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.

Anyone who thinks this idea is daft ought to consider what Thomas Piketty the Nobel laureate economist has to say.

And I would say this to those of you that own houses. Over the last ten years, their value increase has probably been more than your income. So, you have become far more wealthy than your colleagues and friends just because you own a house and they don't.

How is this fair?

He would add that we have to tax in this way to prevent the world from dividing into haves and have-nots, with all the instability that brings. You think the middle class is under pressure? You think the rich are too rich? It was much worse before the wars, and it will probably get like that again without counter-measures. You really don't think that 50 years from now we could be back to palaces and slums? Why not?

It wouldn't mean cash payments each year. For example, payments could be deferred until the house is sold. Perfectly practical.

And, tbh, a hell of a lot simpler than income tax.

*And I would say this to those of you that own houses. Over the last ten years, their value increase has probably been more than your income. So, you have become far more wealthy than your colleagues and friends just because you own a house and they don't.

How is this fair*

Well he hasn’t been to some parts of the UK that haven’t ever recovered from the 2008 recession and are in Negative Equity still.

Why should they be taxed on a £50,000 house when the mortgage is £100,000.

Thomas Piketty might be a Nobel laureate but he obviously hasn’t looked at the property market in some areas of the UK

@raella the older generation have already paid though , how do you think debts of 2 world wars were paid

@raella reAding through your threads do you own a home ? My parents sold and downsized so they have something to live off as pension agrs moving with little notice left them short
So they have a little savings , but its money to live off so they dont end ip relying on state hand outs , if they were to loose 10% i would tell them to go blow the lot
Lets go after the big boys and close tax loops etc first before going after the everyday people
Im saving for a mortgage so again if they wanted 10% then i would spend the lot on a holiday
Im happy to pay extra tax on wages but not a lump sum

@raella of course all will pay towards debt in some way , vat goes to treasury , duty hikes , council tax hikes etc etc
Everyday you buy something and pay a tax to the goverment
Pensioners get taxed on private pensions , many still work as they have to . I really hate it when someone says lets make the pensioners pay as though there are all living in huge mansions , ( im not a pensioner either )

A once-in-a-lifetime windfall tax

It won't be once in a lifetime. If the government does it once, it will do it again and again, any time they think it won't cost them votes.

We were taxed when we earned money. Taxed when we spent it. And now Ms Toynbee wants us to be taxed AGAIN.

that was if main homes and pensions were excluded – omitting the heftiest part of the country’s wealth.

I'm 33, have bugger all for a pension fund, and home ownership is a decade off. I still think it would be the lowest of the low moves for the government to plunder people's pension funds and force homeowners into borrowing to pay a tax bill.

As mentioned above, a tax on all wealth is punishing the prudent, the savers and investers. The very people who, by virtue of having savings, will not be adding to the benefits bill if they end up out of work. The people who for the last decade have been kicked by interest rates below inflation, a hangover from the late noughties recession when government policy became to promote borrowing and spending to prop up the economy and the savers can go to hell.

In the long run, such a wealth tax will give a severe disincentive to save. Why bother if the government will just help itself when it feels like it?

And to add to it all. The current government financial situation, and expected recession, was a choice. A choice made to save lives, a choice perhaps the lesser of two evils, but a choice nonetheless.

some people on MN realy hate older people, we struggled to afford to buy a house, no free child care, no top up benifits. No car, no holidays, no £5 coffee on the way to work. But hey we had it easy. Piss off!

@Oliversmumsarmy

In your example there wouldn't be a tax liability because the person (assuming she / he had no other property) had wealth of -£50k, ie, no wealth to tax.

The logic of a wealth tax is simple. Assets rise over time and concentrate into fewer and fewer hands. This means over time, those who own them accrue wealth in an amount that is completely out of proportion to the work they do or how good they are at savings.

This is, furthermore, very bad for society as societies where most people are very poor and few people are rich tend to be manipulated by the rich few, who tend to believe they genuinely deserve all that wealth. Saying "I deserve my property portfolio because I don't buy lattes" is a classic example of this. The maths shows that no amount of foregone lattes will pay for a house.

We already see how the very rich can control society, ie, by affecting the economy through investment decisions, controlling the media, influencing government decisions and running everything (business, law, governance) by paying for superior education than state schools provide.

A wealth tax ensures that the wealth in a society can be sufficiently fairly spread to allow everyone a chance to excel if they try.

Theres no reason why the rich should be faced with the burden any more than the rest of society. Is their labour worth less for some reason? Its their money they earned. Its actually prob not the worst idea to put 10% or whatever on property, it needs to be paid back somehow.

@rosiejaune

YABU - you obviously haven't read the article carefully. Clearly they are not going to demand 10% of the value of the average middle-class person's house.

Second homes, sure. But people shouldn't have those anyway, in general. No doubt half of the people on here are "accidental landlords" though and would object.

It is a great idea; probably one of the most equalising policies ever, if done well.

Theres nothing good about equalising 'policies' equality should be earned.

