Is a wealth tax the only way?

[Cuppasoupmonster]

…of raising capital for proper public service reform and not just sticking plaster ‘solutions’. Just interested to hear others thoughts.

YANBU = yes it is
YABU = no it isn’t

Haha what! You want to discourage saving. You think people should be penalised for saving. You think my parents shouldn’t have saved their money to pay off their mortgage and finally buy their home outright 🤣🤣🤣

Some people are unfortunately poor through no fault of their own. You OP will be poor because you think someone else owes you everything and you take no responsibility.

Saving money isn’t a good thing for society, as it is just sat there and not in circulation.

It's not 'just sat there'. It's in building societies providing mortgages, banks providing finance, invested in companies to allow them to grow.

Yes that’s exactly what I think, word for word 🙄 the paraphrasing on here is something else! Fortunately I’m not poor (nor am I wealthy).

Tax dodging corporations are where the money's at.
Wealthy individuals tend to spend money and that keeps businesses going so I'd be cautious with that. We need to make sure enough people have disposable income to spend.
Again, it's all about large multinational corporations! Heavily taxing wealthy or middle-earning individual is ideological more than anything.

You do know that corporations don't actually exist, don't you. They are a legal fiction. Every corporation has owners - usually shareholders. Sometimes there are several layers of ownership, and the true ownership is disguised or diluted through investment funds, but behind each of them are individual people. People with ISAs, people with pensions, people with investment trusts, people with share options.

Taxing corporations is morally and conceptually no different to taxing people.

Well in many European countries IHT is much higher. It is seen as divisive and anti society, which in many ways it is.

Stamp duty doesn’t exist in US, but property tax is higher - weirdly!

I too will inherit a large estate (c£5m) how lucky am I? Should I be allowed to be this lucky? It certainly won’t benefit anyone apart from my DC and DGC.

If we don’t want higher taxes, we need to stop pretending we are European in service levels, whilst taxing like the US. Give up on our European attitudes and let the market rule. Half of the outraged middle on here may well sink. That’s capitalism for you!

First. Shut the NHS, bring in the market.

Second. Stop funding schools nationally. Reorg school funding so local taxes can be applied so we start funding the schools are kids attend. My kids school will
improve no end.

Third. Stop taxes at the higher rates and stop limiting pension funds to a £1m ceiling.

Cut labour controls so you can hire and fire at will, irrelevant to time served. No statutory minimums.

Cut benefits after 12 weeks. Get a job.

This free market thing is great. We will be booming very soon.

Stamp duty is the very worst tax. Taxing people for moving house? It’s bonkers! People move house for good reasons and we need to encourage them to do so.

and tax dodging corporations? What they are doing is perfectly legal! It will remain perfectly legal until countries all over the world decide together that companies should no longer be able to shift profits to the county with the lowest corporation tax rate. The OECD is doing the work on this right now. Ever heard of Pillar 2 / BEPS? No UK government could legislate to make companies pay more tax without the OECD cooperation. It just doesn’t work like that.

And many are wealthy through hard work, sacrifice and years of dedication.
It wouldn't work. You suggest £1.5m. Many people in the SE have assets above this due to their property values increasing. They haven't got the income to pay a wealth tax. They can't sell up to pay because then they won't be able ti rebuy where they live and work. In any case I very much doubt you are suggesting people have to sell their home to pay a one off tax. Someone with assets if £2m in Hull may indeed have the ability to pay without sacrificing their home. Someone in Wandsworth might not. It's just not feasible to blanket tax people over a certain asset threshold. All assets are not equal

No more ignorant than suggesting that people with money gained it through inheritance or nasty business practices. Truth is both statement are true for some and ridiculous for others.

Exactly. Someone who works and already pays taxes, budgets better and saves more money or invests wisely should be penalised? Why should they pay more just because they are good in financial planning?

Frittering money away on pointless crap is just financial stupidity. Yet I see it with people all the time...then an emergency occurs and they don't have enough savings.

"Wealth tax" is not a realistic, or fair, solution here, not least because in many cases it would amount to double taxation...

