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.

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!

You think tax is a punishment?

I pay Council Tax on my house. Why not? Does it discourage people from having houses?

@PigletJohn. This is the original post. HTH

"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."

I also think that a tax on all possessions is a bad idea; and a 10% rate is ridiculously high because the amount of untaxed wealth in the country is so stupendously huge.

However I am willing to consider that a country spending money faster than it comes in needs to do something about it.

But the article is quite clearly about tax changes under consideration by our current Tory chancellor.

It quite clearly isn't. It is Polly Toynbee suggesting he could consider the wealth tax. That would be the wealth tax proposed by Annalise Dodds the shadow chancellor on Andrew Marr.

The op asked what we thought about it. I think it is a terrible idea and one that shows Corbynism has not yet died a death. Until it does Labour is unelectable. That is my opinion.

Rishi could take any number of routes, I think he will remove the tax rebate on money flowing into pensions, the £40k limit is bonkers and only benefits the very wealthy. I think he will reduce it to £10k, after that you can still pay in but it will be taxed.

I don't think there will be taxes on wealth already acquired.

I hope he will also increase taxs on overseas property buyers. Or create zones where they can purchase like Switzerland.

Not just Polly Toynbee.

"Premature fiscal retrenchment would be unwise. Mr Sunak has at least 18 months to work out a programme to repair the public finances. Raising taxes rather than cutting spending should be the main tactic. There is little public appetite for further cuts after a decade of austerity. An ageing society will only increase the demands on the health and social care services.

Eventually Mr Sunak should set out a package of tax reforms, grasping the nettle and tackling many of the most pressing distortions and injustices in how the British state funds itself. The principle should be to broaden the tax base and to develop a more modern system of taxation; environmental taxes and an overhaul of Britain’s property taxes should be considered. Smart reforms of the tax system could help the economy grow as well as reduce borrowing. Corporate ruses to shift profits artificially into tax havens should also be tackled, including via the currently frozen international efforts to develop a system of taxing the profits of digital companies."

FT

Yeah, you need to work on your comprehension skills.

I wouldn't mind being taxed an extra £100. However I don't think the scheme would work because the people who would owe enough money to make a difference would find a loophole so they didn't have to pay.

@cosycatsocks

Yeah, you need to work on your comprehension skills.

You need to work on your rudeness.

I hope he will also increase taxs on overseas property buyers.
I agree Cosy, especially when properties are left empty for years.

@alsohuman actually I've been waiting for an apology from @pigletjohn who gave a rude and patronising response to my initial post. None has been forthcoming and he seems intent on trying to start an argument where there is none.

Your post is pretty hypocritical BTW.

One suggestion - and the news items are just various people "flying kites" at present (as Sunak today has apparently talked about much nicer ideas - lower taxes and free trade zones in the UK) is as in Norway - anyone with a house or assets over £126k pays 0.85% a year

"Mr Carden’s remarks have been seized on by the Conservative Party, which claims that Labour is eyeing the system in operation in Norway – where everyone with savings and property worth more than £126,000 is hit with an annual charge of 0.85 per cent above that amount. Under the scheme, even the value of assets such as cars and furniture are taken into account when calculating the levy."
If that were the scheme in the UK 6m people would pay it.

www.dailymail.co.uk/news/article-8513933/Six-million-face-annual-2-500-bills-Labours-left-wing-wins-battle-introduce-wealth-tax.html

So that would mean someone with a £1m house in London would pay £8500 a year but the same house in the NE where I am from might pay zero even though their costs may be a lot lower in the NE and a lot higher in London.

"If"

even though their costs may be a lot lower in the NE and a lot higher in London

With a corresponding difference in income.

@PigletJohn

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!

You think tax is a punishment?

I pay Council Tax on my house. Why not? Does it discourage people from having houses?

Guess what, I pay council tax as well. Funny that.

Tax in general isn't a punishment, however if it's on the value of a property or a pension (why bother saving?) then yes it is. It's punishing people for owning or saving.

If that were the scheme in the UK 6m people would pay it

Very roughly 10% of the population. Sounds fair to me then if that's what 90% want. Perfect example of democracy in action.

"why bother saving"

Because having plenty of money, or a big house, and paying some tax on it, is better than the alternative.

So that would mean someone with a £1m house in London would pay £8500 a year but the same house in the NE where I am from might pay zero even though their costs may be a lot lower in the NE and a lot higher in London.

Well I wonder if that sort of tax would then shift the balance and stop property being seen as an asset and instead be seen as a home. Nesting, not investing.
And yes, I would be subject to it (about £8,500) before anyone starts saying I'm just jealous.

I think inheritance tax should be raised massively, the dead don't need their money and why should we protect money grabbing adult children from paying tax on a massive windfall they did nothing to deserve.

And again, yes I would be subject to it as would my children.

IHT is taxing money already taxed at least once. It’s insane as it is, let alone the idea of raising it!

IHT is taxing money already taxed at least once.

So is VAT and stamp duty and council tax.

Every tax is on previously taxed money.

IHT is taxing money already taxed at least once.

And besides, the above is not even true. Most of it comes from the insane increase in property values. There is no tax on that.

I have always been interested in the N/S costs and tax divide as I am from the NE and live in London. Full time childcare costs can be double in inner London - £22k per baby so about £44k for full time in after tax income. rent might well be £2k a month or even £3k a month. My mortgage was £90k interest only at one point each year!!!!! For those rich enough to pay school fees as my silblings and I are/were I paid £18k a year in London and my sibling in Yorkshire I think closer to £10k so a vast difference.

So lots of people in London won't have that much higher pay in many jobs - in fact my teacher husband's school had to offer school flats even in the 1980s just to attract teachers to the job as London rents and house prices were much much higher than the tiny extra London "weighting".

So you could argue that Londoners have had to pay a lot more for the same house they could get in NE England for a fraction of the cost so if they have much less spare income as childcare etc is so much higher too should they pay extra wealth taxes just on equity in or the gross value of their home when they are less not better off? Why not impose taxes based on people#s net incomes around the country after they have paid for their housing including rents and their full time childcare? That might be fairer.

The equity in houses varies. We made losses on 3 properties in London in the 1990s crash. I doubt Labour wll be handing me a cheque for those capital losses nor let me set them against any new wealth tax on this house (all of the equity in this house by the way has been taxed at at least 40% already due to my divorce). Anyway there are so many different situations. My neighbour wants to leave her sons her house and is not interested in equity release despite no carpets etc and I expect Labour or young families might want her driven from her home in her 80s to pay high taxes as her house has gone up a fair bit since the 1970s.

" I doubt Labour wll be handing me a cheque for those capital losses nor let me set them against any new wealth tax on this house "

Since we have a Conservative government and a Conservative chancellor, any changes in taxes over the next few years will not be coming from Labour.

Who do you think will be preparing the proposals to increase the government's income to cover the extra costs of Covid and Brexit??

As someone with experience in this field this is beyond naive. It’s unworkable for reason many have mention here, it’s also going to be difficult and expensive to calculate unless they’re planing to rely on self assessment.

There are lots of reforms that should be made to make the tax system fairer. In particular CGT on non-shares based investments should be raised significantly (because they represent gains made on hoarding basically, productive investments obvious are different) and the exemption for main residences should be scrapped (best way to prevent property speculation and hoarding making the market fit for purpose once again, hopefully). But a general wealth tax is going to be administratively too difficult.