Tax on wealth suggested

thegentleway

zagfles said:

thegentleway said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

I think that’s a myth. There’s plenty of evidence that tax doesn’t make rich people leave:

https://www.forbes.com/sites/patrickwwatson/2018/05/10/high-taxes-dont-make-rich-people-move/?sh=2bcd4ec525e3
they find loopholes and pay a lot less but they don’t leave in droves. 

That article is the sort of stuff written by someone who wants to try to prove, or discredit a point, by mixing specific statistics with vague statements.

I agree it's not a great article and it was lazy of me to just link the first one that came up on duckduckgo. In my defence, it's hard to find good journalism and people can read the book it discusses (The Myth of Millionaire Tax Flight: How Place Still Matters for the Rich by Stanford University sociologist Cristobal Young) if they are interested. No evidence was provided to substanciate the opinion that increased taxation makes the wealthy leave and therefore reduces tax income. People say stuff like that as if it's an obvious widely accepted fact when it clearly isn't. It's something to consider but it's massively overweighted, e.g. wealthy people in the US did not leave in droves when income tax was 90%. There's clearly plenty of leeway to increase taxation but it's just not popular with the wealthy. I don't have anywhere near a million pounds but I consider myself wealthy and would happily pay more tax; it's great value for money.

Mickey666

kinger101 said:

zagfles said:

kinger101 said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

Your first point is an unsubstantiated nonsense myth.

It's not particularly constructive to dismiss something as an unsubstantiated nonsense myth without offering anything in the way of evidence to counter it.  Barnstar didn't make any specific claims about x % of people leaving the country leaving to £y loss in revenue - just that more people want want to leave and if they did, you'd get no money from them.  Your point on UK assets is true, but we know tax exiles and tax havens exist, and even people on this forum have discussed moving to IOM.  

Indeed - it's blatently obvious that there do exist people who move country due to taxes, there are enough celebrity examples. So the idea that no-one does it is definitely a myth. The question is the extent.

But the other point is that it only takes a small minority of the rich to move to make tax increases on them fiscally negative, through the loss of all the taxes they currently pay, income tax, VAT, excise duties plus of course the indirect taxes from their spending such as restaurants, shop profits etc.

More widely, it could potentially discourage inward investment.  

I personally think the UK's biggest problem is that middle earners don't pay enough income taxes. Granted, state pensions are usually better in other countries, but ........

https://en.wikipedia.org/wiki/Tax_rates_in_Europe

Seems we already have a perfectly good mechanism for getting a bit more from millions of people without the need to invent a new tax.  

Hmm.  Think about tax in terms of the working week.
Thus, you work all of Monday (20% of the working week) to pay basic income tax.  ‘Middle earners’ then work all of Tuesday to pay their 40% tax rate.  Wednesday pays for NICs up to around 2pm.  So that’s around half the week gone already just working for the taxman. Next, we need another full day to pay the 20% VAT on pretty much everything we spend, so that takes us up to around Thursday midday-ish and the rest of Thursday (and maybe into Friday) is spent on other taxes such as council tax, car tax, petrol/diesel tax, gas/elec tax, insurance tax, alcohol tax, etc.
So, welcome to Friday, when you are finally working for yourself and out of that you have to pay your rent/mortgage, buy food, pay gas/elec bills etc before you’re finally left with disposable income that you can spend on enjoying yourself - so that’s probably just a few hours on Friday afternoon that you’re actually working for your own enjoyment.
THAT’S the sort of expensive society we’ve built for ourselves, yet many people still argue that taxes should be higher because government needs more money. 

Another_Saver

zagfles said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

But if we're talking about wealth then a transaction tax is a stealthy way to go about it. We already have the bank levy, so it isn't a huge step further to go via the FCA list and implement a 1bps tax on all transactions paid by financial institutions. They can choose whether to pass it in to customers directly.

