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

N1AK

grizzly1911 wrote: »

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.

Wealth taxes don't penalise the prudent any more than income taxes punish the hardworking; which is to say that all tax penalises someone.

Yes there are slippery slope arguments against new taxes etc but in my opinion they ignore the fact that new taxes aren't created so that new spending can be funded; new spending is announced and then new spending or taxing is required.

If we need to raise more tax then the alternative to wealth taxes is higher income taxes and I think a balance of the two is better than a focus on either.

Finally for all the talk of people throwing away their money to avoid wealth taxes, at moderate levels it really won't happen much. If IHT was £250k (£500k for a couple) with 40% after that taxed then do you really think people would decide to waste money rather than leave their children 60% of it? If everyone paid a 0.5% tax on the value of their properties would people really stop buying houses? The biggest issue with IHT is that people who actually have a lot to pass on can afford the advice to find ways to avoid it and that is part of the reason why the rules need simplifying.

People can dislike tax all they want but opposing tax without understanding how government finances would operate in their absence is naive and yet extremely common.

HAMISH_MCTAVISH

Generali wrote: »

What's not to like?

Paying more tax before you're dead AND after you're dead.

I'm hugely in favour of government not getting two bites of the cherry from the same taxed income...

HAMISH_MCTAVISH

N1AK wrote: »

If we need to raise more tax.

That's the point though. We can't raise more tax from the same or smaller pool of revenue and assets.

We're maxed out.

Well on the wrong side of the Laffer curve.

What we need to do is reduce the tax rate, increase the size of the economy we're taking it from, and therefore increase the tax take.

A smaller slice of a bigger pie is what's required.

IveSeenTheLight

cepheus wrote: »

The OECD, the Paris-based thinktank, has argued that western welfare capitalism needs a rethink. No longer should governments rely so heavily on income taxes and transaction taxes, which are cyclical and encourage gambling on property at the expense of paid work. We need to switch to wealth and consumption taxes.

.......

Property is an obsession in the UK and the disease has spread to many parts of continental Europe. Land taxes, combined with lower income taxes, offer the prospect of a cure.

http://www.guardian.co.uk/business/2013/mar/03/top-economiesmust-shakeup-tax-regimes

Am I understanding this correctly?

A person could work hard, pay their taxes, own their home and when they come to retire many years later upon retirement, they may be forced out of their family home as their income reduces and they need to continue paying higher "land taxes"

I'm happy with Income Tax.
Pay more as I earn more and less when I earn less.

CLAPTON

IveSeenTheLight wrote: »

Am I understanding this correctly?

A person could work hard, pay their taxes, own their home and when they come to retire many years later upon retirement, they may be forced out of their family home as their income reduces and they need to continue paying higher "land taxes"

I'm happy with Income Tax.
Pay more as I earn more and less when I earn less.

Hard cases make bad law

the principle of land value taxes and / or wealth taxes doesn't need to be excluded for an odd case;
I'm sure you could think of suitable exemptions or other arrangements for people struggling in a £2million property who happen to have no income

grizzly1911

N1AK wrote: »

Finally for all the talk of people throwing away their money to avoid wealth taxes, at moderate levels it really won't happen much. If IHT was £250k (£500k for a couple) with 40% after that taxed then do you really think people would decide to waste money rather than leave their children 60% of it? .

I am not disagreeing with you and there does need to be a balance as you say. We may disagree on where that balance is perhaps.

My point wasn't really whether people would suddenly start flushing money away more that some burn it all the way through their life and end up with zip and then need supporting in entirety.

As you say with careful planning any pre advised sensible limit will tend to be avoided by the majority hence the fairly low level of recovery.

Generali

HAMISH_MCTAVISH wrote: »

Paying more tax before you're dead AND after you're dead.

I'm hugely in favour of government not getting two bites of the cherry from the same taxed income...

AFIAK, the choice being offered is paying tax before or after I die, not paying more or less tax.

In both cases I would choose the latter.

MacMickster

Generali wrote: »

AFIAK, the choice being offered is paying tax before or after I die, not paying more or less tax.

In both cases I would choose the latter.

I couldn't agree more. I doubt even TWH would be heard grumbling too loudly once he was 6 feet under.

On second thoughts, at least his grumbling would be muffled slightly. :A

N1AK

HAMISH_MCTAVISH wrote: »

That's the point though. We can't raise more tax from the same or smaller pool of revenue and assets.

No it's not the point at all. I think that better education is important in building a strong and prosperous economy but that has sweet fa to do with whether income or wealth based taxes are the better way of raising money; which is why I don't keep banging on about it in threads that have nothing to do with education and why people shouldn't be going on about the level of public spending in a topic that isn't about public spending. If people want to debate that they can create a thread to do so.

N1AK

HAMISH_MCTAVISH wrote: »

I'm hugely in favour of government not getting two bites of the cherry from the same taxed income...

Which is exactly the kind of naive sentiment that leaves us with stupid policies to begin with. If the government is going to take £50 off you then whether they do it by taking £25 when you earn it and then another £25 off you later or £50 off you straight away is the choice you're making.

The government can keep the current VAT rate, freeze income tax bandings, increase employer NI, tax alcohol harder, increase fuel duty etc and increase taxation by taking by taking more and more of people's income without actually having to put a tax increase in the budget so it's not like refusing new taxes magically stops them taxing more.