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.

@user1497207191

"The really wealthy have already moved their assets out of the UK and into tax havens."

But one of their assets they have not moved.

@Baaaahhhhh

"Not true"

it is, actually.

ONS

Biggest wealthy may be in the pensions of nurses, teachers and doctors actually - particularly heads of schools and senior consultants as to generate an annual salary of say £4-0k a year the fund is worth millions - something most people don't have. I suspect the mostly left wing civil servants may not be so keen on a wealth tax if they realise their pension might be reduced to the state pension levels of about £150 a week that most of the rest of us have!

Biggest wealthy may be in the pensions of nurses, teachers and doctors actually

Can't imagine many GPs or headteachers will be happy if their gold plated public sector pension is plundered!

"pensions of nurses, teachers"

generally not.

But a good attempt at a frightener, there.

There isn’t actually a public sector pension fund to tax. Those pensions are just future commitments from the public purse. When they are taxed like any other pension.

There isn’t actually a public sector pension fund to tax. Those pensions are just future commitments from the public purse. When they are taxed like any other pension.

They have a "deemed value" for the lifetime pension limits, so that could be used as a basis for wealth tax. It's completely unfair if a private sector employee loses a chunk of their pension fund but a GP doesn't.

It's completely unfair if a private sector employee loses a chunk of their pension fund but a GP doesn't.

News just in: life ain't fair. What's more, we keep electing people to ensure it's not fair.

As you were.

Yes, they can often draw down a cash lump sum of the pension subject to up to 45% tax at age 55 and thus it becomes an asset that could be subject to the 10% wealth tax.

"Obviously, where that line is drawn is unclear, but it's not going to be Mr and Mrs Smith living in their £420k semi they've owned for 30 years....!"

Not at first, no. But taxes have a habit of creeping to cover those who they were not intended to cover. We are asset rich cash poor, having a valuable house but are on tax credits. Any wealth tax that included primary residences would mean we would have to sell up very fast. A 10% tax on the value of our home is many £000s more than our annual income.

Arent most UK public sector pensions unfunded? Especially the "gold plated" ones I.e. they are paid out of current tax receipts.

If you take a chunk out of that but the deemed value remains to promise teachers, doctors, nurses the same retirement income, all you'd be doing is borrow (alot) from your own children

I defer back to my inheritance tax idea.

@pigletjohn this policy has been proposed by the shadow chancellor. It is a labour policy. It's a shame because Kier Starmer is getting a lot of things right, but this policy makes Labour unelectable.

I'm not really sure what the point of your post was, but it was both patronising and rude, which surprised me, as you are usually polite and reasonable.

Yes, public sector pensions are not ain a separate fund but the individuals can cash them out and could be forced to do so with a wealth tax. Many of those public sector workers and civil servants are in practice richer than a couple with a London house because the value of the pension they can cash in is more than the London house value. If you go after people's homes, cars, rings, shares, savings there is no reason you should leave alone the largest asset many people have - their pension. If they have to pay a lot of tax in cashing out the pension as I did at 55 that's just tough - that's a wealth tax - utterly unfair, socialist and confiscatory.

"the shadow chancellor."

Who is not in government.

This is a problem for our current government, led by Cummings. And it is our current tory chancellor who is expected to find a solution.

It will probably be several years before a Labour government has the task of rectifying the nation's financial problems.

Well how would people pay it? In London, there are Thousands and thousands of quite ordinary semis / terrace houses worth £3-4 million, even though people bought them for £1 million on a mortgage in about 2002 or something. Elderly people might have bought them for a few hundred thousand in the 70s / 80s and just stayed there since. There has been massive house price inflation in huge swathes of London. It doesn’t mean everyone suddenly can find £400,000.

Supposing you bought your council house in an up and coming London area and now it’s worth almost a million? Or you live in a studio worth £500k. It just wouldn’t work.

"Well how would people pay it?"

That depends what the tax is, doesn't it? Which nobody knows.

At the moment you might be paying Council Tax (which is a bit like a sort of property tax) which might amount to 0.5% of the market value of your house. Though if you are very rich, and live in a very big house in a very expensive area, it might be considerably less.

Some would say that very rich people paying lower rates of tax than poorer people is not a very good idea. Others disagree.

Maybe a system will be devised that results in everybody paying an amount that averages around 0.4%. Many people would be quite content with that. Others would disagree. maybe it will be calculated in some different way.

Maybe a tax will be chosen that is based on something which is costly to value, of debatable worth, and can be hidden or moved overseas. I can think of reasons why that would be less suitable.

As yet, any changes to personal taxation are nobbut a twinkle in Rishi's eye, though doubtless Cummings has some strong ideas. Whatever gets proposed will be intended to get another Conservative government returned, and perhaps Rishi will be the next PM unless Cummings acts quickly to depose him.

The changes will not be decided by an opposition party.

@pigletjohn the op asked what we thought of the wealth tax. I replied that it makes Labour unelectable - mainly because Corbynism has not been stamped out.

It doesn't matter who is in power because that was not the question. I do think Rishi will use this as an opportunity to reform pension tax and I think he is right to do so.

Electability of Labour is irrelevant, because the taxation that the Tory government announces over the next months will not be instigated, decided or implemented by the Labour party.

Since the two largest sectors of untaxed private wealth in the country are property and private pensions, it is certain that these are two sectors that deserve to receive serious attention.

What other alternatives would you suggest? Increase income Tax, VAT or NI? A unilateral tax on multinationals and expatriate billionaires?

Er its entirely relevant to the question op asked.

You sound quite aerated. Maybe step away from the thread and calm down.

Pension reform is long overdue.

When you read the first post in this thread, and looked at the link, surely you noticed that it began:

"As Rishi Sunak mulls over his summer statement, there is one solution he could consider that would protect our public services...."

No mention of opposition parties there.

@pigletjohn what was the question the op asked? Because that is what I was answering. Rishi has been under pressure to give an opinion on a wealth tax since Annalise Dodds suggested it on Andrew Marr. This is how government works, that is the job of opposition. But you keep digging chap.

The question was about Rishi introducing a wealth tax.

There are no opposition MPs in government so it is not a question about Labour.

The chancellor has a problem because his government has been spending money like water, ever since he found the plantation of Money Trees in the garden of No. 11.

The Exchequer has less coming in than is going out.

He knows it.

We know it.

There is no more appetite for Tory Austerity.

He knows it.

We know it.

The chancellor is looking at taxation.

We know it

This is not an idea that unexpectedly sprang fully formed from the loins of an opposition politician.

It has been ripening for years.

That wasn't the question and you know it. Really odd responses from you with basic comprehension issues. I hope you are OK.

Since the two largest sectors of untaxed private wealth in the country are property and private pensions, it is certain that these are two sectors that deserve to receive serious attention.

Good idea, let's penalise anyone who owns their own home or has a private pension, that'll encourage people to get on the property ladder and save for their retirement!

Public sector pensions is worth something too and I doubt included in the ons figures since they are unfunded and not technically wealth - possibly worth over £1.7 trillion
www.taxpayersalliance.com/pensions_inequality_press_release