What do you think of this idea of a wealth tax?

[LuluJakey1]

This is from The Guardian this afternoon. It is the third article I have seen in the Press two days promoting this idea.

www.theguardian.com/commentisfree/2020/jul/06/arts-wealth-tax-rishi-sunak-nhs-public-services?CMP=Share_iOSApp_Other

Personally, I think it is bonkers. She seems to be suggesting that ALL wealth in this country - houses, savings, pensions, shares/paintings etc should be subjected to a one off tax of 10% to get us out of the financial mess.

DH and I would have to find about £80,000 cash! We'd have to sell the house?

Yes- Yes it is a good idea and you are BU to criticise it.
No- It is an awful idea and you are right to criticise it.

@Raella50

Sorry but why is it that salaries are ok to be taxed extra to pay for this mess but personal wealth is not? So pensioners in massive homes don’t pay a penny towards the bill but young families juggling mortgages and childcare on a wage should be footing more of the bill? What about the mega wealthy who just inherit and inherit? Yes I know these things have already been taxed to the hilt but we’re talking about exceptional times an taxing people above the norm. We all have to contribute.

Sorry, but where are pensioners meant to get the money from. The over simplistic example you give of 'massive' homes is bollocks. They may be asset rich but cash poor. Particularly if they live in the South East. Oh yes, they can sell their homes can't they? In a stagnant market. Or perhaps the government can take the tax when they are dead - in which case it can apply to everyone can't it. I fucking hate this intergenerational divisive bollocks.

@SunflowerOwl

10% seems excessive when you consider how expensive housing is, but I'd be okay with a smaller wealth tax in theory IF I felt like I could trust our present government to spend the money wisely. Unfortunately I think its more likely they would piss it all up the wall on badly managed projects and therefore I think it's a shit idea.

No. I am only happy to pay more tax/ni when tax avoiding corporations and those wealthy enough to off-shore start paying their share. Wasn't that an EU direction of travel? And aren't we leaving the EU? Oh wait...

10% is ridiculously large for a wealth tax, because wealth in the country is so enormous.

i don't know why Toynbee published such a silly number.

To get people talking, perhaps?

@Oliversmumsarmy

Thomas Piketty published a very large book on this subject and won a prize for it. It is not serious to say that he did not do his research. Furthermore, I refuted your example easily on the basis that a person in negative equity, ie, probably insolvent, hasn't got any wealth and therefore wouldn't be assessed for any wealth tax. Your example confuses a wealth tax with a poll tax.

Then you say (regarding payment of tax when property is sold):

I can see a huge problem with this. If you are relying on people then to actually sell the house. All that will happen is people just wont sell.

I don't see that as a problem. A person could be assessed each year on the value of assets owned. The liability could sit there accruing a rate of interest until the house (or other asset) changes ownership through sale or succession.

I think governments around the world have seen what happened to France who went ahead with a wealth tax at a fraction of the 10% Polly Toynbee is advocating and seeing what happened there is a warning.

This argument, along with the "I earned it, so it's state theft" gets trotted out whenever any sort of tax is discussed.

What actually happened? A small number of very wealthy people left France, or pulled their wealth out of French property? Actually I suspect concerns about this are overstated. Of course wealthy people - like all of us - don't want to pay more tax than they have to, but they also like to live in nice surroundings - in well ordered countries with good standards of living - much like France really - and pay the tax, so I expect some actually ended up staying or returning. And if the very wealthy pulled out of French property, well that strikes me as very good news for the rest of the population of France as it makes property more affordable for them. This is in fact a classic example of how, when wealth inequality is high, society becomes structured for the benefit of the very rich and everyone else loses out.

If gambling winnings were taxed then wouldn’t everyone just take up gambling and claim their losses against tax

I believe most or many jurisdictions do tax gambling winnings in the form of some kind of duty and simply don't allow deductions.

I agree, by the way, that a one-off 10% wealth tax would be a daft idea. Polly Toynbee is flying a kite, trying to get people's attention. A rate more like 1% per annum is wha Piketty envisages.

@TheWordWomanIsTaken - Cracking down on tax avoidance is largely an OECD thing and we remain part of that and will do after leaving the EU. The UK tends to be ahead of most of Europe on this - for example we are bringing in a digital services tax which is aimed at google, facebook etc. ahead of the rest of Europe because the rest of Europe are being slow on agreeing an approach. It is more political posturing than an attempt to raise serious revenue though.

Thomas Piketty published a very large book on this subject and won a prize for it

For some reason I find this statement really funny😂😂😂

Surely their talking about the mega rich, but won’t happen with the Tories. Surely this is just an idea being branded about. They should look at all the tax dodgers first.

This is a proposal from Labour, unlikely the Tories will go for it.

Tax on luxury goods. Raise income tax by a small fraction/fairly. Review of existing tax breaks.

You only pay tax on the equity in your house, not the whole house price. Also in nl it only applies to second homes.

That’s not entirely true, in the Netherlands tax is still levied on the equity in your primary residence just at a lower rate than second homes and other assets (box 1 v box 3 taxes).

A lot of European countries have some form of tax on assets, it is seen as so objectionable in the UK simply because it isn’t taxed here and nobody wants to start paying more tax.

The Netherlands, for example, doesn’t tax assets per se, they award a notional income derived from all assets and you pay tax on that.

