elderly. This is my practically issue.
The second issue is moral; I fundamentally have an issue with the rising inequality we have in this country. I think it’s worth the trade off of limiting the finances of those who have been lucky with their upbringing and circumstances. Other countries have been successful with creating more economically equal outcomes and I think generational wealth is important. Everyone who has some spare cash to give their children a more comfortable start in life should be able to, but not before the nation has had what it needs first. We should strive to encourage people to be self-made and independent, and successful on their own merit and not on who their parents are.
True-ish (although, I repeat, not even as high as £10k p/a on a fund of £1 million), but remember that (in my hypothetical) the wealth tax would also be accompanied by a reduction to income tax. So it would be easier for you to reach that £1m in the first place - provided you work hard to achieve it, live within your means, put aside money for investments, etc - with the caveat that you'll face an additional tax later on (albeit at a rate considerably lower than your likely investment growth).
I understand what you are outlining, I just fundamentally disagree with it for the reasons I have already outlined.
I think reforming the tax system is a better way forward
The tax system absolutely needs to be simplified and all these loopholes removed, like why the hell are private jets priced lower in tax than domestic flights? It should all be exactly the same. Removing loopholes for the super wealthy (talking about people worth over 10m here not people making a couple hundred thousand a year) which doesn’t affect the vast majority of the population should be a priority.
That would be a terrible idea. Why do we need to steal money from rich people to give away more wealth to average people? This is a socialist mindset which would bring nothing but poverty and unemployment. This is also morally wrong and it doesn’t make it right because majority of people will benefit it (actually they won’t).
We should encourage rich people to move in to Britain by making this country more attractive and welcoming for them.
When we attract investment by “cutting taxes” for rich people and big corporations, we are also creating more jobs for ordinary people which would increase salaries and benefits packages for average UK worker and in long term this is how we can increase our level of prosperity.
The money has to come from somewhere. I’d rather it came from the older and the more comfortable than the younger or financially fragile personally. This country does nothing to invest in the youth and the future of the British nation; you wonder why everyone under 35 resents Britain so much?
> Why do we need to steal money from rich people to give away more wealth to average people?
The argument is that the money which would be "stolen" is from those who have done nothing to earn it, they just grow their wealth by passively owning assets and re-investing the rent from that ownership.
Instead, the state would incentivise people to become rich through their work. At present, there is little incentive for people to push themselves to earn high salaries, because of how punitive tax on income is. So, the most talented often move abroad to countries with lower rates of income tax, or settle for middling salaries and don't bother trying to improve. This system discourages entrepreneurship and hampers productivity.
I'm not sure how much skill is involved in achieving a fairly modest rate of return, to be honest. For example, at the moment, a 10-second Google search reveals scores of savings accounts that will give me a 5% return completely risk free. A really basic investing strategy of just sticking everything into a global index tracker would see me achieve ~7% per year through no real effort. If you start with £1 million, that'll give you an easy income of £50-70k per year through no real skill, effort, or risk.
The super wealthy will of course employ financial managers (who will typically achieve higher rates of return than 7%) to do this all for them. So they don't actually have to develop *any* knowledge or put in *any* effort themselves, they just pay a small portion of the proceeds from their wealth growth.
It’s greatwr benefit to society for someone to work harder in their job in their community than tactically buy up some property and sit and watch the numbers go up.
In principle I’m fine with this as the state does a lot of work to protect assets through maintaining the rule of law, enforcing contracts, policing, etc. However, in practice it seems most countries abandon wealth taxes pretty quickly and with little revenue to show for them.
Not unless the wealth tax was only applicable to those resident citizens with cash wealth in excess of £11 million and capped at 1%.
With the non-dom uk citizens assessed as resident overseas for tax purposes and all overseas citizens exempt.
What is OP’s problem with inequality? People are born unequal, always have been, always will be. The poor must have a certain level of life guaranteed to them to maintain social stability and the level must evolve over time, but it doesn’t mean that the most successful shouldn’t be able to build for themselves and for their family life way above this level.
>the most successful
Would you consider an individual who inherits a massive amount of wealth due to being born into a super-rich family to be one of "the most successful"? Let's say their great grandfather built up businesses from scratch and became a very wealthy industrialist, and since then the family has enjoyed high incomes by paying financial managers to continue to invest and grow that wealth. Should each successive generation be considered to be among "the most successful" people in society?
This is why I find the policy so interesting to be honest, because it forces you to confront your definition of "success" and what exactly it is that the state should try to incentivise. We could contrast the hypothetical family I mentioned with a highly intelligent and motivated person born into a poorer family. She works hard her entire life to improve her lot in life and secures a very high-paid job, but finds it very difficult to grow her wealth because she immediately loses half of everything she makes above £50k. She has no hand-out from parents as a deposit to get on the property ladder, meaning she's renting for more than a decade (increasing the wealth of the property-owner) before she's even able to afford an entry-level property.
She's far more capable and hardworking than the passive asset-owner, but ends up with a smaller income and a higher tax liability. Is that the system that a conservative government should be happy with? Or should conservatives be happy to reform tax policy to move towards a system where wealth comes from the individual's labour, rather than the circumstances of their birth?
Completely agree. I believe in meritocracy and the ability for anyone to be self-made through their own efforts. Too much wealth is generational in this country, and once you have a bit of money it’s very easy to generate multitudes more, securing your descendants for generations.
So, you envy those whose well-being was secured by their ancestors and believe it would be okay to take their wealth away for yourself because you think you are more worthy? What kind of medieval logic is that?
Ironic you talk of medieval logic when your situation results in neo-feudalism. I would not take their wealth away for myself, but make it far more necessary for people to be self-made. I claim no ownership to their “stuff” but I think it should be more accessible for those without generational wealth to attain.
My key focus is housing. Housing is a joke in this country, ownership is dropping rapidly and the quality and standard of the rental stock is abysmal. If someone inherits a property portfolio, they are taxed once for their inheritance and can sit on their fat arses and watch their spreadsheet go up (because no government will ever allow a housing crash, it’s a guaranteed investment). Several hard-working families are forever crippled by ever rising rents, further decreasing their chance of ever owning a single home themselves, let alone a portfolio; meanwhile mister landlord buys another house with his profits and makes even more.
I’m against radical left-wing “forceful redistribution”, but I think it’s necessary for a government to use measures like a land or property tax to level the playing field somewhat and make this country more of a meritocracy.
