The Super Rich

[malificent7]

I watched two tv programmes on them last week. Many living in one of their many opulent palaces all saying they didnt think they should be taxed more.
Then all the news about off shore tax evasion. If i dont pay my taxes i get a court order from the council while i sit in my tiny rental.
Aibu to feel a tinsy bit annoyed? Nothing will change though will it?
Perhaps i nedx to work harder.

Everyone on this thread is HONESTLY saying that if they had a perfectly legal, above board way of having more net income from the same gross? No. It's sour grapes
This kind of attitude makes me sick. No I wouldn't.

I have a business. I claim my expenses as business costs therefore they come out of any profits pre-tax. I think that's fair.

I have low expenses and could legally claim more as I'm below the thresholds of what would be considered 'typical'. This would reduce my tax bill. I don't. Because, well, it's not right. It would be legal but it's not ethical.

So yes I do get on my high horse when the super rich avoid tax.

So I'm arguing that If anyone on this thread that earns (for example) £16,000 and takes advantage of the tax avoidance scheme known as a "personal allowance" (instead of voluntarily paying tax on ALL their earnings) is a hypocrite if they are shouting that others shouldn't also use LEGAL methods to reduce their bills.

I profoundly disagree with this - I don’t accept you are comparing like with like. As with people saying that somehow getting a legal 3million VAT refund is just the same as getting £3 tax free interest on an ISA, the size of the amount has a bearing.

everyone on this thread is HONESTLY saying that if they had a perfectly legal, above board way of having more net income from the same gross? No. It's sour grapes

No, not everyone. A few of us are pointing out that some super rich people don’t dodge as much tax as they can.

Other people are saying everyone is a greedy bastard (presumably because they are) and that those of us who say we aren’t are liars - that says more about them than us.

So yes I do get on my high horse when the super rich avoid tax.

I agree with this. I would feel less strongly if, as a wealthy country, we ensured that everyone was decently housed, that food banks were consigned to history and that we all had access to decent health care.

I have a certain respect for people who have earned their wealth by hard work. I have little for those whose wealth has just been passed down to them by means of 'tax planning', who may not have any idea of what a day's work looks like.

To play devil's advocate - if we did all that, would it deincentivise people to work? I know of a few (not many but a few) people who have quite deliberately manipulated the system to get a "free" council house, and a "free" kitchen from the council etc. Where do we draw the line between making sure there's no kids in poverty, people aren't left without medicine or food etc, and making it seem that it's not worthwhile to bother working?

Maybe I'm overly cynical but I do think humans have a tendency to greed and laziness and not everyone overcomes either or both. Prove me wrong, I'd like to be cheered up!

I fail to see why the poor need to be kicked in the teeth to be incentivised but the wealthy need to be given tax breaks. I am quite sure that some people do try to get 'free' council houses, not that there are all that many left, but I don't think they have the monopoly on people who are dishonest. It's just that the extreme wealthy can use their money to hide their dishonesty.

Maybe people do have a tendency to be greedy and lazy but go out into the community and there are an awful lot of people giving up time and money to voluntary work, so yes, they do exist.

The wealthy aren't given tax breaks.

They use the same tax system that we do, making use of those avoidance vehicles that are legally available to everyone.

There are existing laws in place to punish those that pursue avoidance strategies that are stretching the boundaries of the law, and those evading tax illegally.

As with all criminals, it's not always easy to identify and prosecute. Successive governments have attempted it, with negligible success.

The top 1% in the U.K. pay 30% of our taxes, the top 10% pay almost 60%.

This is up from about 10% and 30% in the 70s.

"The top 1% in the U.K. pay 30% of our taxes, the top 10% pay almost 60%"

And so they bloody should, instead of trying to avoid taxes using off-shore accounts. Tax is a vital social good to redistribute wealth and prevent rising inequality, which ultimately hurts everybody.

And it's ludicrous to say that anyone can off-shore their money. There are a LOT of financial instruments that are only available to the super-wealthy, with minimum investments running into the hundreds of thousands or millions.

Our household is top 10% btw, before someone accuses me of the usual fucking boring thing of leeching off others. Not everyone who is doing OK is a selfish arsehole.

I don't see the relevance in saying £16000 makes you part of the super rich of the world.

It might if you lived in a poor country and earned£16k but in Britain where just to put a roof over your families head would take up most of that, not to mention food, water rates council tax gas and electricity and clothing and transport to and from work to earn this £16k.

