Proposed Wealth Tax

[BootsieBarnes]

It's been discussed in the press that the Chancellor is considering a one-off wealth tax of 5% on assets over £500k. Allegedly this is being considered as part of the March budget to make a dent in the huge Covid debt the UK is facing.

So in real terms that would be a £25k tax bill for someone who has assets valued at £500k, such as property.

What do you think about this? would your family be able to swallow a tax bill that size?

I'm not doing any research, I just read that and thought about the impact it would have on families living in houses in that price bracket.

I've put on voting as well for interest. I'm not actually sure where I stand on this as I can see both sides, so this is just an arbitrary allocation just for voting.

YABU - people with assets that big should pay

YANBU - that would be unfair

Trouble is they’ve painted themselves into a corner with the manifesto promise not to raise income tax, VAT and CGT. All the ways they could use to raise money are sure fire vote losers.

@DynamoKev

I'd also look at taxing SUV ownership Eh? They are already highly taxed.

A lot are already based on the same chassis as other non SUV cars. A lot of them aren't 4wd so have the same manufacture, and running costs of the non SUV model just a different shape. The shape and design was also born out of the need for room for child car seats as well as the fashion and preference for a higher driving position.

If you drive a luxury gas guzzler you do already pay more in fuel duty, raising that would also mean high mile commuters have to pay more (some of which will be poor and unable to replace their car or journey). They have raised the initial road license on these vehicles from first registration.

Wealth creators flee taking their assets with them
They do, which means that the wealthy always get to keep their wealth, wealth and power becomes increasingly concentrated at the top, however this is harmful for society as a whole should we just say 'oh well it's inevitable there's nothing we can do'
Is the answer not for the countries to to liaise and co-ordinate such that the wealthy cannot evade proper accountability?

@VinylDetective

Trouble is they’ve painted themselves into a corner with the manifesto promise not to raise income tax, VAT and CGT. All the ways they could use to raise money are sure fire vote losers.

Note they've not promised not to increase/extend national insurance!

One of the fairest ways to raise revenue is to extend NIC to ALL income, i.e. including pensions, dividends, rental income, investment income, etc., so that everyone pays it, not just workers. If you apply the same rules for pensions, those with small pensions would be excluded (and rightly so), so as part time workers with small incomes don't pay NIC. It's a travesty that people with the same income pay different amounts of "tax" - a worker on £50k pays a shed load of NIC that a pensioner on £50k doesn't, nor does a serial BTL landlord with £50k income or an investor with £50k of dividends.

Huge amounts of revenue could be raised from those who've not been hit by tax raids in the past decade or so, i.e. those who've not suffered the increases in NIC, not suffered student loan repayments, not suffered workplace pension deductions, not suffered child benefit clawback, etc.

Workers on higher than average incomes have been hit left, right and centre for the past decade or two, and it's completely unfair to hit them again, when non-workers are enjoying relatively low levels of tax.

@o8O8O8o

Wealth creators flee taking their assets with them They do, which means that the wealthy always get to keep their wealth, wealth and power becomes increasingly concentrated at the top, however this is harmful for society as a whole should we just say 'oh well it's inevitable there's nothing we can do' Is the answer not for the countries to to liaise and co-ordinate such that the wealthy cannot evade proper accountability?

Many countries have been doing exactly that for the last few years.

Trouble is that the tax haven countries aren't really interested as they benefit from being a tax haven and aren't going to kill the golden goose - many tax havens would be nothing without their tax haven status and the millionaires/billionaires who flock to live and/or base their businesses there.

@DynamoKev

I'd also look at taxing SUV ownership Eh? They are already highly taxed.

There's a lot of tax avoidance re the use of crew cab pick up trucks which are classed officially as vans. That means businesses can buy them, reclaim the VAT, claim full tax relief on the purchase costs, little or no benefits in kind for private use. Maybe acceptable for the likes of tradesmen, builders, etc. who "need" a pick up truck. But NOT justifiable for business owners who don't actually "need" a pick up truck, such as office based consultants, accountants, solicitors, estate agents, nor those who may sometimes use it for goods, but who could just as easily use their car boot, such as ebay and other internet sellers, shops, cafes, guest houses, etc. Not only is shed loads of tax being given away due to sloppy rules, it's also increasing pollution, road wear and tear, etc etc. Such an easy rule/law to change to stop the abuse/avoidance.

aren't going to kill the golden goose
Yes I should have seen the fatal flaw in that plan😖
It must be possible to bring some sanctions to bear on tax haven countries though...were it not for the fact that the people making the rules have a vested interest in preserving the status quo😖
There must be some way to eat the rich? 😳

@o8O8O8o

aren't going to kill the golden goose Yes I should have seen the fatal flaw in that plan😖 It must be possible to bring some sanctions to bear on tax haven countries though...were it not for the fact that the people making the rules have a vested interest in preserving the status quo😖 There must be some way to eat the rich? 😳

Unfortunately, govts seem to encourage/support tax havens rather than sanction them.

Just look at how the UK govt "supports" Gibraltar, Jersey and Isle of Man.

Other govt's "support" the Cayman Islands, Panama.

The EU "supports" low taxes in Switzerland and Republic of Ireland.