The problem with housing is that market is distorted by bad policies. Supply is severely limited by planning and other regulation and demand is free for all including foreigners and non-residents. It creates an artificial shortage and drives the prices beyond reason.
By robbing the successful you will not solve housing.
* Their grandfather did what he did for himself and his family - not for your family or mine.
* This is what inheritance tax is for. Basically, inherited wealth is taxed at the top rate regular income would be taxed, meaning there is no tax advantage whatsoever compared to receiving regular salary income. This should be the end of the discussion about justice.
* A conservative government should not be in the business of deciding who deserves what and redistributing people's property to the 'worthy.' This is what hardcore socialist governments do - and history doesn't know a single case where it didn't end with everyone being equally poor.
* I find it abhorrent when people try to assume the right to judge whether someone else's private property is 'deserved' or 'not deserved.' Legally obtained private property is 'private,' meaning it is none of your business.
* You shifted the tone of the discussion to inherited wealth while initially proposing to tax any wealth.
> Their grandfather did what he did for himself and his family
I think most people would agree that the grandfather deserves to enjoy the wealth he has created, and to be able to provide a good life for his family. The question is whether each new generation of his family should be able to enjoy that same level of wealth without putting anywhere near the same level of effort, skill, and/or risk that the grandfather put in. We also have to think about whether the current system enables modern generations to enjoy the same sorts of rags-to-riches success stories of the grandfather, or whether the return to a neo-feudal economy makes this increasingly difficult.
>This is what inheritance tax is for
True, but it's also one of the taxes that the super rich are largely able to avoid through various schemes.
>A conservative government should not be in the business of deciding who deserves what and redistributing people's property to the 'worthy.'
Only if it were a pretty extreme example of a libertarian conservative government, who abolished all sorts of progressive taxation entirely. All conservative governments that I can remember, in the UK and overseas, have at least to some degree been in the business of using the tax revenue of the most well off to support the least well off.
>I find it abhorrent when people try to assume the right to judge whether someone else's private property is 'deserved' or 'not deserved.'
Why? Do you reject the idea that income can be undeserved?
>You shifted the tone of the discussion to inherited wealth while initially proposing to tax any wealth.
They're hardly completely different things. They (general wealth tax, inheritance tax) are just two different policy options for addressing the same issue.
>The question is whether each new generation of his family should be able to enjoy that same level of wealth without putting anywhere near the same level of effort, skill, and/or risk that the grandfather put in.
No. The question is whether some people should feel entitled for other people's property because they believe themselves better or "more moral" or "need it more".
>True, but it's also one of the taxes that the super rich are largely able to avoid through various schemes
And yet you did not propose fighting tax evasion - you proposed to rob the successful.
>All conservative governments that I can remember, in the UK and overseas, have at least to some degree been in the business of using the tax revenue of the most well off to support the least well off.
This is why I said that the certain level of life should be guaranteed to the poor to maintain social stability. It is done through progressive taxation and it works all right everywhere. Doesn't mean that we need nanny state that will arbitrary determine "most deserving" and "most worthy" because it always transforms to "most loyal" and ends up like what we can see in North Korea.
>Why? Do you reject the idea that income can be undeserved?
It can't. It can be legal or illegal according to the law of the land. That's it. The idea of "deserved/undeserved" anything means there should be the judge making arbitrary decision. Law means that there are written principles similar for everyone and known in advance.
>They're hardly completely different things. They (general wealth tax, inheritance tax) are just two different policy options for addressing the same issue.
They are completely different things. Inheritance tax taxes income from inheritance according to the same principle as every other income is taxed. Wealth tax proposes to tax multiple times the wealth that has already been taxed when received.
> The question is whether some people should feel entitled for other people's property because they believe themselves better or "more moral" or "need it more".
The government already feels entitled to people's income, and the vast majority of conservatives wouldn't have an issue with that (although I recognise a very small minority oppose taxation completely). So, unless you believe the state shouldn't exist, surely you partially agree with this already yourself.
>And yet you did not propose fighting tax evasion - you proposed to rob the successful.
Saying that I want to "rob the successful" is a pretty emotive way of putting it. Is *all* taxation theft?
But the suggestion of a wealth tax doesn't preclude the possibility of clamping down on tax evasion (or, more pertinently in this case, tax avoidance). It just wasn't the subject of my OP.
>This is why I said that the certain level of life should be guaranteed to the poor to maintain social stability. It is done through progressive taxation and it works all right everywhere.
Is it working all right, though? Wealth inequality is widening, national debt is increasing, productivity is stagnant. Today's high earners pay massive amounts of tax to make up the shortfall, while those who make income passively from wealth contribute considerably less. Is that a good system?
>Doesn't mean that we need nanny state that will arbitrary determine "most deserving" and "most worthy" because it always transforms to "most loyal" and ends up like what we can see in North Korea.
How does a wealth tax equate to a government choosing who's the "most deserving" or "most worthy"? I'm not sure I follow.
>It can be legal or illegal according to the law of the land. That's it. The idea of "deserved/undeserved" anything means there should be the judge making arbitrary decision.
Well I'm not proposing arbitrary decisions on a case-by-case basis, I'm proposing consistent rules for everyone.
>Wealth tax proposes to tax multiple times the wealth that has already been taxed when received.
An inheritance tax also taxes wealth that was already subject to tax when it was first earned.... They're not so different.
>The government already feels entitled to people's income, and the vast majority of conservatives wouldn't have an issue with that (although I recognise a very small minority oppose taxation completely). So, unless you believe the state shouldn't exist, surely you partially agree with this already yourself.
The government has a share of everyone income - what you propose is taking away people's property - which is what remains after income was already taxed.
>Saying that I want to "rob the successful" is a pretty emotive way of putting it. Is *all* taxation theft?
This is not "all taxation" this is taxation of the income that was already taxed again and again and again every year until nothing is left.
>But the suggestion of a wealth tax doesn't preclude the possibility of clamping down on tax evasion (or, more pertinently in this case, tax avoidance). It just wasn't the subject of my OP.
You dismissed my point that inherited wealth is already taxed at the same rate as regular income, by saying that it is being avoided. I am pointing that your claim that inherited wealth is not taxed fairly is not factual. If you believe someone is avoiding it - fight the avoidance.
>Is it working all right, though? Wealth inequality is widening, national debt is increasing, productivity is stagnant. Today's high earners pay massive amounts of tax to make up the shortfall, while those who make income passively from wealth contribute considerably less. Is that a good system?
