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

And in the 30+ years since no government has been willing to re-do the exercise… can you imagine all the assessors that would be needed to be employed to go round assessing all houses for the purpose of this wealth tax exercise!!

So as far as the Op would see it - some public sector worker say, whose pension is technically worth a lot money and added to that their very average 2/3 bed London maisonette worth 800k.. so they are deemed someone who needs to pay the wealth tax by the 10,000 new tax inspectors suddenly employed or the fancy system the government magics up. The tax is calculated at enormous expense to the government in 2023 to be payable once the person sells or does. They are 55 this year and live another 30 years. In 2063 the £1.5k wealth tax they owed in 2023 is finally due. We have to hope that the solicitor dealing with their estate remembers to check whatever system the £1.5k they owe from 30 years a go is logged on… maybe … (worth about £300 by then of course).

If it’s final salary then you can easily afford to pay tax on it.

Everyone pays tax on pensions, they are delayed salary.

You know income tax was originally introduced to pay for the Napoleonic Wars and was abolished a number of times? And yet, now, it’s here to stay. Once you start these things, they rarely stop.

Only by raising taxes higher on those affluent people ... making them less affluent. That won't entrench inequality - the inequality is already there. Taxation just changes who gets the final say on how money is spent ... it doesn't 'create' money, nor does it destroy it. Just moves it about.

In many ways, having it in the hands of a government that definitely will spend it is better for the economy than having rich people saving it all offshore.

And, having a single-payer system for public goods means the taxpayer has some protection against profit-gouging by unscrupulous companies (see insulin costs in the USA, for example). The trick is identifying which services are better run by the public, and which are better run privately. Private Water - nope. Private Trains - nope. Private supermarkets ... seems OK. Private Health ... seems better sometimes, worse others. Private education ... who knows?

(lobs grenade and retreats for tea)

No point unless some actual strategy to deal with the issues are in place. Just pissing it up the wall.

At an individual level, both the affluent and poor people will be taxed at a level they can afford though. But that will have a far bigger impact on the poor than the affluent.

Problem is - we actually need people to spend to boost the economy. Saving might be viewed as more virtuous, but it's crap for keeping businesses afloat.

Where do you suppose the money for investment in companies comes from? The money building societies lend? The country needs savings and investments too.
Spending money on foreign imports otoh ... helps some sectors but doesn't necessarily grow our economy in the most beneficial way.

It’s quite funny MN is quite a left leaning website that believes in the distribution of wealth. Just… not their own wealth.

Well, by charging rents, you're just replacing a hypothetical tax liability based on wealth to an alternative one based on income. That's my point - no conceptual or moral difference between the two.

I suppose you could argue that you have the right to charge peppercorn rents below the market rate and thereby remain below any income tax threshold ... so you could technically fully avoid any tax (wealth or income) as an owner of multiple properties.

But then see my earlier post about rich people avoiding taxes by not creating any disclosable records of financial transactions liable to taxation. The one advantage of taxing wealth instead of income would be that this would be harder to do. Probably also why so many people instinctively dislike the idea ...

I see what you mean but to me, very wealthy people are generally only very wealthy due to the labours of others. I don’t think such taxes would dampen aspiration, the very wealthy will still be very wealthy after a wealth tax, and much better off than the rest of us. That won’t change.

Well true. A bit like people on the other side saying tax more, more funding, pay me more but someone else is footing the bill.

There’s already a wealth tax on pensions…

Its called the lifetime allowance. Anything above it incurs an additional 25% rate of income tax, or you get hit for 55% if you take it as a lump sum.

Some People don’t realise just how hard that’s going to hit them in a decade or two.

I buy into the idea of applying CGT to all property. That’s because i don’t own any. Same rationale as people who have no assets talk about taxing the rich. Might as well be open about it.

If a real wealth tax came in, the market in trusts, annuities, rentals would expand overnight, for those who wish to make relatively simple maneuvre to avoid it.

I agree OP.
And I'd be massively affected by this.

Quite.

What are you on about?
a final salary scheme just refers to how it’s calculated/built up, not how much it is.

and how do you know they can pay a large tax bill out of a small regular income?

yoh don’t. You’re just saying people don’t deserve their assets

My concern about rent is that it is unearned income.

People hoard wealth and it’s not good for society. I am part of the problem, but accept that higher taxes for people like me are needed.

There we have it
people with wealth (which you haven’t defined) only have it through other people do deserve it to be taken away

Yes that’s exactly what I said. 🙄

There’s an awful lot of very defensive and spiky people on here…

And some economically illiterate ones…

Surely wealth built on the sweat and suppression of others, that couldn’t be achieved without those people, should be taxed - if they’re not going to share their gains.

Jeff Bezoz couldn’t be successful without his work force. The value in his company remains UNTAXED until he sells shares. He’s one of the richest men on earth and his tax bill is proportionately small.

There are many like him.

My final salary pension is the grand sum of £ 3,600 a year. And I do pay tax on it.

My concern about rent is that it is unearned income.

Is it? DH dealt with renting out his mother's house when she had to go into a nursing home. It was actually quite a lot of work for him, ongoing maintenance etc. and barely broke even on it.