Each institution just adds up their total transactions in all their accounts over the year and pays 1bps to the treasury. Compared to the cost of managing cash, credit card charges, business bank accounts, accountants etc. for most people and businesses this will be negligible. A household with a joint gross income of £60k would pay £6 on the way in (whether that goes to HMRC, pensions or take home) and £6 on the way out (whether that goes on spending or into a savings or other account). Although they are only really paying half that.

Seriously? Are you assuming all spending comes straight out of the account that pay has gone into?

I spend on my credit card. One transaction. I get paid. Another. My credit card bill comes. That gets paid by DD from my current account. Another. Some months I may have spare cash so move it to a savings account. Another. Other months I may need savings to pay off the credit card so move money back to my current account. Another. Some people who want to teach their kids financial management will give them pocket money by transferring money to their account. Another. They then spend it. Another. 

And that's not even getting started on typical MSE behaviour where people move money about all over the place eg to make use of bank switching/paying in thresholds, regular savers etc. It would stifle competition - if it adds cost to eg transferring a pension or savings to another provider. 

I didn't assume anything, you did. Via open banking you could create an exemption for movements between own accounts.
All taxes are costs so your last point is moot.

zagfles

kinger101 said:

zagfles said:

kinger101 said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

Your first point is an unsubstantiated nonsense myth.

It's not particularly constructive to dismiss something as an unsubstantiated nonsense myth without offering anything in the way of evidence to counter it.  Barnstar didn't make any specific claims about x % of people leaving the country leaving to £y loss in revenue - just that more people want want to leave and if they did, you'd get no money from them.  Your point on UK assets is true, but we know tax exiles and tax havens exist, and even people on this forum have discussed moving to IOM.  

Indeed - it's blatently obvious that there do exist people who move country due to taxes, there are enough celebrity examples. So the idea that no-one does it is definitely a myth. The question is the extent.

But the other point is that it only takes a small minority of the rich to move to make tax increases on them fiscally negative, through the loss of all the taxes they currently pay, income tax, VAT, excise duties plus of course the indirect taxes from their spending such as restaurants, shop profits etc.

More widely, it could potentially discourage inward investment.  

I personally think the UK's biggest problem is that middle earners don't pay enough income taxes. Granted, state pensions are usually better in other countries, but ........

https://en.wikipedia.org/wiki/Tax_rates_in_Europe

Seems we already have a perfectly good mechanism for getting a bit more from millions of people without the need to invent a new tax.  

Indeed - but income tax rates, VAT, NI have become political sacred cows that no-one dares touch (not to increase anyway).

If we are to go down the wealth tax route I like the LibDem's idea of a mansion tax, that would have the advantage of dampening house prices particularly in expensive ares like London. So as well as raising revenue it would lower demand, prices, feeding down the chain to lower value houses, and so the cost of living for a lot of people. And it would be hard to dodge, couldn't be moved abroad, and could be levied on foreigners who buy London houses as a tax haven or to launder dodgy money.

EdSwippet

thegentleway said:
...e.g. wealthy people in the US did not leave in droves when income tax was 90%.

The US taxes on both residency and citizenship, so for US citizens, leaving the country wouldn't suffice. They would have had to have physically left the US, obtained another citizenship, and then renounced their US citizenship. That's a much higher barrier than just moving country.

Another_Saver

Mickey666 said:

kinger101 said:

zagfles said:

kinger101 said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

Your first point is an unsubstantiated nonsense myth.

It's not particularly constructive to dismiss something as an unsubstantiated nonsense myth without offering anything in the way of evidence to counter it.  Barnstar didn't make any specific claims about x % of people leaving the country leaving to £y loss in revenue - just that more people want want to leave and if they did, you'd get no money from them.  Your point on UK assets is true, but we know tax exiles and tax havens exist, and even people on this forum have discussed moving to IOM.  

Indeed - it's blatently obvious that there do exist people who move country due to taxes, there are enough celebrity examples. So the idea that no-one does it is definitely a myth. The question is the extent.

But the other point is that it only takes a small minority of the rich to move to make tax increases on them fiscally negative, through the loss of all the taxes they currently pay, income tax, VAT, excise duties plus of course the indirect taxes from their spending such as restaurants, shop profits etc.