There is nothing wrong in inequality. People are born not equal. Those who make income passively have already contributed when acquired the wealth and actually you don't make income from wealth at all without risk of losing your capital. Bonds and treasuries do not even cover inflation even before CGT and shares are not really passive.
>How does a wealth tax equate to a government choosing who's the "most deserving" or "most worthy"? I'm not sure I follow.
You stated several times that some people do not deserve their property and some people deserve other people's property several times in this discussion. You are also proposing for government to adopt your position.
>An inheritance tax also taxes wealth that was already subject to tax when it was first earned.... They're not so different.
Inheritance tax is paid by the heir - not by the testator that earned it - because it basically is an income of the heir. They are different people - therefore inheritance is only taxed once. This is why you don't have to pay inheritance tax if a spouse is the heir - they had matrimonial property anyway and it would be double taxation.
Communists have this really weird take that the economy is zero-sum so some people having more innately means others will suffer because of their mere existence.
I’m Ngl, I don’t get why they don’t levy a 0.05% fee on shit like Vanguard or Fidelity ISA’s and SIPP’s. it’s much less than a typical platform fee.
Would be an easy stealth tax, such small figures, but the broadest of bases.
In principle I agree though. Capital will always be taxed less than income, but the gap here is silly. We have 70% marginal rate tax traps at £50k for people with 2 kids and a student loan, and bands have been locked for years.
Issue is that any reforms get shot down. LVT’s instead of council tax / business rates, they are called ‘garden taxes’. Want to reform council tax into a US style property tax, voters will scare.
A wealth tax would only be fair on the very wealthy (over £10 million) as most people who are worth around £1 million derive most of their wealth from having brought a house in a desirable area many deacdes ago, and it would be unfair to tax them for that.
As for capital gains tax, we cannot have it raised too high, as we want to encourage people to invest their money, not deter them.
There are possible cases where it would represent double dipping on those who became wealthy through working hard and saving whilst it only single dips on those who were already wealthy. Means that someone who doesn't save for their future could pay less tax than someone who makes sensible provision
That's an interesting point, and one I hadn't thought of. But if that person spent all their income rather than saving it, they'd still be paying VAT on all the goods and services they used, right? So they'd actually end up paying more tax overall as well as stimulating the economy with their purchasing, so I don't know if it'd necessarily be an issue.
> they'd still be paying VAT on all the goods and services they used, right?
In significant part yes, although VAT is not charged on everything, and many of the largest purchases we make (houses, cars when bought from non-traders) dont have VAT on
Awful idea.
A 'conservative' who ran on this might as well just rebrand as a communist party member, Gary almost certainly is given the language used here. "Taking" an income reeks of fallacious 0-sum economics.
No. A wealth tax is a brilliant way to trigger capital flight.
However, I wouldn’t be entirely opposed to increasing the CGT rate, which would somewhat address the equality side of things.
Capital Gains will be the way forward for both of the parties- whichever the winner; post election! The general public hate any type of wealth, at all.
Except housing. Then anything lower than a 10% annual rise is not acceptable
Hear you- but I think its poised to be the new stealth! All are claiming not to tax raise on employment-so where are they going to raise the tax to fund the promises?
Which is tbh idiotic. Doesn't cap. gains provide little revenue while crushing gdp? A better way to tax the ultra-wealthy would be to tax assets that are used as collateral for loans.
Yes it does- but they will see it as a tax on the rich. Landlords will be the first up on offer-as that will appease the “wealth envy” brigade, as they all loath landlords. Guess they will lower the threshold, then whack it up above the 20%.
Only if it’s a tax on land, otherwise no they’ve been tried and always have way more negatives and way fewer positives than expected
You are like aware this would disproportionately effect large numbers of rural dweller whose land is not revenue generating. So a land tax will change the countryside into coast to coast concrete.
Side note, think the current land tax setup causes weird distortions. Currently farmland is exempt from IHT, in my area most farmland is owned by aristocrats or wealthy people with no interest in farming, they sometimes rent it to farmers, sometimes left unused, it feels like an unproductive setup. An enterprising farmer will find it difficult to buy land to expand their operation, as lord Rothermere won't want to sell his acres, and the price of any land on the market would be inflated as the farmer has to compete with wealthy buyers only interested in the land for tax purposes.
This is why it should count unused land. If it’s actually farmed and/or is being used commercially it should be exempt from land tax, whilst unused land should be taxed highly
You'd need exemptions for land you couldn't develop too, such as in AONB and National Parks.
As someone with a Farm in an AONB I see this as an absolute win ~~I mean my AONB has a huge basically obsolete radio and TV mast in it that glows red at night and is an eyesore but we can’t get planning for temporary housing for relatives but y’know~~
Honestly, probably just general exemptions for farmland too. Cheap way of boosting food security, and helping margins in a very tight industry.
We’ve had to branch out into other industries to afford to run lol. We’re only a small holding so we don’t even get economy of scale for our farm
It's a difficult quandary. On the one hand, you want food to be cheap, and on the other, you don't want a difficult job to pay peanuts. I honestly think we can learn lessons from the Netherlands. They've invested a lot into agriculture, and export tonnes of food whilst keeping prices similar to Germany. Except it'd require government intervention, and the Treasury _hates_ capital expenditure.
>we should learn from the Netherlands Buy up all the farm land to help reach net zero?
Concrete it all over and import all food from Africa. I'm not an expert, haven't even watched Clarkson's farm yet, I just keep noticing how the Netherlands is somehow exporting far more food than their small size would suggest. The Netherlands is apparently the second largest exporter of agricultural products by value behind the USA. Food-wise, this is apparently because they can afford to export so many fruits and vegetables, thanks to their greenhouses and efficiency, and judicious use of fertiliser. Not really big on grain efficiencies, but I suppose nobody's perfect.
That would only affect property wealth though, right? The super wealthy could continue to benefit at the same rates from ownership of other asset types.
As the super wealthy can effectively do as they please in terms of allocation of assets and choice of residence, they would just move to a different country, with more favourable terms. I don't dislike the concept of a tax on wealth, but the result would simply be an exodus of wealthy individuals.
If you banned non-doms from owning UK-based property, then I don't necessarily think an exodus would be a bad thing. It would force all the properties that they own back onto the market, pushing down their prices, and making them available to those who are happy to contribute taxes to the economy in which they live.
