Which taxes should Burnham put up?

A lot of people also confuse a large profit in absolute terms with an unreasonable profit. They see a profit of £1 billion and say that is totally unreasonable and should be subject to a windfall tax without considering it might only represent 2% growth on all the money invested. And who would take the risk of investing if a 2% return is punitively taxed?

The biggest shareholder of these large businesses are often pension funds. That 2% return is what funds the pensions of millions of people across the uk. Taxes and government interference in pension funds has led many businesses to collapse due to pension liabilities, leading to those pension liabilities (with significance loses to the pensioners) becoming another drain on the public purse.

Even Tony Blair warned against taxing the wealthy more. As PP said, it’s easy for them to leave the UK. Then the UK’s tax take is lower. This leads to:

Further tax rises, or
Cuts to public services, or
Higher borrowing

Maybe all three at the same time.

My priority would be to reduce wastage.

As for equity in housing, that can only be released if people down size. Plus part of the equity is inflation as opposed to actual growth.

Regarding taxing the super rich - the super rich don’t keep their money as great piles in the bank. Their wealth is in the shape of businesses that employ people. If you own, say, a £500 million business how do you pay tax on that wealth without shrinking the business? And why would you when you could move that business and all the jobs it creates abroad? Why would you continue to live in the UK when you could remain super wealthy and live in Monaco?

This is a very well thought through and well explained post. Thank you. As one of those people I completely agree, as do many of my friends and colleagues.

But it won't be the super wealthy that are paying.

IMO, the problem is that Labour has run a very effective smear against workers earning above £39,000, portraying them as the "broad shoulders" who should carry an ever-greater share of the tax burden that they somehow caused. A lot of people seem to have bought heavily into that narrative. Personal responsibility is out and entitlement is in. People quite rightly take umbrage when those on benefits are called scroungers, but it's a two way street. I've seen thread after thread on here arguing that people on benefits should be able to enjoy the same purchasing power, lifestyle and choices as those who work, and that the answer is simply to tax people earning £45k or more. After all, those posters and their supporters could only dream of earning that kind of money. Aren't luck and legs ups the real reasons for the earning disparity ? Should anyone be paid more than a nurse?

Surely one of the incentives to work, along side the physical and mental benefits, is that it gives you greater financial freedom and more choices. If work no longer brings a better standard of living, where is the incentive?

So now many people see £50k a year as wealthy, and at £100k you are effectively a trillionaire! I'd like to think at least one political party would have the creativity and backbone to go after the genuinely super rich. But the super rich are tricky, whereas workers earning £40,000+ are not. They are generally less mobile and are easier targets, with savings, assets, pensions and homes that are generally not held in complex tax structures.

I'm not sure where a country has to go when, for convenience, productive working people are held up as the problem and then used as a piggy bank, whilst the government takes three or four or more bites out of the same already-taxed money, all whilst ring-fencing its own profligate spending.

I am all for paying taxes, effective wealth redistribution and an efficient welfare state. But that's not what we have. What's the point of planning if the sacrifices you make to achieve some modest security in your later years, and to reduce your dependence on the state, are simply going to be taken away from you by Dick Turpin masquerading as Robin Hood?

I agree. But unfortunately even if parents pay maintenance, it’s not taken into account for benefits

Yes absolutely, that is exactly the point. The question of the thread is which taxes should Burnham put up and the fundamental answer before anything else, is he should put up the tax for the super rich. Whether he or anyone else is brave enough I think we can all agree is highly unlikely but as @Nonimity says, one day it will be too late, all the money will have been funnelled upwards and therefore these conversations are fruitless without tackling this issue.

Governments managed a redistribution of wealth after WW2 including having top tax rates of 90%, it has and can be done. I appreciate things hadn’t spiralled to the extremes they have these days with billionaires controlling the media and pretty much everything else beyond most of our comprehension but there is still a way and it really is the only thing that will make it possible to have all of these other conversations.

You would be surprised at some people's reactions when cash in hand is discussed.

It's okay, they are "getting one over on the government" / "taxed to death anyway, the odd job cash wont hurt" / "working men just trying to feed their family" etc etc.

I agree that it is tricky to tackle but other countries do some interesting things. It became a bit of a pet peeve of mine, so I have read far too many examples of this.

In Sweden the Home owner gets a percentage of the labour cost of tradespeople working on their home as personal tax relief - so all customers are keen to ensure all work is done through the books. Similar scheme happens in Canada for some limited types of renovation work. Same in Brazil - only with an official receipt the customer gets a small tax rebate.