More widely, it could potentially discourage inward investment.  

I personally think the UK's biggest problem is that middle earners don't pay enough income taxes. Granted, state pensions are usually better in other countries, but ........

https://en.wikipedia.org/wiki/Tax_rates_in_Europe

Seems we already have a perfectly good mechanism for getting a bit more from millions of people without the need to invent a new tax.  

Hmm.  Think about tax in terms of the working week.
Thus, you work all of Monday (20% of the working week) to pay basic income tax.  ‘Middle earners’ then work all of Tuesday to pay their 40% tax rate.  Wednesday pays for NICs up to around 2pm.  So that’s around half the week gone already just working for the taxman. Next, we need another full day to pay the 20% VAT on pretty much everything we spend, so that takes us up to around Thursday midday-ish and the rest of Thursday (and maybe into Friday) is spent on other taxes such as council tax, car tax, petrol/diesel tax, gas/elec tax, insurance tax, alcohol tax, etc.
So, welcome to Friday, when you are finally working for yourself and out of that you have to pay your rent/mortgage, buy food, pay gas/elec bills etc before you’re finally left with disposable income that you can spend on enjoying yourself - so that’s probably just a few hours on Friday afternoon that you’re actually working for your own enjoyment.
THAT’S the sort of expensive society we’ve built for ourselves, yet many people still argue that taxes should be higher because government needs more money. 

Same in the UK, post war taxes were the end of the aristocracy and by the mid 70s our income Gini coefficient was down to ~0.25. Income taxes these days are ridiculously low compared with most of the 20th century, and I would hazard a guess they're easier to pay too in terms of the admin. Thatcher started the transition from income to consumption by cutting income and raising VAT, but this thread is about the necessity of a transition from taxing economic activity to taxing stores of value. As the ratio of wealth to GDP has risen, it only makes sense to shift the tax burden more to wealth, and there are ways you can do that (land value replacing council tax, transactions, extending the bank levy to all financial institutions i.e. an extra 1bps tax charges on all pensions/shares/funds/investment ISAa etc, including a foreign ownership of UK assets charge, charge companies 1bps of their book value over a certain threshold say £10m as anythingess than £1k wouldn't be worth HMRC's time). We could also adopt the German basic law regarding land, that land must also be used for public good (this is a whole topic in its own right) and charge land taxes according to use, i.e. you could create an exemption for commercial property in town and city centres to support the high street but target out of town warehouses more. A land value tax would make land banking unviable, which I hope could help the housing crisis, but one can only hope.

 I'd also like to see the main criminalised vice industries made legal, the definition expanded to include sugar, processed food and animal products, and taxed like alcohol, tobacco, gambling etc. That way you can make police/justice system savings, bring probably a few hundred thousand people and maybe a few extra BN a year into the formal, taxed economy, regulate to minimise the risks, and generate revenue to tell offset epidemiological causes of NHS/social costs.

kinger101

Mickey666 said:

kinger101 said:

zagfles said:

kinger101 said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

Your first point is an unsubstantiated nonsense myth.

It's not particularly constructive to dismiss something as an unsubstantiated nonsense myth without offering anything in the way of evidence to counter it.  Barnstar didn't make any specific claims about x % of people leaving the country leaving to £y loss in revenue - just that more people want want to leave and if they did, you'd get no money from them.  Your point on UK assets is true, but we know tax exiles and tax havens exist, and even people on this forum have discussed moving to IOM.  

Indeed - it's blatently obvious that there do exist people who move country due to taxes, there are enough celebrity examples. So the idea that no-one does it is definitely a myth. The question is the extent.

But the other point is that it only takes a small minority of the rich to move to make tax increases on them fiscally negative, through the loss of all the taxes they currently pay, income tax, VAT, excise duties plus of course the indirect taxes from their spending such as restaurants, shop profits etc.

More widely, it could potentially discourage inward investment.  