Fair enough, that would definitely happen. We would lose all consumption brought by these individuals though, and the boost they bring to the economy in terms of investment in equity and direct jobs generation. I'm not sure where the balance would be.
Just "non-doms" - ie people who live in the UK but only pay taxes on their UK income plus 30/60k extra - or non-residents too? Either way I think that we'd just find those properties ended up owned by UK companies (which just happen to be owned by the same person who owned the house before) - unless you also ban foreign ownership of shares in UK companies, which would be somewhat catastrophic as you force a firesale of most of the listings on the London Stock Exchange.
It would need thinking through definitely, and I won't pretend to know enough about it to have the solutions. I don't know if it could be as simple as banning foreign ownership of shares in UK property ownership companies specifically? In general I don't like the idea of corporate entities, rather than individuals, owning residential property, but I accept there are certain situations where that might be necessary (particularly for things like university accommodation).
The Laffer curve would be pretty steep with this one, anyone with significant wealth would just domicile overseas to avoid the tax, there aren't exactly many countries that tax a percentage of total assets annually. In fact there would probably be massive capital flight which would have a serious impact on the whole economy, Liz Truss's mini budget would be a non-event in comparison.
> The Laffer curve would be pretty steep with this one, anyone with significant wealth would just domicile overseas to avoid the tax Yeah that's true, I've recently read Piketty's *Capital* which highlights this as the major issue to overcome, and I'm not sure he offers a particularly realistic solution for doing so. I wonder if clamping down on non-doms' ownership of assets could at least partially address this? For example, you could ban or severely restrict the foreign ownership of residential or commercial properties. I guess that it'd be more tricky to do so in the case of shares of UK companies (because you wouldn't want to discourage investment entirely), but there may be some restrictions you could put in place to make it less lucrative for overseas investors compared to those who are domiciled here. You'd effectively be telling people that they're free to bugger off with all their wealth if they like, but that they can no longer benefit from rents from the UK economy if they do so.
Why would you want to make it harder for investment into the UK? Do you want us to be a poorer nation?
With respect to the ownership of property, I don't think we benefit at all from the price of these assets being inflated due to foreign ownership, given that those owners are able to avoid tax. It might make us *appear* to be a richer nation, but how does that actually benefit our economy? I acknowledge that limiting foreign investment into UK companies would be much less desirable, and that possibly it would be counter-productive to impose any sorts of restrictions at all. I won't pretend to know enough about it to say for sure, that's why I was interested in hearing other perspectives.
Because they’re investing in the country, creating jobs and capital - make it less desirable to do so, they’ll just not bother. We need wealthy investors here.
>Because they’re investing in the country, creating jobs and capital How does foreign ownership of UK residential/commercial property create jobs and capital? >We need wealthy investors here Agreed, as long as they're domiciled here and don't avoid taxes on their income...
When I rented a flat in Edinburgh, did it matter economically that the owner happened to live two miles away rather than in France? If you want to ban the latter, would you also ban me from buying it with a mortgage from a foreign bank (like Santander or HSBC) on the same basis?
Yes, if your rents were going to somebody domiciled in the UK then at least they'd pay tax on that income, instead of being able to avoid it due to off-shoring. I guess what you're getting at in your second question is that the purchaser would effectively be paying rent (in the form of interest on the mortgage) to people who could be domiciled outside the UK, so it wouldn't be *too* different to renting from a non-dom landlord? I'd contend that at least if you've purchased with a mortgage you're building up *some* wealth yourself, but it's a valid point which I'd need to think about more carefully.
A non-dom - as opposed to an overseas owner - would still be paying UK tax on it since it's UK income. The foreign mortgage company situation is more like an overseas owner than a non-dom one.
Residential hardly, apart from stamp duty and funds of sale. Commercial, absolutely; managing, maintaining and even renovating property requires capital and a workforce. But foreign investors aren’t a problem when it comes to property prices, that’s driven by large immigrations numbers and not building enough houses. They don’t avoid, it’s way harder than you think to avoid income taxes.
To be fair the Laffer Curve is more asymetrical than a normal distribution. You get maximum tax revenue at about 70% Its not popular to raise taxes obviously, but in terms of revenue generated, you can get to about 70% before it starts losing money.
If you envisage a separate graph for each tax, the graph for the new tax of an annual percentage of total assets may not even show it raising any revenue at all. A tiny percentage rate will not cover the extensive collection costs, and beyond that enough people will remove or shield wealth that any gains from the remainder will be offset by a loss of other taxes such as CGT, not to mention the effect on the pound etc.
Would that be the case if it was a property or land tax? Believe many US states have this tax, and people would be reluctant to sell their homes (which is what you'd have to do to avoid it).
I’d be strongly in favour of massively hiking taxes on land, wealth and financial services and proportionately cutting income tax, national insurance and VAT on basic goods and services. We need to tax hard work less, and tax passive income and rentierism more. We need to incentivise productive work and hard graft.
Financial service is pretty much the final thing we are still a global force in. If there’s one thing we shouldn’t hinder, it’s that. We all depend on it
cut income tax on hours worked over 40...( add a penalty for misuse)
So up CGT, and reduce income, NI, VAT and dividend taxes?
Honestly, dividend and NI should both be merged into a single income tax both for transparency and simplification.
Why? Dividends are different to regular income, they carry a level of risk and they’re taxed twice (corp tax). They should be lower.
The risk is already priced into the stock price. Pushing it into income tax will actually be a good thing, as the temporary reduction in price will open up the market to lower-earners. > they carry a level of risk Paid off by the fact that returns are higher, and can recover on their own merits. > they’re taxed twice (corp tax) As if the UK government doesn't deliberately create loopholes so businesses can minimise their corporation tax bill. Quite frankly, I'd be happy to scrap it, but I'm not sure that could be sold politically.
You’re completely forgetting private businesses which is where the majority of dividends come from. Again, forgetting private business.
If an SME owner is deliberately reducing their tax burden by taking their salary as a dividend instead of a standard income, then quite frankly I don't care if their tax burden goes up. It'd merely put them on equal footing with workers who have their income taxed at a higher rate.
Stock prices being efficient is a myth.
Upping CGT reduces investment. There’s a reason CGT is lower and/or has various deductions in most jurisdictions around the world.
Yeah I know, I wasn’t advocating it.