Erm, you know the retired folk have previously worked and paid tax right?

I thought the wealthiest people often didn't pay income tax?

Because for most people their personal wealth has been gained from their salary or business profits and therefore already taxed once.

I also thought people who were wealthy tended to inherit it?

I would also think that the argument around higher taxes & making people leave the country is more valid for working tax payers. A 35 yr old doctor earning 70k is surely far more likely to leave & earn elsewhere than a 70 yo with a pension & a expensive house.

Raella. You do realise that you don't stop paying tax once you retire? DH and I both now retired, still paying tax. MIL died last year at 95, still paying tax. My Dad died at 92, still paying tax and nearly £4,000 a month for his care in a dementia home.

Also, on the subject of house prices. We have lived in our home for 40 years. We have had no control over its value over that time.

My pay has been cut (by enforced reduction of hours) as my school can no longer afford to pay me for 25 hours per week (I’m not the only one) after budget cuts and increased costs...... can I pay a reduced amount on my “wealth” or do I pull my DD out of uni and sell my home?

@osprey24 It’s not about hating older people, it’s about wanting everyone to share the load of thIs monumental bill. The situation we find the country in now is hardly commonplace and hasn’t occurred before so isn’t comparable to the situation when you bought your house. No one is saying nag you bad things easy.. believe it or not people still don’t have it easy. Many young people struggle just the same as you did to buy a house (without top up benefits or free childcare or £5 coffees - certainly we don’t benefit from those things). Why should those young people have a hug tax hike on their salaries and make it harder still to pay their mortgages whilst their parents sit pretty in their paid-off house that rises in value more each year than their children even earn. It’s wholly unfair. We all need to be on this paying it off together.

@ConcernedAuntie You dl realise that you nag people have all of that ahead of them too? They probably will have to work for even longer, receive even less and be paying higher care fees than you do now too. That’s the reality. Noon is saying it’s your fault that your home will possibly have gathered a LOT of value into those years. What I’m saying is that it’s fair to tax you on it if you’re going to hike tax on early money too. My parents for example have a house worth lore than 2000% of what they paid for it. It’s money that’s has never been taxed. They have a huge private pension and lots of savings and consequently could afford to pay tlwards this bill. They should be paying a percentage of their wealth the same way as younger working people will pay a huge amount in tax from their wages too.

@Notfeelinggreattoday Yes we do own a house, yes.

It's theft

France has a Wealth Tax

Considering the Guardian are not above squirrelling their own tax away, I did grin wryly at that!

I have concluded that more taxation is rarely the answer. It may be an easy answer, an easy response to the age old ‘it’s-not-fair’ that pops up on here regularly, but it just doesn’t work. It creates resentment, divisions and actually stifles ambition.

If you've paid tax on earnings and paid stamp duty etc, then I don't see that the govt has any moral right to re tax you just because your house has gone up in value. Seems to me that any bit of good fortune a person enjoys in this country, some fucker comes along and thinks they have a right to steal it from you.
I say this as a person who does not own a massively valuable house.
Everyone who's paid a mortgage has paid interest to the lender, who is takes by govt on their profits. There comes a point where you just have to let people be and enjoy what they have already paid for - for some people that might be the ability to leave their kids a house.
DH and I are already helping to support our adult kids because they aren't in a financial position to be fully independent. Eventually, they will be earning enough to contribute more in tax than they currently do, so we consider that we are already doing our bit to pay into society. Fucked if I'm going to borrow more money on my mortgage because the govt wants to spunk it on the arts. I don't give a shit about the arts - if the wealthy want them, they can pay for it. Taxing the population to the hilt will make the arts inaccessible to most anyway.

Actually, it's not so stupid.

A one off tax for wealth above a certain threshold would mean that the government debt accrued via this pandemic could be paid off much faster, costing the country far less in the long term.

There are people working very hard in HMRC looking at all the options, it would be surprising if this were not one of them.

uK got offered higher taxes - in the LibDem manifesto. Do we have a Libdem government? No.

almost no-one, despite their waving banners, is actually principled enough to vote for higher income tax which is what we need. Higher VAT is probably coming.

I’ve just sold my house for £100k more than I paid for it 8 years ago. It went up by more than 50%. True it’s all going on a hefty deposit for a different house, but that’s not money I’ve earned. It’s not unreasonable to pay tax on that (not that I particularly want to!)

I think perhaps a one-off tax on wealth over a certain amount (say £500k ish) could work, if it was done properly. I think pensions should be exempt though. Or at least up to a certain amount.

I do think wealth should be taxed, not just income.

@Bringonspring

Crazy idea, I’d be on the first plane to a tax haven

Get in the queue! 😂

Already on it! :)

I'm not happy about this at all. It would mean that someone with a £800,000 house with a mortgage wouldn't pay but someone with a £200,000 house without a mortgage would. That's not fair. I have a cheaper house than I could have perhaps afforded because I wanted to get the mortgage paid off asap.

Increasing income tax is fine. IHT is fine. Tax on second homes is fine. And sorting out the tax avoiders is fine.