I think it's inevitable that taxes will go up. We have to pay for all this somehow! It's going to be a tight time.

I'd be happy to contribute a one off something for essentials but they can get to fuck if they think funding the arts is essential! Also, if you have to take on a debt to contribute, that would be bloody ridiculous.

@VettiyaIruken

I think it's inevitable that taxes will go up. We have to pay for all this somehow! It's going to be a tight time.

I'd be happy to contribute a one off something for essentials but they can get to fuck if they think funding the arts is essential! Also, if you have to take on a debt to contribute, that would be bloody ridiculous.

I agree. There are things that would be acceptable to pay more tax for but the arts isn't one of them.

Oh and I wouldn't be happy to contribute a one off as I don't have the money sitting around.

I agree. There are things that would be acceptable to pay more tax for but the arts isn't one of them.

I agree and would add professional sport into it too. It's time for those at the top to pay. There are millionaires and billionaires at the top of the arts, sports, etc., and it's time they put their money where their mouths are. If grass roots arts/sports are so important then let those who make the most money out of them pay for them.

I'm fed up of the sports stars, arts millionaires, "luvvies", personalities, slebs, etc beggaring off to live in tax havens. Everyone loves to whinge about businessmen moving to Cayman Islands or Monacco or wherever, but the likes of Lewis Hamilton, Andrew Lloyd Webber, Shania Twain, David Frost, get away without the same level of critcism.

Did you know that Labour "sweatheart" deals with millionaire athletes so that they didn''t have to pay UK tax when they came to the Olympics? How can that be remotely fair?

David Frost? Is there another one I’ve never heard of? The satirist and journalist has been dead for seven years.

A lot of European countries have some form of tax on assets, it is seen as so objectionable in the UK simply because it isn’t taxed here and nobody wants to start paying more tax.

That's not 100% true.

Most decent people aren't so opposed to paying a bit more tax when they can see it's fair. Fussy creatures we are.

The problem the UK has is that the wealthiest 5% (who by definition are the more greedy and less principled in majority) have the government in their pocket and so can reject any idea where they pay more. Plus they have the ability to simply move their wealth out of sight anyway.

It's not a question of more or less tax. It's a question of fair tax.

Community Charge and Business Rates are to some extent taxes on Property assets, though the systems could do with improvement.

Perhaps it will come.

The tax is not anywhere near 10% of value, which is a fanciful figure thrown in for some reason I don't know.

Community Charge

We all know what happened to that ...

I must have meant Council Tax.

This is state intervention at the most basic level. For it to work it would mean everything everyone does will have to state monitored. Yes, the state knows my tax - they don’t know the details of all my accounts though. If the govt were looking to harvest 10% of my - and your - assets there would have to be a central database of everyone’s assets. After which the person loses control, the government gains. And here is the real kicker, once they have this system in place what would stop it becoming a regular thing? After all, income tax was supposed to be temporary. But it’s not is it ... www.parliament.uk/about/living-heritage/transformingsociety/private-lives/taxation/overview/incometaxbolished/

If you look at how tax has changed over time, in various countries, you will find that government tax takes have become more and more dependent on flat-rate sales taxes such as VAT. From memory, the rate at which VAT is assessed in the UK has doubled since its inception while rates of income tax have generally been in decline.

The problem with this is that the burden of VAT falls disproportionately on poor people because they have less disposable income. They have to pay the same amount of VAT an item they purchase as someone with a hundred times their income (although it may be fairly said that rich people would pay more VAT because they spend more money).

I don't know why there has been a move towards flat-rate sales taxes, but I suspect it could be this: over the last 40-50 years the amount that governments tax and spend has increased quite a lot compared to the value of the economy. This is mostly due to increased spending on health and social security such as pensions (this is why politicians are so keen on immigration - it means more taxpayers to fund pensions for the elderly locals). But income tax liabilities are easy to manipulate, which is why income tax avoidance is such a big thing. In contrast, sales taxes like VAT are a lot easier and cheaper to assess than income taxes. They are just about impossible to dodge unless the payer manipulates the price of the goods of services sold, and they are somewhat easier to collect.

The alternative to a wealth tax isn't, realistically speaking, increased income tax on the wealthy because they are the best placed to dodge it, and dodge it they will. It will be higher VAT, probably imposed on more things, e.g. fruit and vegetables. Just imagine the cost of basics going up by 20%. A lot of people would go under. And while it would probably be easier to dodge wealth tax than VAT, it would probably be a lot harder than dodging income tax.

Because the population of most developed countries is aging, the governments of those countries will need to spend more money just to maintain existing levels of pensions, healthcare and other services. This will have to be done by increased taxation, large-scale immigration (which really just kicks the can down the road) or borrowing - and most developed countries are already heavily in debt.

Oliversmumsarmy

It is, if you pretend Michael Palin's saying it.

"For it to work it would mean everything everyone does will have to state monitored."

only if you believe the improbable suggestion that it a wealth tax will be based on the value of everything everybody owns, including your collection of shoes.

The two largest sectors on the total Wealth owned in UK are property, and Private Pensions.

Neither is easy to hide.

And my husband and I (and my DC) have savings accounts/bonds/Isas with a number of different providers.. it’s not about it being easy to hide. More about a centralised system of monitoring

Like the Land Registry, you mean?

They'd be better off trying to find ways of making big companies pay the proper amount of tax and to tax any money sent out of the country to tax havens.