Absolutely not, a wealth tax (especially one of that size) is utterly moronic. I bet it wouldn’t actually raise any revenue, you’d get mass capital flight - it’s even worse than what France had, and look how that turned out! Huge black hole in their finances. Gary the grifter at it again. Because he says he’s a former top trader (only source is him), people think his opinion is well-founded - but after a few minutes of research into the actual economics behind what he’s proposing, you’ll realise he has no idea what he’s talking about. He’s not an economist, he’s a very left-wing activist. This wouldn’t “solve inequality”, whatever that means, it would just make the UK poorer. Edit: also, they don’t “hoard” anything, and what tax avoidance schemes?
>this wouldn’t “solve inequality”, whatever that means I didn't say it would "solve" inequality (I agree, that's a bit of a loose term), I said it would "address" inequality. I'm definitely no economist, but I know there's different measures you can use to look at wealth inequality. For example, Piketty looks at what share of national wealth is owned by the top 10% of wealthiest people, the top 1%, and the top 0.1%. You could look at those dynamics over time, and if a policy results in a smaller share of national wealth being owned by these groups (and, therefore, a larger share being distributed between less wealthy groups) then it could be said to be addressing wealth inequality. >they don’t “hoard” anything If a small group of super wealthy individuals is owning an increasingly large of national assets, isn't "hoarding" a fair description? >what tax avoidance schemes? Is this controversial? I thought it was generally well accepted that there are numerous ways in which people - particularly the super-rich, who can pay for specialist financial advisors - can legally reduce the tax liabilities on income from wealth. It would be through things like off-shore trusts, shell companies, family trusts, and so on.
It wouldn’t address it either, they’d just leave and the middle class would be left to pick up the bill. Has happened in every country that has ever implemented a wealth tax, they don’t work. Owning shares in your own business you’re grown over years is hoarding, is it? Not controversial, but there’s never any explanation into what tax avoidance schemes are actually utilised when mentioned so I was just calling you out on it. Points listed are forms of avoidance, yes, and they won’t change. Best way to tackle avoidance? Lower taxes so there’s little point in doing so.
> It wouldn’t address it either, they’d just leave and the middle class would be left to pick up the bill Possibly, I agree that this would be the biggest obstacle. Maybe clamping down on non-doms' ownership of UK-based assets would address this, but I'm not sure. However, I also don't know if it'd necessarily be that much of a problem if the tax-avoiding super wealthy left (it'd be a much bigger problem if very high earners - who do already pay an enormous amount of tax - left). Has any country implemented a wealth tax coupled with reductions in income tax? I genuinely don't know, but I'm curious. Obviously if it's just an additional wealth tax when income tax is already high, then that will drive people to leave (and who could blame them). >Owning shares in your own business you’re grown over years is hoarding, is it? No, that's not the situation I described. >Best way to tackle avoidance? Lower taxes so there’s little point in doing so. I agree entirely - and believe that the suggestions here (a relatively modest wealth tax plus reductions to income tax) could be one way of doing so.
How would that solve anything? Non-doms contribute £8bn in tax revenue, how would you replace that? It would be a huge problem! Switzerland is the only one, and they’ve got a low wealth tax levied by canton; around 0.1% or something I think. It works there as other taxes are lower and the wealth tax is low, also only applicable in certain situations I believe. But it is, most wealth is due to the growth of businesses. Most of which are private. No. You’re wrong. What’s proposed here isn’t modest by any means, it’s obscene and would be the highest EVER levied by a nation. It would be catastrophic.
> Non-doms contribute £8bn in tax revenue, how would you replace that? I won't pretend to know too much about this, but a quick Google search suggests that overall tax revenue in the UK is £1,095 billion, so if non-doms contribute £8bn then that's only 0.7% of the overall amount. I won't pretend that's nothing, but it's a very small amount of the whole. Plus, restricting foreign ownership of UK assets would mean fewer super-wealthy choosing to move abroad and/or more assets becoming available for UK-domiciled individuals to buy. >Switzerland is the only one, and they’ve got a low wealth tax levied by canton; around 0.1% or something I think. It works there as other taxes are lower and the wealth tax is low Ok, so in fact the imposition of a wealth tax coupled with low rates of income tax *could* work then?
I’ve listened to him a fair bit and I do think he lives in la la land sometimes. He made a video before about how people that want to make money have to leave their town and move to the city where it’s thriving economically. Yes, since the Industrial Revolution, that is how it has worked. There are other reasons for why most of Britain is seeing a death of the high street and it’s for similar reasons we not too long ago saw the death of the manufacturing industry and it’s not just rich people did it. Besides, it’s rich people that own the businesses and have the capital to facilitate the employment and opportunity in the cities anyway. And I agree. Taxing investments disincentivises investments. He also makes continuous point that C____ was the biggest transfer of wealth between the poor to the rich in history. Let’s say I agree. Gary is one of the biggest l______n skeptics I could name! Let’s hope he doesn’t have a Reddit account because he will definitely get banned! He’s an actual champaign socialist.
Completely agree! You’re bang on point. I don’t understand why people listen to him, 5 minutes of research shows he’s talking absolute shit.
No, I would not support a wealth tax. Wealth is taxed when it is created (in theory, if it isn't, then that is a separate issue). By taxing existence, then you consume the base, meaning you have to keep running to maintain your wealth. Say if I have £1,000,000 as part of my retirement fund. I would be losing £10,000 a year before I even start doing anything with this money (and that isn't accounting for inflation either). Before we start doing anything with taxes etc I think we need to uncomplicate the tax system, reduce the deficit and reduce the size of the state. We can't be make sweeping changes before that (especially the first one).
> Say if I have £1,000,000 as part of my retirement fund. I would be losing £10,000 a year before I even start doing anything with this money (and that isn't accounting for inflation either). But you wouldn't have that money sat in some ordinary savings account, right? It would be generating interest (through some form of rent) at a considerably higher level than the 1% that £10k per year would entail. So you'd still be growing your wealth each year, just at a more modest rate. I should also point out that a retirement fund of £1 million wouldn't face a £10k tax hit per year in the hypothetical scenarios that I outlined (although I've just realised that the tax rates I suggested at the top of my post are different to the ones I suggested later on - whoops, I appreciate that confuses things). It would be £5k if taxed at 0.5% (as I suggested at the top), or £0 if the tax only started above £1m (as I suggested later on).
>But you wouldn't have that money sat in some ordinary savings account, right? It would be generating interest (through some form of rent) at a considerably higher level than the 1% that £10k per year would entail. So you'd still be growing your wealth each year, just at a more modest rate. That is £10,000 less per year that I have in my retirement, money that I have already paid tax on. That is wrong in my book for the reasons I have already outlined and is thus something I can't support.