In Taiwan when you buy a service from a self employed person you get the equivalent of a VAT receipt. And the receipts have a code that is a lottery ticket, that gets drawn regularly and you could win £100K or equivalent. Similar thing happens in Greece and is cheaper than employing a lot of tax inspectors, as customers insist on getting the receipt.

Or perhaps work could only be guaranteed / registered as compliant via building regs with a receipt that includes a VAT number? In Chile you can't claim against a builder for a civil issue if you haven't got an official receipt. The receipt must go through a government app which immediately takes off the tax.

Or builders merchants accounts could be linked to NI numbers, so if someone is buying £20K of materials a month, and only putting through that they work 1 day a week could flag an investigation. I think Australia and US have some techy ways to track these inconsistencies to investigate and minimise this type of fraud.

the other issue is companies not paying proper wages for what the values should be

It’s an interesting point about tradesman or the self employed. I regularly see jokes bandied about how they all earn £12400 or whatever is under threshold a year. Do they just keep cash in the mattress? Comes down to taxing turnover and not profit, properly closely loopholes and making people very uncomfortable with supporting people that evade tax.

The problem isn't whether the super-rich can be taxed more; it's whether any government is willing or able to do so.

In realpolitik terms, wealth translates into political influence, lobbying power, legal resources, media access, and capital mobility. Governments compete for investment and tax revenue, so there are strong incentives not to alienate major investors.

Even when politicians campaign on taxing the wealthy, the final legislation is often diluted through exemptions, negotiations, or international competitive pressures.

The issue is less economics than political power. In practice, the wealthiest individuals are often beyond the reach of the kind of aggressive redistribution people imagine not because it is technically impossible, but because the balance of power makes it extremely difficult to sustain.

I’m a fan of Gary Stevenson too. We need to understand that the majority of the middle classes are getting poorer, much poorer, at the hands of the super rich. We are failing to understand that money is a finite resource and that those who have that resource are increasing their wealth at our expense and this is speeding up. Yet here we are, blaming those who have next to nothing for causing the problem.

But SEN school spaces are easily £50k or more for day spaces. Remember mainstream not-for-profit independent schools are £25k or more without the additional staffing, equipment and therapists needing for an SEN placement.

I’m not sure there’s anything controversial about that, @DeedlessIndeed - the problem is how in practice to do it.

I’d go after people and businesses who defrauded the country during Covid.
i’d limit benefits.
I’d also subsidise childcare more to create a multiplier effect and encourage more productivity in society from those able and willing to work but discouraged by the cost.

Incentivise growth and give reasons for business to invest in the UK. Raising taxes and employment regulations on business just drives them away. Increase tax receipts through increased profits and higher employment rather than just making it harder and harder for businesses to operate.

Reform the NHS. Make it free for the most basic care and then introduce part payment in the way Europe does. Charge for appointments unless someone has an exemption and reduce the layers of bureaucracy.

Develop a strategy for AI. It has the capacity to automate, save money and give strategic advantage. Businesses are doing this right now, the government should be leading the way here.

Stop being scared of doing hard things because you’ll make people unhappy. That’s ultimately why we have Brexit - and now we’re worse off and people are still (maybe even more) unhappy. Be the grown up in the room that takes advice from competent analysts and strategists, rather than trying to just appease everyone. Public services have to be paid for, and we need to trust that our government is operating at the highest level of responsibility rather than just chasing popularity.

The biggest problem with the NHS isn’t funding. It is the way it is managed by competing interests where none of those interests are patient care. This dates back to the very beginning of the NHS and the need to bring private doctors running private hospitals into the NHS system.

Majority of SEN are not boarders.

But there is, obviously the super rich will do anything to make us think it is not possible but as discussed by people like Gary and the French economist Gabriel Zucman, there are ways. Everyone is on the same page that something has to change, I just think it’s worth listening to what people like this are saying. I can’t see a reasonable argument against aggressively taxing the super rich and saying they won’t like it doesn’t count!

Actually thinking about it I had several letters when I saw a consultant at the private hospital, including a parking permit. I live one road away...

If it involves an element of boarding you would be lucky to see change out of £120k!

Having been briefly involved in NHS IT a few years ago, I certainly wouldn’t guarantee it!

Not sure where you are getting your figures from but provision is no where near that amount!