I personally think the UK's biggest problem is that middle earners don't pay enough income taxes. Granted, state pensions are usually better in other countries, but ........

https://en.wikipedia.org/wiki/Tax_rates_in_Europe

Seems we already have a perfectly good mechanism for getting a bit more from millions of people without the need to invent a new tax.  

Hmm.  Think about tax in terms of the working week.
Thus, you work all of Monday (20% of the working week) to pay basic income tax.  ‘Middle earners’ then work all of Tuesday to pay their 40% tax rate.  Wednesday pays for NICs up to around 2pm.  So that’s around half the week gone already just working for the taxman. Next, we need another full day to pay the 20% VAT on pretty much everything we spend, so that takes us up to around Thursday midday-ish and the rest of Thursday (and maybe into Friday) is spent on other taxes such as council tax, car tax, petrol/diesel tax, gas/elec tax, insurance tax, alcohol tax, etc.
So, welcome to Friday, when you are finally working for yourself and out of that you have to pay your rent/mortgage, buy food, pay gas/elec bills etc before you’re finally left with disposable income that you can spend on enjoying yourself - so that’s probably just a few hours on Friday afternoon that you’re actually working for your own enjoyment.
THAT’S the sort of expensive society we’ve built for ourselves, yet many people still argue that taxes should be higher because government needs more money. 

I think the median UK salary is around £32K.  So middle earners don't pay 40% income tax.  I don't thing higher rate should be touched without a more progressive banding system between £12.5 K and £50 K.

Your analogy doesn't seem to work.  I pay 40% tax, and I can assure you I'm not digging coppers out the back of my sofa on Friday night to cover the grocery shop and my disposable income is considerable higher than what I earn after 2 pm on Friday.

zagfles

Mickey666 said:

kinger101 said:

zagfles said:

kinger101 said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

Your first point is an unsubstantiated nonsense myth.

It's not particularly constructive to dismiss something as an unsubstantiated nonsense myth without offering anything in the way of evidence to counter it.  Barnstar didn't make any specific claims about x % of people leaving the country leaving to £y loss in revenue - just that more people want want to leave and if they did, you'd get no money from them.  Your point on UK assets is true, but we know tax exiles and tax havens exist, and even people on this forum have discussed moving to IOM.  

Indeed - it's blatently obvious that there do exist people who move country due to taxes, there are enough celebrity examples. So the idea that no-one does it is definitely a myth. The question is the extent.

But the other point is that it only takes a small minority of the rich to move to make tax increases on them fiscally negative, through the loss of all the taxes they currently pay, income tax, VAT, excise duties plus of course the indirect taxes from their spending such as restaurants, shop profits etc.

More widely, it could potentially discourage inward investment.  

I personally think the UK's biggest problem is that middle earners don't pay enough income taxes. Granted, state pensions are usually better in other countries, but ........

https://en.wikipedia.org/wiki/Tax_rates_in_Europe

Seems we already have a perfectly good mechanism for getting a bit more from millions of people without the need to invent a new tax.  

Hmm.  Think about tax in terms of the working week.
Thus, you work all of Monday (20% of the working week) to pay basic income tax.  ‘Middle earners’ then work all of Tuesday to pay their 40% tax rate.  Wednesday pays for NICs up to around 2pm.  So that’s around half the week gone already just working for the taxman. Next, we need another full day to pay the 20% VAT on pretty much everything we spend, so that takes us up to around Thursday midday-ish and the rest of Thursday (and maybe into Friday) is spent on other taxes such as council tax, car tax, petrol/diesel tax, gas/elec tax, insurance tax, alcohol tax, etc.
So, welcome to Friday, when you are finally working for yourself and out of that you have to pay your rent/mortgage, buy food, pay gas/elec bills etc before you’re finally left with disposable income that you can spend on enjoying yourself - so that’s probably just a few hours on Friday afternoon that you’re actually working for your own enjoyment.
THAT’S the sort of expensive society we’ve built for ourselves, yet many people still argue that taxes should be higher because government needs more money. 