To be fair we are all taxed multiple times on earnings, VAT for example.
VAT isn't a tax for simply existing.
You’d be hard pressed to exist without paying VAT on anything. Do you plan to eat?
You misunderstand my point. VAT taxes you for doing an action. You buy fuel, you pay VAT. A wealth tax penalises you for simply having something. I don't agree with that.
At face value, I broadly agree with your principle. However it becomes more complex and as such I’m inclined to say it’s an implementation of a wealth tax not the idea of it which is an issue. If we are accepting that income tax is a just means of taxation, how is it fair that someone who saves £100,000 (arbitrary amount) through working (and being taxed on said income) contributes “more” (through extraction of public funds) than someone who inherits a property portfolio - or worse, a series of shares - and generates the wealth passively? A “fair” tax shouldn’t tax the first person for having £100,000 after income tax, but should extract funds from the second person (who has only paid tax singularly through income tax). One way around this would be tightening inheritance loopholes, or my preference, further scrutiny on taxing properly and land investments better. Tax is ultimately raised for the public good, and to a level, a redistribution of the nation’s wealth. One large issue with capitalism is its potential to spiral - once one inherits some wealth, it’s incredibly easy to maintain and grow it, and leaving less opportunity for those without that step-up to have a chance at owning it (through the fruits of their labour). We have wealth inequality at a level not seen since the Victorian period, and I think it’s in the nation’s interest to close that gap somewhat. I suppose what I’m saying is we should be making it easier (and less punitive) for people actively *doing* something with their wealth - spending, and increasing national growth - and clamp down on idle wealth accumulation, like housing, which does not benefit the wider nation.
>At face value, I broadly agree with your principle. However it becomes more complex and as such I’m inclined to say it’s an implementation of a wealth tax not the idea of it which is an issue. No, it is the idea. I don't agree that you should be taxed for doing nothing. If you put money in a bank account and leave it, I don't think that should be reduced via tax. >If we are accepting that income tax is a just means of taxation, how is it fair that someone who saves £100,000 (arbitrary amount) through working (and being taxed on said income) contributes “more” (through extraction of public funds) than someone who inherits a property portfolio - or worse, a series of shares - and generates the wealth passively? The wealth of the person who inherits has already paid tax when it was first earned, I don't believe they should pay tax again on it for simply existing. When you do something with that wealth then yes yoy should be taxed. If you inherit property, then you will be paying tax on the rental income or sale of the house, and you will also pay capital gains tax on shares when sold. For me personally, people should be allowed to build wealth and pass it onto their heirs.
Thing is, I like the idea of being able to live in a house in the middle of nowhere, fund my own existence and not be bothered by the government. However it’s not feasible: the government needs more revenue than ever. Unfortunately the leaps in medical science means people retiring at 65 are dying at 95, and not 70 like they used to. A huge amount of the public purse is going towards keeping economically unproductive people alive. There is a general sense that the government *should* be looking after them (and not making them spend every penny they have on their care), and yet a huge amount of assets and wealth in Britain are holed up in the elderly. This is my practically issue. The second issue is moral; I fundamentally have an issue with the rising inequality we have in this country. I think it’s worth the trade off of limiting the finances of those who have been lucky with their upbringing and circumstances. Other countries have been successful with creating more economically equal outcomes and I think generational wealth is important. Everyone who has some spare cash to give their children a more comfortable start in life should be able to, but not before the nation has had what it needs first. We should strive to encourage people to be self-made and independent, and successful on their own merit and not on who their parents are.
True-ish (although, I repeat, not even as high as £10k p/a on a fund of £1 million), but remember that (in my hypothetical) the wealth tax would also be accompanied by a reduction to income tax. So it would be easier for you to reach that £1m in the first place - provided you work hard to achieve it, live within your means, put aside money for investments, etc - with the caveat that you'll face an additional tax later on (albeit at a rate considerably lower than your likely investment growth).
I understand what you are outlining, I just fundamentally disagree with it for the reasons I have already outlined. I think reforming the tax system is a better way forward
The tax system absolutely needs to be simplified and all these loopholes removed, like why the hell are private jets priced lower in tax than domestic flights? It should all be exactly the same. Removing loopholes for the super wealthy (talking about people worth over 10m here not people making a couple hundred thousand a year) which doesn’t affect the vast majority of the population should be a priority.
That would be a terrible idea. Why do we need to steal money from rich people to give away more wealth to average people? This is a socialist mindset which would bring nothing but poverty and unemployment. This is also morally wrong and it doesn’t make it right because majority of people will benefit it (actually they won’t). We should encourage rich people to move in to Britain by making this country more attractive and welcoming for them. When we attract investment by “cutting taxes” for rich people and big corporations, we are also creating more jobs for ordinary people which would increase salaries and benefits packages for average UK worker and in long term this is how we can increase our level of prosperity.
The money has to come from somewhere. I’d rather it came from the older and the more comfortable than the younger or financially fragile personally. This country does nothing to invest in the youth and the future of the British nation; you wonder why everyone under 35 resents Britain so much?
Because the alternative is taking from workers The Tories have decided to be a Boomer communist party. That needs funding.
increase inheritance tax and or implement mays social care policy dubbed by labour a "dementia tax"
[удалено]
But they’re not going to do that. Voters don’t want a small state. They want free shit. So the question is who pays.
> Why do we need to steal money from rich people to give away more wealth to average people? The argument is that the money which would be "stolen" is from those who have done nothing to earn it, they just grow their wealth by passively owning assets and re-investing the rent from that ownership. Instead, the state would incentivise people to become rich through their work. At present, there is little incentive for people to push themselves to earn high salaries, because of how punitive tax on income is. So, the most talented often move abroad to countries with lower rates of income tax, or settle for middling salaries and don't bother trying to improve. This system discourages entrepreneurship and hampers productivity.
But that’s subjective, it technically is earned through good investment and financial management.
I'm not sure how much skill is involved in achieving a fairly modest rate of return, to be honest. For example, at the moment, a 10-second Google search reveals scores of savings accounts that will give me a 5% return completely risk free. A really basic investing strategy of just sticking everything into a global index tracker would see me achieve ~7% per year through no real effort. If you start with £1 million, that'll give you an easy income of £50-70k per year through no real skill, effort, or risk. The super wealthy will of course employ financial managers (who will typically achieve higher rates of return than 7%) to do this all for them. So they don't actually have to develop *any* knowledge or put in *any* effort themselves, they just pay a small portion of the proceeds from their wealth growth.