You do realise a lot of people you would consider rich, ie high net worth individuals, actually have much of their "wealth" tied up in assets where they cannot get the money out to pay tax on it? You mention pensions for eg. There are severe tax penalties if you are forced to withdraw money from your pension fund before you are 55. And plenty of wealthy people have much of their net worth tied up in their home. What if the only way they can afford to pay your one off huge tax bill is to sell their house?!

People with multiple properties will already be paying income tax on their rental income from said properties in all likelihood. They will definitely pay CGT on any profits if they sell said properties. Income from investments is still income and therefore income tax is payable on it.

Well, my FIL believed this and was unbelievably tight and never frittered. Was obsessed with investing and saving. Then the stock market crashed, he lost a vast percentage and then he died and 40% went in inheritance tax.

I will certainly be spending money on my hobbies, house and holidays — enjoy it while you can.

Errrr, I don’t know, how about growth that’s better than 1% a year. Or better still, not being in recession.

I know, it’s crazy, right? How a bit of economic growth balances the books and automatically raised more tax. But never mind, who needs growth when you can tax your way deeper into a recursion and then ask ‘are wealth taxes the only way’.

Wealth taxes do not work. If you actually stick your head out of Twitter and maybe look at some serious news on past economic policies in different countries, you will see that wealth taxes never work. People can, and do leave. Sure you may hate the rich, but they don’t care much for your hatred when they can just up and leave.

Francois Hollande introduced wealth taxes in 2012 in France and 16,000 millionaires deserted France, taking their taxes with them. Macron came to power and reversed the policy, calling France ‘Cuba without the sun’.

Threads like this make it clear that the reason we are in a mess is because the electorate knows about Love Island than how the economy works. So instead of holding the government to account on the economy, they spout nonsense like wealth taxes.

I agree. Having enough in the bank for a rainy day is sensible, but some people lose perspective about how much they actually need and save endlessly for a future that they never actually get to enjoy. I know too many people who have died relatively young - far better to use your money to enjoy life while you are healthy (within reason).

The problem with this being we already tax “multi billion dollar corporations” - at least those with activities in the uK.

by far the highest pension wealth is in public sector pensions, many of which are unfunded. We could save a huge amount by closing these and making all pensions defined contribution in the public sector.

companies already pay a huge amount of tax in the uK and globally. They also spend money, not least by employing people. International tax is complex but generally we can’t tax all global companies profits in the uK as they pay taxes elsewhere (and some have no connection with the uK at all). We are not the only country in the world you know!

generally we have very many rules to ensure we get our share of international companies profits and they do pay up and finance a great deal of uK government spending. The idea that there are easy tax “loopholes” is an utter myth. There are a great many highly qualified people working in this area ensuring tax is paid by large companies already.

Putting public sector pensions on a more equivalent basis to everyone else might make some people realise just how much they're worth. Tbh it's not just the money that's valuable - it's the certainty. Not having to worry as you see the value of your hard-saved pension funds erode during crises, not having to manage them, worrying about what may happen with the LTA. Of course, it'd be better if everyone could access a decent secure defined benefits pension, but as that's unlikely I wish people would stop blithely proposing yet more attacks on personal pensions.

Yup, 100%. Get rid of defined benefit public sector schemes and use that money to increase public sector wages for those working in the public sector today.

It would also lead to even poorer recruitment/retention in the public sector though. My public sector role pays about 30-40% less than the equivalent private sector (I used to be private sector, so know this for sure, and it would be easy for me to move back across). I've done the maths and worked out that the pension and flexibility makes it worth it, but if the pension was taken away I'd simply leave.

The equitable solution might be for all sectors to be able to accrue a baseline defined benefits pension and then be able to choose to have a personal pension on top. No idea how that would work in practice!

all sectors to be able to accrue a baseline defined benefits pension

This is kind of what NI credits already do, surely?

The university sector has the past year or so downgraded their defined benefits pension scheme to make it no better than the average defined contribution scheme without giving compensatory pay rises. This is why the lecturers are striking.

but it makes sense for universities to divest themselves of the risk of defined benefit schemes which hampers their ability to give reasonable rises to current staff members.

80% of final salary for life, providing you have done the requisite number of years doesn't really seem much of a downgrade.