MSE News: Savers lose nearly £18 billion a year

grey_gym_sock

Glen_Clark wrote: »

The argument against increasing Corporation Tax is that Companies may relocate their tax affairs to a parasite state like the Isle of Man or Jersey where the tax rate is lower.
It would be more effective to raise tax on land and property as that cannot be hidden abroad.

i'd agree it's more difficult to prevent tax avoidance when you're taxing corporate profits rather than land. but that's no reason not to try.

it would be as unfair to put too much of the tax burden on landowners as too little.

GeorgeHowell

Glen_Clark wrote: »

I don't want to keep going round in circles but you just don't seem to want to understand this.Your argument that the money has already been taxed is just a distraction.
£325,000 in my bank account has already been taxed. If I leave it to a billionaire who has done nothing to earn it he will pay no tax on it. If I pay it to as gardener as his sole income for a lifetimes work of 45 years, he will have to pay tax on it. Even though I have already paid tax on it. That is the way taxation works. Whenever money changes hands the Government normally wants a cut. The money in circulation will have been taxed several times. and it will be taxed again and again. If money was only taxed once the Governments would have no income.

Money is the scorecard for economic activity, whether transactional (income & spending) or stored (wealth). It does indeed go round and round, but it's not the money that's taxed, it's the economic activity. If a gardener is taxed on his income, it is the gardening that is taxed, because that is a service which has involved economic activity and created wealth -- ie a nicer, tidier and therefore more valuable garden. The gardener then spends some of his after tax income on, say, filling up his van, and that's taxed again, the same money but a different activity. The petrol retailer and oil company spend that money on other things and that's taxed again, and when their employees receive some of it as income, that's taxed -- in each case same money but different economic activity.

If however some money is gifted by one individual to another, then there is no economic activity involved. No goods or services have been produced or changed hands, so it's a tax on wealth, and on wealth that's probably already been taxed when it was created.

How much taxation should be based on activity and how much on wealth is a political argument. But it is a fact that tax on activity is not normally a double-taxation, whereas tax on wealth generally is.