Bit of an exaggeration. No account of the personal allowance, for someone on £25k they only pay 10% of their salary in income tax, and about 7% NI, so they've paid tax and NI before end of Monday.

Nowhere near "pretty much everything" has VAT on. Big expenses like mortgage/rent, and most food has no VAT. Gas/electric bills only have 5% VAT. Public transport has no VAT. Probably only about half the stuff the average person spends on has full VAT, so VAT would be paid by Tuesday lunch.

Excise duties would mainly depend on how much you drive, if 12,000 miles a year then maybe £30 a week in fuel excise and £5 in road tax. If you drink 10 pints a week, then about £4 in beer excise duty. Maybe £40 in council tax. So that'll all be paid by early Weds.

kinger101

Another_Saver said:

Mickey666 said:

kinger101 said:

zagfles said:

kinger101 said:

Another_Saver said:

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

Your first point is an unsubstantiated nonsense myth.

It's not particularly constructive to dismiss something as an unsubstantiated nonsense myth without offering anything in the way of evidence to counter it.  Barnstar didn't make any specific claims about x % of people leaving the country leaving to £y loss in revenue - just that more people want want to leave and if they did, you'd get no money from them.  Your point on UK assets is true, but we know tax exiles and tax havens exist, and even people on this forum have discussed moving to IOM.  

Indeed - it's blatently obvious that there do exist people who move country due to taxes, there are enough celebrity examples. So the idea that no-one does it is definitely a myth. The question is the extent.

But the other point is that it only takes a small minority of the rich to move to make tax increases on them fiscally negative, through the loss of all the taxes they currently pay, income tax, VAT, excise duties plus of course the indirect taxes from their spending such as restaurants, shop profits etc.

More widely, it could potentially discourage inward investment.  

I personally think the UK's biggest problem is that middle earners don't pay enough income taxes. Granted, state pensions are usually better in other countries, but ........

https://en.wikipedia.org/wiki/Tax_rates_in_Europe

Seems we already have a perfectly good mechanism for getting a bit more from millions of people without the need to invent a new tax.  

Hmm.  Think about tax in terms of the working week.
Thus, you work all of Monday (20% of the working week) to pay basic income tax.  ‘Middle earners’ then work all of Tuesday to pay their 40% tax rate.  Wednesday pays for NICs up to around 2pm.  So that’s around half the week gone already just working for the taxman. Next, we need another full day to pay the 20% VAT on pretty much everything we spend, so that takes us up to around Thursday midday-ish and the rest of Thursday (and maybe into Friday) is spent on other taxes such as council tax, car tax, petrol/diesel tax, gas/elec tax, insurance tax, alcohol tax, etc.
So, welcome to Friday, when you are finally working for yourself and out of that you have to pay your rent/mortgage, buy food, pay gas/elec bills etc before you’re finally left with disposable income that you can spend on enjoying yourself - so that’s probably just a few hours on Friday afternoon that you’re actually working for your own enjoyment.
THAT’S the sort of expensive society we’ve built for ourselves, yet many people still argue that taxes should be higher because government needs more money. 

I'd also like to see the main criminalised vice industries made legal, the definition expanded to include sugar, processed food and animal products, and taxed like alcohol, tobacco, gambling etc. That way you can make police/justice system savings, bring probably a few hundred thousand people and maybe a few extra BN a year into the formal, taxed economy, regulate to minimise the risks, and generate revenue to tell offset epidemiological causes of NHS/social costs.

The problem is these are consumption taxes, which disproportionately affect those on lower incomes.  VAT on meat would make a lot of sense from an environmental perspective, but it adds proportionately more to one's tax burden the less they earn.

Alexland

kinger101 said:
I pay 40% tax, and I can assure you I'm not digging coppers out the back of my sofa on Friday night to cover the grocery shop

I avoid 40% tax and I'm toping up a discounted reloadable gift card (using a 0% credit card) on a Friday night to cover the supermarket offering the best coupons that week..