We need a land and wealth tax to replace income and transaction tax.

cepheus

grizzly1911 wrote: »

What do you think the limits should be for a wealth tax?

In an ideal world it's difficult to justify any unearned income, but perhaps a lower limit similar to income tax,

Perhaps all monies should be taxed based on a 5 year average. So if everything coming in terms of investment, inheritance, wages over the 5 years is say £200,000 you are taxed assuming you have £40,000 per year of income.

N1AK

grizzly1911 wrote: »

I agree with you points except, the real significance to the many, of receiving an inheritance to live off.

How many actually receive an inheritance of such magnitude and if they do they would need to convert that wealth into income. Which will attract consumption taxes even if they can take avoidance arrangements.

The inheritance itself should (may) have been taxed before receipt also.

Numerically a very limited number of people are born into enough money to live off of; in terms of the asset value though this group hold a very considerable proportion of the wealth in our country and there is little need or reason to ignore that and focus only on income.

You're arguments against inheritance tax are built upon the foundation that it is wrong to 'double' tax yet why? Unless we cut spending taxation must be raised to pay for it. Higher and higher income taxes simply make it harder for those who weren't born into a financially wealthy family to become wealthy; by applying a mix of both forms of taxation this issue becomes less prevalent.

Someone who inherits £1,000,000 (hardly a vast sum) already has a vast advantage over someone who does not. That money (if given at birth) could provide a £750,000 house, pay for university and still provide an income of £40,000 for life all in real terms. If tax on inheritance or wealth is avoided and taxes on income used then for someone without assets to ever reach such a position would become ever harder than the considerable challenge it would already be.

cepheus

75% of UK voters support a Mansion Tax, including 68% of Tory Voters

New polling shows overwhelming support among the public for a mansion tax, with supporters of all three main parties backing the measure by a significant majority.

Itismehonest

cepheus wrote: »

75% of UK voters support a Mansion Tax, including 68% of Tory Voters

New polling shows overwhelming support among the public for a mansion tax, with supporters of all three main parties backing the measure by a significant majority.

People will always vote for someone else paying if they think they personally won't have to.
The likelihood would be that, once introduced, the threshold would gradually be reduced until many more properties were taxable.

Generali

The problem with raising very substantial wealth taxes, and they would have to be substantial given the crazy levels of Govt spending at present, is that paying them is hard.

Unfortunately, the Govt won't accept wealth (houses, shares, land, bonds, race horses and gold) in payment of tax so in order to pay a wealth tax that is a substantial part of your income you need to realize some of that wealth.

That then creates 2 problems. Firstly in realizing (selling) your wealth you will (hopefully) have to pay CGT, reducing your ability to pay. Secondly, if all the other wealthy people are busy realizing assets who is going to buy your assets from you? Poor people can't and nor can rich people as they're sellers not buyers!

I actually think that a small wealth tax is reasonable, that a return to the old rates would be no bad thing. The Govt becoming a lot smaller in order for that to provide a substantial part of her financing would be even better.

N1AK

Itismehonest wrote: »

People will always vote for someone else paying if they think they personally won't have to.
The likelihood would be that, once introduced, the threshold would gradually be reduced until many more properties were taxable.

There is however the question of politics. I personally am not a fan of a 'mansion tax' and the targeting of the wealthy it represents yet it might be that it 'needs' to be done.

The conservative party is already being painted, constantly, as the party of the rich. Now they are against public opinion and, again, defending the rich. That is the political narrative being told and it does appear to be working.

I don't like populist politics but it's naive to think that it can simply be ignored because a party that entirely ignores it will never be elected; sometimes you need to do something populist to be able to do the other important things that are required.

N1AK

Generali wrote: »

I actually think that a small wealth tax is reasonable, that a return to the old rates would be no bad thing. The Govt becoming a lot smaller in order for that to provide a substantial part of her financing would be even better.

All those points were good ones and I certainly don't want to see large punitive wealth taxes either (if we must see any wealth tax). Personally I think inheritance tax is the fairest tax of all but unfortunately it is very unpopular. Ultimately, any effective reform of taxation would require a very considerable amount of time and effort be put into cutting back the system to a fraction of its current size.

cepheus

Generali wrote: »

The problem with raising very substantial wealth taxes, and they would have to be substantial given the crazy levels of Govt spending at present, is that paying them is hard.

What crazy Government spending is this?

Generali

cepheus wrote: »

What crazy Government spending is this?

That's a fascinating graph but also one which doesn't show Government spending. Instead it shows Government debt.

grizzly1911

N1AK wrote: »

Numerically a very limited number of people are born into enough money to live off of; in terms of the asset value though this group hold a very considerable proportion of the wealth in our country and there is little need or reason to ignore that and focus only on income.

You're arguments against inheritance tax are built upon the foundation that it is wrong to 'double' tax yet why? Unless we cut spending taxation must be raised to pay for it. Higher and higher income taxes simply make it harder for those who weren't born into a financially wealthy family to become wealthy; by applying a mix of both forms of taxation this issue becomes less prevalent.

Someone who inherits £1,000,000 (hardly a vast sum) already has a vast advantage over someone who does not. That money (if given at birth) could provide a £750,000 house, pay for university and still provide an income of £40,000 for life all in real terms. If tax on inheritance or wealth is avoided and taxes on income used then for someone without assets to ever reach such a position would become ever harder than the considerable challenge it would already be.

I am not against inheritance tax . It is a question of where the limit is set. It is a double taxation but that is life.

It was once for the wealthy, but ever more are starting to be drawn into paying it. The potential doubling of it for couples seemd entirely logical IMOas assets tend to be held across the two people.

I don't disagree that the vast proportion of the wealth is concentrated in a few. But as you say the number of large inheritances are relatively low.

One of the problems with taxing wealth, as you point out is that it penalises the prudent.

Over a life time somone with are relatively modest income (perhaps twice the average) could if they don't waste money a mass a reasonable wealth that easily breaches the current inheritance tax limits, even outside London. Someone else could burn there way through life and contribute nothing further.

I think there is some scope for additional wealth taxes but the question becomes at what sort of threshold do you start applying it.