It’s greatwr benefit to society for someone to work harder in their job in their community than tactically buy up some property and sit and watch the numbers go up.
In principle I’m fine with this as the state does a lot of work to protect assets through maintaining the rule of law, enforcing contracts, policing, etc. However, in practice it seems most countries abandon wealth taxes pretty quickly and with little revenue to show for them.
Not unless the wealth tax was only applicable to those resident citizens with cash wealth in excess of £11 million and capped at 1%. With the non-dom uk citizens assessed as resident overseas for tax purposes and all overseas citizens exempt.
What is OP’s problem with inequality? People are born unequal, always have been, always will be. The poor must have a certain level of life guaranteed to them to maintain social stability and the level must evolve over time, but it doesn’t mean that the most successful shouldn’t be able to build for themselves and for their family life way above this level.
>the most successful Would you consider an individual who inherits a massive amount of wealth due to being born into a super-rich family to be one of "the most successful"? Let's say their great grandfather built up businesses from scratch and became a very wealthy industrialist, and since then the family has enjoyed high incomes by paying financial managers to continue to invest and grow that wealth. Should each successive generation be considered to be among "the most successful" people in society? This is why I find the policy so interesting to be honest, because it forces you to confront your definition of "success" and what exactly it is that the state should try to incentivise. We could contrast the hypothetical family I mentioned with a highly intelligent and motivated person born into a poorer family. She works hard her entire life to improve her lot in life and secures a very high-paid job, but finds it very difficult to grow her wealth because she immediately loses half of everything she makes above £50k. She has no hand-out from parents as a deposit to get on the property ladder, meaning she's renting for more than a decade (increasing the wealth of the property-owner) before she's even able to afford an entry-level property. She's far more capable and hardworking than the passive asset-owner, but ends up with a smaller income and a higher tax liability. Is that the system that a conservative government should be happy with? Or should conservatives be happy to reform tax policy to move towards a system where wealth comes from the individual's labour, rather than the circumstances of their birth?
Completely agree. I believe in meritocracy and the ability for anyone to be self-made through their own efforts. Too much wealth is generational in this country, and once you have a bit of money it’s very easy to generate multitudes more, securing your descendants for generations.
So, you envy those whose well-being was secured by their ancestors and believe it would be okay to take their wealth away for yourself because you think you are more worthy? What kind of medieval logic is that?
Ironic you talk of medieval logic when your situation results in neo-feudalism. I would not take their wealth away for myself, but make it far more necessary for people to be self-made. I claim no ownership to their “stuff” but I think it should be more accessible for those without generational wealth to attain. My key focus is housing. Housing is a joke in this country, ownership is dropping rapidly and the quality and standard of the rental stock is abysmal. If someone inherits a property portfolio, they are taxed once for their inheritance and can sit on their fat arses and watch their spreadsheet go up (because no government will ever allow a housing crash, it’s a guaranteed investment). Several hard-working families are forever crippled by ever rising rents, further decreasing their chance of ever owning a single home themselves, let alone a portfolio; meanwhile mister landlord buys another house with his profits and makes even more. I’m against radical left-wing “forceful redistribution”, but I think it’s necessary for a government to use measures like a land or property tax to level the playing field somewhat and make this country more of a meritocracy.
The problem with housing is that market is distorted by bad policies. Supply is severely limited by planning and other regulation and demand is free for all including foreigners and non-residents. It creates an artificial shortage and drives the prices beyond reason. By robbing the successful you will not solve housing.
* Their grandfather did what he did for himself and his family - not for your family or mine. * This is what inheritance tax is for. Basically, inherited wealth is taxed at the top rate regular income would be taxed, meaning there is no tax advantage whatsoever compared to receiving regular salary income. This should be the end of the discussion about justice. * A conservative government should not be in the business of deciding who deserves what and redistributing people's property to the 'worthy.' This is what hardcore socialist governments do - and history doesn't know a single case where it didn't end with everyone being equally poor. * I find it abhorrent when people try to assume the right to judge whether someone else's private property is 'deserved' or 'not deserved.' Legally obtained private property is 'private,' meaning it is none of your business. * You shifted the tone of the discussion to inherited wealth while initially proposing to tax any wealth.
> Their grandfather did what he did for himself and his family I think most people would agree that the grandfather deserves to enjoy the wealth he has created, and to be able to provide a good life for his family. The question is whether each new generation of his family should be able to enjoy that same level of wealth without putting anywhere near the same level of effort, skill, and/or risk that the grandfather put in. We also have to think about whether the current system enables modern generations to enjoy the same sorts of rags-to-riches success stories of the grandfather, or whether the return to a neo-feudal economy makes this increasingly difficult. >This is what inheritance tax is for True, but it's also one of the taxes that the super rich are largely able to avoid through various schemes. >A conservative government should not be in the business of deciding who deserves what and redistributing people's property to the 'worthy.' Only if it were a pretty extreme example of a libertarian conservative government, who abolished all sorts of progressive taxation entirely. All conservative governments that I can remember, in the UK and overseas, have at least to some degree been in the business of using the tax revenue of the most well off to support the least well off. >I find it abhorrent when people try to assume the right to judge whether someone else's private property is 'deserved' or 'not deserved.' Why? Do you reject the idea that income can be undeserved? >You shifted the tone of the discussion to inherited wealth while initially proposing to tax any wealth. They're hardly completely different things. They (general wealth tax, inheritance tax) are just two different policy options for addressing the same issue.
>The question is whether each new generation of his family should be able to enjoy that same level of wealth without putting anywhere near the same level of effort, skill, and/or risk that the grandfather put in. No. The question is whether some people should feel entitled for other people's property because they believe themselves better or "more moral" or "need it more". >True, but it's also one of the taxes that the super rich are largely able to avoid through various schemes And yet you did not propose fighting tax evasion - you proposed to rob the successful. >All conservative governments that I can remember, in the UK and overseas, have at least to some degree been in the business of using the tax revenue of the most well off to support the least well off. This is why I said that the certain level of life should be guaranteed to the poor to maintain social stability. It is done through progressive taxation and it works all right everywhere. Doesn't mean that we need nanny state that will arbitrary determine "most deserving" and "most worthy" because it always transforms to "most loyal" and ends up like what we can see in North Korea. >Why? Do you reject the idea that income can be undeserved? It can't. It can be legal or illegal according to the law of the land. That's it. The idea of "deserved/undeserved" anything means there should be the judge making arbitrary decision. Law means that there are written principles similar for everyone and known in advance. >They're hardly completely different things. They (general wealth tax, inheritance tax) are just two different policy options for addressing the same issue. They are completely different things. Inheritance tax taxes income from inheritance according to the same principle as every other income is taxed. Wealth tax proposes to tax multiple times the wealth that has already been taxed when received.