One of the fairest ways to raise revenue is to extend NIC to ALL income, i.e. including pensions, dividends, rental income, investment income, etc., so that everyone pays it, not just workers. If you apply the same rules for pensions, those with small pensions would be excluded (and rightly so), so as part time workers with small incomes don't pay NIC. It's a travesty that people with the same income pay different amounts of "tax" - a worker on £50k pays a shed load of NIC that a pensioner on £50k doesn't, nor does a serial BTL landlord with £50k income or an investor with £50k of dividends.

Much better to scrap NI and raise the money via income and capital gains taxes. Also align dividend taxation with regular income tax. Save millions in complexity and administration. It won't happen because the income tax rates (despite being the actual rate people are paying now) would be scary and unpopular.

The tax/NI system is ridiculously over complex.

House prices can be roughly gauged but how would you value (and therefore tax) other assets that would contribute to someones overall wealth. Some things will appreciate in value some things will depreciate... (I'm thinking of stuff like cars, furnishings, fine art, expensive wine collections, antiques, watches, jewellery, possibly pets or livestock...etc)

BTL have seen an increase in tax for the past 4 years! It is such now that if you happen to be over the 40% threshold and still have the mortgage to pay, you are likely not making any profit at all. So where is the extra tax going to come from?

You cannot expect ppl to fork out cash when so many people are struggling and when the government have done such a sloppy job with the finances!

With the billions the gov’t has wasted on

• useless PPE
• test and trace system that does not trace
• Brexit $$$ cockups

I’m sure there are others...

This is aside from the fact that THE EXCLUDED in particular the self employed have lost their incomes, their careers, their self esteem.

@Exhausteddog

House prices can be roughly gauged but how would you value (and therefore tax) other assets that would contribute to someones overall wealth. Some things will appreciate in value some things will depreciate... (I'm thinking of stuff like cars, furnishings, fine art, expensive wine collections, antiques, watches, jewellery, possibly pets or livestock...etc)

And how would they know about some assets? Would people really declare jewellery or watches for example?

Wealth creators flee taking their assets with them

so they say.

Where will they go?

A country with a fairly honest police force, legal system and government so they probably won't be robbed, assassinated or abducted by the government or gangsters (if different).

A country with good enough health systems that their domestic servants and bodyguards probably won't pass on TB or polio

A country with world-class fashion houses, art galleries and restaurants to keep their wives and mistresses happy, and schools for their children

A country with good air transport links, and trustworthy engineers and air traffic control.

A country with safe roads

A country with a fire service that will put your castle out if it catches fire

A country with a bunch of other billionaires who share your world view

A country will a ready supply of world-class hookers

Some of those needs are incompatible with countries that don't charge taxes and don't trouble criminals.

@PigletJohn

Wealth creators flee taking their assets with them

so they say.

Where will they go?

A country with a fairly honest police force, legal system and government so they probably won't be robbed, assassinated or abducted by the government or gangsters (if different).

A country with good enough health systems that their domestic servants and bodyguards probably won't pass on TB or polio

A country with world-class fashion houses, art galleries and restaurants to keep their wives and mistresses happy, and schools for their children

A country with good air transport links, and trustworthy engineers and air traffic control.

A country with safe roads

A country with a fire service that will put your castle out if it catches fire

A country with a bunch of other billionaires who share your world view

A country will a ready supply of world-class hookers

Some of those needs are incompatible with countries that don't charge taxes and don't trouble criminals.

Plenty of them in Switzerland, Cayman Islands, Isle of Man, Gibraltar, Panama, Monaco, Lichtenstein.

Lewis Hamilton, Shania Twain, David Frost, Nigel Mansell, Richard Branson, Philip Green, Michael Caine, etc etc.

And how would they know about some assets? Would people really declare jewellery or watches for example?

That's what I mean, it would be a lot harder to assess in terms of possessions.

Lewis Hamilton, Shania Twain, David Frost, Nigel Mansell, Richard Branson, Philip Green, Michael Caine, etc etc.
So they've all fucked already then - especially David Frost who died in 2013.

Isle of Man, Gibraltar, Panama?

Tell me more about these world class fashion houses, art galleries, restaurants and schools.

@PigletJohn

Isle of Man, Gibraltar, Panama?

Tell me more about these world class fashion houses, art galleries, restaurants and schools.

They don't actually "live" there all the time. They carefully plan their trips to avoid being in any other country long enough to become tax resident there, particularly their original "home" country. Nothing stopping any tax exiles to have a few days in Paris any time they like, or New York, or Dubai or whatever they fancy. Lewis Hamilton doesn't have to do all his shopping in Monaco! A few weeks in country A, a few weeks in country B, and so it goes on - they need to spend relatively little time in the tax haven itself!

Isle of Man and Gibraltar? You can walk round both of them in an afternoon!

I reckon Rishi is going to wait abit to find out how quickly economy semi bounces back after vaccinations start to make things better... and how much battering the economy takes from Brexit.

My guess is some minor reforms this budget... and save the radical ones till next year.

500k is a fairly low amount if speaking strictly assets, not bragging by the way I have fuck all!
I think a 25k bill when all that money is tied up could ruin some people. I do think their should be a one off wealth tax though, 6 people in the UK own as much ‘wealth’ as 13 million people. That’s an unspendable amount of money. So yes if they need to tax this money back why should the poor be the ones that pay it back when the rich could do this easily.

If the chancellor does go ahead with a wealth tax, he'll have to put his money where his mouth is, his own bill would be pretty monstrous!