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

@Clackyheels

I think it's a great idea. Also, I hope he is proposing to identify the huge- billions in profit -business, not the small ones that have struggled, but the supermarkets, amazon etc who have made billions from the pandemic and ensure they are taxed fairly. That is EXACTLY how the deficit should be met.

I agree. Unfortunately, Rishi hates small businesses, so will tax them out of existence (even after excluding 3 million of them from the covid support schemes), and continue letting the likes of Amazon, Starbucks, etc "offshore" their profits in tax havens.

@Musicaldilemma

It is a stupid idea and billions will leave the country overnight and the pound will crash even more. All the super rich have accounts in Switzerland and offshore and will leave or find a way round it. Better to add a bit of extra tax on lots of different types of taxes. Perhaps also capital gains tax (not too high) on main residences if you sell it and don’t reinvest the proceeds within x years into a new house. Wealth taxes are quite hard to administer especially if you don’t have a population already filling in self assessment every year.

I'm glad you raised that.

If you owned a castle, a grouse moor, some forestry, several farms, and a country estate, please explain how you would move them to Switzerland.

They could claw back some furloug money by adding a reasonable monthly tax to workers who benefited from it. Perhaps above a threshold, so that minimum wage workers aren't impacted. People who had been freelancing for 1-2 years before the pandemic got sweet FA. I don't see why they should contribute to the incredibly generous furlough payments. It was the Chancellor who chose to give 80% up to £2.5k. That's £5k per month to a couple who were on £40K each. I agree they should have been helped and jobs kept open, but it's not our fault he made it so different to the £400 per month that UC paid to others.

@sandandseashores

The people who were own furlough support should take on the debt - not those who haven't. Those on furlough need to now pay back the temporary support they've received.

Split the debt up in proportion to the payments received.

If only! That really would be the ideal scenario. I said at the time, all the furlough and business "grants" should have been claimable on the same basis as student loans - you pay a few percent of future income to pay down the debt and then it's written off after say 30 years. As it is, everyone is going to end up paying more tax, which is grossly unfair to those who havn't benefitted from Rishi's scattergun approach to furlough/grants etc, the rules of which have been illogical and unfair and excluded far too many people.

We live in an expensive area.
DH retired. I earn a small amount
Our house is worth a lot.
A wealth tax would mean we would have to sell our house to pay for the tax

@Kazzyhoward "As it is, everyone is going to end up paying more tax"

I think not.

It is very much more likely that the heaviest load would be borne by those with the broadest shoulders.

What would be the point in taxing you 0.5% of your Net Property and Private Pension wealth?

0.5% of a lot of £££ is a fair bit of cash PigletJohn. Am sure it would be tricky to get hold of though.

Do people seriously think the Tory party will tax the wealthy in this way? That is not how they operate. We will all be paying for this, in some form unless we are super wealthy and can avoid it.

It won't affect me so in honesty not arsed. I know that's not the spirit of things and we are supposed to think of everyone else, but meh.

For a lot of people who have paid off their mortgage on their family home, this kind of bill will be unpayable. However, I suppose if the state puts a charge on the property (x% of its current value) it wouldn't kick in till after their death, so maybe not unfair.

In practice it'll be too great an administrative burden to re-value practically every home in the UK - what's more workable is massively reducing the inheritance tax threshold to c.300k. Nobody needs to inherit the wealth their parents accumulated (or indeed inherited themselves). Passing on wealth leads to a perpetual cycle of inequality.

It is very much more likely that the heaviest load would be borne by those with the broadest shoulders.
Sadly I think the very opposite is true.

(And I say that as someone who will inherit a shitload)

I can’t remember the exact details but there was this LSE study a while ago that showed that over £200 billion can be raised by increasing the tax of the highest earners (£500k and plus) by just 1%.

Load of Bollocks!!!

This would ruin so many families in traditional Torrie heartlands, even if they had managed to continue earning through Covid, and so many haven’t.

A 500k property is not wealthy anyway in the much of the South/South East. I don’t think this is the wealth level they’re talking about.

@tilder
If I was lucky enough to have a million-pound pension fund (most people aren't) I wouldn't even notice £5,000 in tax. It would fluctuate in value more than that almost every day.

@Kendodd

It is very much more likely that the heaviest load would be borne by those with the broadest shoulders. Sadly I think the very opposite is true.

You need to start thinking about the practicalities of a wealth tax such as I have described.

My house is worth £500k but I earn £12k max pa - where would I find the money for a £25k tax bill?

@BuggerOffAndGoodDayToYou

My house is worth £500k but I earn £12k max pa - where would I find the money for a £25k tax bill?

You wouldn't.

Your numbers are not realistic.

@PigletJohn - the people in that category tend to remember the 70s and have trusts/investments/cash which can leave swiftly. The really rich are mobile and always have options. They are always aware of the danger of sudden government taxes and have planned accordingly.

You are ignoring the fact that 77% of the wealth lies in the two asset classes I described.

BTW the imaginary country I described is UK in 2018.

Am not saying I disagree with you @PigletJohn. We are no where near the £million mark but could afford to pay more.

I just can't see the Tories going after the wealthy. It's not in their DNA.

@pigletjohn why are they not realistic? If things stay as they are that could be me.

Tilder, a couple with less than a million assets between them wouldn’t be taxed under the proposals anyway.

@PinkSparklyPussyCat

The proposal in the papers a few weeks ago was 0.48% of house value. But it would replace stamp duty and council tax.

@Thewithesarehere

This is rubbish. 1p on ALL tax bands would raise £6-7bn a year. Just adding 1p onto the top band would raise £1.3bn (twitter.com/theifs/status/1181529971954737153?s=21)

You can’t raise £200bn through income tax rises it’s just impossible. Wealth taxes or high tariffs (now mostly ruled out by the brexit deal) would be the only way to raise that sort of money.

Palavah, yes i agree.my mum is in her own home worth over £500 k and has circa £12k income. Lots of people in this situation.

The pandemic debt should be treated like the 2nd world war debt and paid off over decades. We only made the last payment for ww2 debt in 2006 60 years after the war ended so in fact was a debt that all those horrible baby boomers paid.