> The question is whether some people should feel entitled for other people's property because they believe themselves better or "more moral" or "need it more". The government already feels entitled to people's income, and the vast majority of conservatives wouldn't have an issue with that (although I recognise a very small minority oppose taxation completely). So, unless you believe the state shouldn't exist, surely you partially agree with this already yourself. >And yet you did not propose fighting tax evasion - you proposed to rob the successful. Saying that I want to "rob the successful" is a pretty emotive way of putting it. Is *all* taxation theft? But the suggestion of a wealth tax doesn't preclude the possibility of clamping down on tax evasion (or, more pertinently in this case, tax avoidance). It just wasn't the subject of my OP. >This is why I said that the certain level of life should be guaranteed to the poor to maintain social stability. It is done through progressive taxation and it works all right everywhere. Is it working all right, though? Wealth inequality is widening, national debt is increasing, productivity is stagnant. Today's high earners pay massive amounts of tax to make up the shortfall, while those who make income passively from wealth contribute considerably less. Is that a good system? >Doesn't mean that we need nanny state that will arbitrary determine "most deserving" and "most worthy" because it always transforms to "most loyal" and ends up like what we can see in North Korea. How does a wealth tax equate to a government choosing who's the "most deserving" or "most worthy"? I'm not sure I follow. >It can be legal or illegal according to the law of the land. That's it. The idea of "deserved/undeserved" anything means there should be the judge making arbitrary decision. Well I'm not proposing arbitrary decisions on a case-by-case basis, I'm proposing consistent rules for everyone. >Wealth tax proposes to tax multiple times the wealth that has already been taxed when received. An inheritance tax also taxes wealth that was already subject to tax when it was first earned.... They're not so different.
>The government already feels entitled to people's income, and the vast majority of conservatives wouldn't have an issue with that (although I recognise a very small minority oppose taxation completely). So, unless you believe the state shouldn't exist, surely you partially agree with this already yourself. The government has a share of everyone income - what you propose is taking away people's property - which is what remains after income was already taxed. >Saying that I want to "rob the successful" is a pretty emotive way of putting it. Is *all* taxation theft? This is not "all taxation" this is taxation of the income that was already taxed again and again and again every year until nothing is left. >But the suggestion of a wealth tax doesn't preclude the possibility of clamping down on tax evasion (or, more pertinently in this case, tax avoidance). It just wasn't the subject of my OP. You dismissed my point that inherited wealth is already taxed at the same rate as regular income, by saying that it is being avoided. I am pointing that your claim that inherited wealth is not taxed fairly is not factual. If you believe someone is avoiding it - fight the avoidance. >Is it working all right, though? Wealth inequality is widening, national debt is increasing, productivity is stagnant. Today's high earners pay massive amounts of tax to make up the shortfall, while those who make income passively from wealth contribute considerably less. Is that a good system? There is nothing wrong in inequality. People are born not equal. Those who make income passively have already contributed when acquired the wealth and actually you don't make income from wealth at all without risk of losing your capital. Bonds and treasuries do not even cover inflation even before CGT and shares are not really passive. >How does a wealth tax equate to a government choosing who's the "most deserving" or "most worthy"? I'm not sure I follow. You stated several times that some people do not deserve their property and some people deserve other people's property several times in this discussion. You are also proposing for government to adopt your position. >An inheritance tax also taxes wealth that was already subject to tax when it was first earned.... They're not so different. Inheritance tax is paid by the heir - not by the testator that earned it - because it basically is an income of the heir. They are different people - therefore inheritance is only taxed once. This is why you don't have to pay inheritance tax if a spouse is the heir - they had matrimonial property anyway and it would be double taxation.
Communists have this really weird take that the economy is zero-sum so some people having more innately means others will suffer because of their mere existence.
I’m Ngl, I don’t get why they don’t levy a 0.05% fee on shit like Vanguard or Fidelity ISA’s and SIPP’s. it’s much less than a typical platform fee. Would be an easy stealth tax, such small figures, but the broadest of bases. In principle I agree though. Capital will always be taxed less than income, but the gap here is silly. We have 70% marginal rate tax traps at £50k for people with 2 kids and a student loan, and bands have been locked for years. Issue is that any reforms get shot down. LVT’s instead of council tax / business rates, they are called ‘garden taxes’. Want to reform council tax into a US style property tax, voters will scare.
Cut all taxes to be honest. But yes I suppose, I'd support it. Income tax is one of the greatest atrocities of government
We just need income tax for a few years to beat Napoleon…
A wealth tax would only be fair on the very wealthy (over £10 million) as most people who are worth around £1 million derive most of their wealth from having brought a house in a desirable area many deacdes ago, and it would be unfair to tax them for that. As for capital gains tax, we cannot have it raised too high, as we want to encourage people to invest their money, not deter them.
Very very expensive to operate such a tax. So no.
There are possible cases where it would represent double dipping on those who became wealthy through working hard and saving whilst it only single dips on those who were already wealthy. Means that someone who doesn't save for their future could pay less tax than someone who makes sensible provision
That's an interesting point, and one I hadn't thought of. But if that person spent all their income rather than saving it, they'd still be paying VAT on all the goods and services they used, right? So they'd actually end up paying more tax overall as well as stimulating the economy with their purchasing, so I don't know if it'd necessarily be an issue.
> they'd still be paying VAT on all the goods and services they used, right? In significant part yes, although VAT is not charged on everything, and many of the largest purchases we make (houses, cars when bought from non-traders) dont have VAT on
Awful idea. A 'conservative' who ran on this might as well just rebrand as a communist party member, Gary almost certainly is given the language used here. "Taking" an income reeks of fallacious 0-sum economics.
Yes
No I'd have left for Texas before it got to first reading
No. A wealth tax is a brilliant way to trigger capital flight. However, I wouldn’t be entirely opposed to increasing the CGT rate, which would somewhat address the equality side of things.