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

I know this would never happen (much like a Tory wealth tax) but I think a global wealth tax would be great. Every government in the world imposed a one off wealth tax to pay for covid. This would eliminate asset shifting because there would be no point. All governments would be able to raise money and the rich couldn't avoid.
I know it would never happen, governments would never stand together to stand up to the super rich as they're too busy bending over backwards to please them and am sure it's also impractical.

It would really stick in my craw paying a tax like this so the Tories can siphon it off to their mates or to pay for sodding Brexit. I might actually do a little sick. Maybe they can tell me which of their cronies (sp?) house I'll be paying for and I can have a little plaque on the outside.

I own property which is let. Due to redundancy it is the only income we have. We are not eligible for any benefit because we own property. I cannot pay this tax. I think I will just give up.

@RMRM

It would really stick in my craw paying a tax like this so the Tories can siphon it off to their mates or to pay for sodding Brexit. I might actually do a little sick. Maybe they can tell me which of their cronies (sp?) house I'll be paying for and I can have a little plaque on the outside.

Did you miss the fact we have a pandemic to pay for?

@PigletJohn
You wouldn't. Your numbers are not realistic.

Why not? I bought my house 33 years ago, now have no mortgage and work part time.

No, I clearly didn't. I am saying I don't expect that the Tories will actually spend the money on that.

[quote Wenolikeexplodeythings]@WowIlikereallyhateyou

No. Some economists are expecting Sunak to introduce this entirely new wealth tax in his March budget. You'd pay 5% on assets if 500K or more.
The issue being discussed is how to get it as it cant be part of income tax, capital gains tax or inheritance tax so it will require a wholeload of new administration to sort it out.[/quote]

That's it, @Wenolikeexplodeythings - I would personally be happy to pay a tax like this for the good of the whole - but I'd be very unwilling to support a payment that got almost negated by bad management and administration.

@WowIlikereallyhateyou

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.

Wow, if you insist on using the £500k made-up figure, you would catch 70% of the nation's wealth.

I'm no good at arithmetic, so you can calculate this for me.

The total wealth was £14.6 trillion in 2018.

If you want to raise £200billion tax, on 70% of the wealth, what would the tax rate percentage need to be?

@Proudboomer - I agree with you, first the pandemic needs to end, then we need to rebuild our economy and only after that should we think about extra taxation. If you tax people and many normal ones at that (if it is pensions and houses) then they won’t spend as much. Also, you can’t be seen to be taxing the elderly for the pandemic, it just won’t work politically speaking.

Pigletjohn, £500k is the amount previously suggested by WTC think tank, discussed in all of their papers,not made up or insisted.

@Marinaloves
@Pukkatea
Well he does. He’s got a house with a probably large tax free amount of profit in it.
Only most people don’t ever want to access the profit until they’re old. Or they want to pass it on - they don’t want to use it to pay to help society - does that sound fair.

I could of coasted along in my job rather than taking a step up ,with all the comitment and stress that goes with it .Generally work 6 days a week. Of course happy to pay normal tax like everyone else but I choses to take the extra responsibilty , stress long hours, shit that goes with being in management and work 6 days a week instead of 5 for finical rewards for myself not to pay extra lump sums for society thats what I pay my normal tax for .

Anyway it’ll never happen
Tory voters in general never want to pay for the feckless poor

Nearly everyone on MN supports Labour, so there will be no problem, surely?!

I think people are reading this incorrectly, it will be assets above 500k ie nobody is taxed on the first 500k otherwise it would be very unfair.

@Marinaloves

You’ve changed your tune!

If it encouraged people to spend some of their wealth that wouldn’t be a bad thing for the country either!

PigletJohn the point made by Wow is correct, it isn't a made up figure. The summary by KPMG outlines the basics of the proposal.

home.kpmg/uk/en/home/insights/2020/12/tmd-wealth-tax-commission-final-report-recommends-a-one-off-wealth-tax.html

What the helll? WHY should my widowed mum whose house is worth over 500k have to suddenly pay a random tax bill that the government instigates. My parents worked hard all their lives, saving and doing everything right. My Dad died last year and she is living fine on what they worked towards but something like that would knock her for 6. No, there would be an uprising, no way would the nation accept that.
Someone mentioned that it would only affect a small number of people, no it wouldn't it would be a lot of hardworking but no means rich people that would be affected.

Thanks. I was particularly interested in the bit that says:

"What will the tax rate be?

The WTC are very clear that it is not setting rates or thresholds – this is a decision for politicians. However, the report includes illustrative figures for a one-off rate in the region of zero to 15 percent.

By way of illustration, the WTC suggest that a five percent (one percent per annum over five years) one-off rate applied along the lines proposed, has the potential to raise £260 billion."

Though I haven't yet found their figures on the total value of assets they postulate taxing.

Who even are the 'Wealth Tax Commission'?!

Who appointed them?

Did they 'commission' themselves?

@suggestionsplease1

Who even are the 'Wealth Tax Commission'?!

Who appointed them?

Did they 'commission' themselves?

LSE and Warwick university thinktank.

@Spotsandstars

What the helll? WHY should my widowed mum whose house is worth over 500k have to suddenly pay a random tax bill that the government instigates. My parents worked hard all their lives, saving and doing everything right. My Dad died last year and she is living fine on what they worked towards but something like that would knock her for 6. No, there would be an uprising, no way would the nation accept that. Someone mentioned that it would only affect a small number of people, no it wouldn't it would be a lot of hardworking but no means rich people that would be affected.

Im afraid the fact is that there is a whole generation that have significantly more wealth than any subsequent generation has made or will be able to as a result of the way uk property prices and the stock market have risen over the past 50 years.

I don't doubt your parents worked and saved hard. But young people working just as hard and saving just as hard just don't have a hope of doing as well as (y)our parents' generation.

I note the suggestion that tax would be charged on assets exceeding £500thousand per individual if £1million per couple.

BTW I found my figures in

www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2016tomarch2018#aggregate-total-wealth-in-great-britain

Especially table 1 and figure 5.

The “worked hard all my life” argument is pretty weak. What do you think young people are doing? But no matter how hard they work they will never own a house worth that much unless they inherit it (or a large sum to get them started).

Her mother is sitting on paper profit, it is meaningless until she sells and banks that profit.