It wouldn't even scratch the surface.

Whiskyowl, are you saying that people should volunteer to pay more tax than they legally have to?

And yes, anyone can offshore. Ask the poor sods who stashed their money in Iceland. You can offshore with as little as £500.

are you saying that people should volunteer to pay more tax than they legally have to?

I support raising taxes. Not on the poor however.

High earners give up 50% in tax and NI, with no personal allowance. I think half your earnings is enough. Historically asking for more has been counterproductive, but maybe it is more about being punitive for some.

To play devil's advocate - if we did all that, would it deincentivise people to work?

Exactly what happens which is why huge numbers of doctors and dentists have reduced their working hours to get their wages below £100k to avoid the punitive marginal tax rate of 62% they suffer on incomes between £100k-£123k. Why work 5 days per week only to lose 62% of your earnings for Friday?

I feel 50% is too much and I suspect the state would take in more tax if they reduced tax rates on the higher paid. The higher paid as someone jsut quoted above are paying more tax than ever an a higher percentage of tax than ever despite reporst to the contrary in the press which makes it particularly annoying if you pay a huge load of tax as plenty of us do on MN and yet people will say things like ah you're self employed so you don't pay any tax (when in fact never have the better off paid as much tax as a percentage of UK tax receipts in the UK as now! - it as if we pay all this huge amount of tax, work half the year for the benefit of others and even then people don't even realise we are paying it and think we just evade or avoid it all...... I suppose people must think all this tax revenue instead comes from the magic money tree).

But despite the super rich paying apparently more and more in tax, they are also getting richer at the same time? While pretty much everyone else is stagnating or getting poorer. Don't know how that happens. And let's remember we're talking superrich here, hundreds of millions of pounds or even billions. I'm sure those on high salaries are fed up of getting taxed to death and I don't blame them but why is it OK for the billionaires to avoid tax using these schemes.

Don't know how that happens

Since Thatcher there has been a tremendous transfer of wealth from the bottom to the top.

The whole thing about the super rich is exactly as my economics teacher explained: you can't tax the poor because they have nothing -hence a tax free allowance to keep then quiet.
You can't tax the rich... They have the means to hide their money- hence the legality of offshore accounts. Remember some money is better than none!!!
That leaves the middle, easy to control. They have enough to be taxed, the money is easily traceable nowhere to hide. Steady income for the state, als known as market economy.

Since the rise of globalisation there has been a transfer of wealth from the bottom to the top.

The rich are rich because they and their businesses are mobile, because we buy their stuff, because they invest in the markets.

because we buy their stuff

Why make stuff? Manipulate currency rates and interest rates. Profit!

Why work 5 days per week only to lose 62% of your earnings for Friday?
Someone earning £100k to £125 will, in fact, still be paying less than 45%.

I feel 50% is too much and I suspect the state would take in more tax if they reduced tax rates on the higher paid

It works out at less than 45% for everyone. Including NI it is less than 47% even for billionaires. At £123k it works out at less than 40% including NI.

Someone earning £100k to £125 will, in fact, still be paying less than 45%.

Overall, yes, but that's not how "decision making" works. If they have the choice of working 4 days or 5 days, and know that they'll only "pocket" 38% (less travel costs, etc) of their fifth day, they make the decision simply not to do it, as 38% is simply not worth the loss of their time, and after all, earning £100k per year is plenty, they probably don't need that extra 38% of the next £25k, so a day off is more valuable to them. It's marginal tax rates that matter when decision making, not average tax rates. The statistics don't lie. We have a massive shortage of doctors and dentists and huge numbers of them have reduced their working hours in the last few years. I work for doctors and dentists and know from the horses mouth that the 62% bracket is a decision maker for them.

And yes, anyone can offshore. Ask the poor sods who stashed their money in Iceland. You can offshore with as little as £500.

The "offshoring" being referred to is money which is off shored before tax is paid here. Not to those paying tax then putting it in foreign accounts.

One loophole is people put their earnings into an offshore company in UK dependencies with little or zero tax rates then borrow that money back, not paying tax because it is a loan and then never have to pay the money back.

How can someone working in an ordinary job where the tax is taken out by PAYE, before they get their money, do this?

Badbadbunny, the answer is then to train up more doctors and dentists. Having more people being content to live on just under £100k and doing a 4 day week seems like a win win situation to me.