To believe that if Labour wins we wont be hit with 98% taxes?

[DistinguishedSocialCommentator]

And the other day one of the Labour lot let slip taxing pensioner more than others

A bit of Labour what they say and do - the 98% tax

You an Google the 98% tax if you dont want to read the link

AIBU not to trust the Labour lot just like I dont trust the Tories

https://www.adamjwalker.co.uk/business/are-you-ready-for-labours-tax-bombs/

You're assuming that everyone who is wealthy and owns expensive property got there by dint of their own hard work. This isn't the case; much of it was simply inherited, no effort required.

Or acquired through house price inflation. Our house is currently valued at four times what we paid for it, we didn’t work for a penny of that.

@DistinguishedSocialCommentator ,

Unless you are actually arguing against tax, the only question is how much to take and the fairest way of taking it.

Throughout this, you are making the assumption that wealth is a measure of talent and ambition and that tax is a random unfair thing that thwarts this. It is, in part, in that most (but not all) rich people have some talent and most poor people (but not all) have less, but it is a really weak correlation, and gets weaker the more wealth can be passed down through generations. How many rich thickos do you know? I certainly know plenty!

Most economists would rather optimise on economic growth rather than increasing wealth for the few. Aspiration is possible where you get social mobility, which means allowing people to become wealthy, not just keeping the rich rich forever.

If you look at mean productivity, the U.S looks like a success of low taxes, but if you look at median productivity (a better measure), it suddenly looks a lot less impressive and the GINI coefficient is horrible, suggesting fewer and fewer people earn more and more wealth.

If houses were taxed, people would be more inclined to trade down and swathes of empty property in Central London, which are currently owned by very wealthy (often dodgy) foreigners, would become at least income generative, and maybe made available for actual residents. In addition, large family houses would be sold, making them available for the next generation of families.

We have a sick obsession with property value in this country, which is economically destructive. The effect of super high property prices is to keep the next generation our (except for a few very specific overpaid professionals), not to help the economy.

*Plus student loan payments

Plus the loss of childcare support*

Neither of these are tax and they can't be included in identifying the marginal tax rate because plenty of people have neither.

I do think the mechanics of the personal allowance cliff edge are mad though. It just means everyone I know works 4 days a week to avoid it. Or puts masses in pension.

Buying a house is a big risk
Just ask the tens of thousands that went into negative equity and lost their home and almost every penny they had
You dod recall the financial crashes and massive hikes in interest rates.

You conveniently forget that the cost of materials, labour and land has also shot up and to buy another house in the same area, it will cost you a lot more via selling fees, solicitor fees/etc and stamp duty
HTH

The "sick value" re housing is to do with the facts it is almost world wide in most, if not all developed countries.

Dont forget the cost of materials, labour and land has shot up - so you can pay 2003 prices, can you

Also, property buying is a risk as prices can also go down

If it was that easy to make money, why does not every do this

Everyone who can, does. Look at the market for BTL mortgages. Nothing offers a guaranteed return, but real estate is the nearest thing.

I own my house, BTW. Before you do one of your assumptions about how I must be a precarious renter living on benefits.

@DistinguishedSocialCommentator

I chose £2m because it's roughly the start point for the wealth of the wealthiest 5%.

If a wealth tax was 1% on assets over £2m that'd be just £5k a year for someone who owned £2.5m in assets.
Yet it's estimated it would raise £16bn a year.

Which is because the top 1% have £3.5trillion of assets.

You dod recall the financial crashes and massive hikes in interest rates.

I do actually. And I also know that as a long term investment property is about as safe as it gets. I also know that it makes far more financial sense to pay a mortgage than rent. And finally I know that I need somewhere to live.

Fair enough, many thanks.
We've just been through a period of rampant inflation.
Sadly, governments do move allowances in line with inflation

Thanks

You can tax worldwide assets at 1% but you would always have to allow for deductions for debt and agreed exchange rates etc and it quickly becomes very complicated (and what about ISAs etc) - rich people tend to have international investments and are internationally mobile and sophisticated in diversifying their risks. Plus tax too much and off they are gone. Just look at places like Switzerland where some cantons do charge 1% wealth tax - they lost all their super rich to cantons that do not.

The tax man is always better off taxing the sitting ducks - that is rich elderly pensioners sitting on assets when they die. But unless we get a cross party consensus they are not going to do it for fear of losing voters.

@DistinguishedSocialCommentator ,

‘Dont forget the cost of materials, labour and land has shot up - so you can pay 2003 prices, can you’

These costs are a very small percentage of desirable properties

‘Also, property buying is a risk as prices can also go down

If it was that easy to make money, why does not every do this’

Those who can afford it do. The phrase ‘housing ladder’ comes from this!

The issue is we have had a pro asset monetary and fiscal policy, which has benefited those with assets, including property and disbenefited those on a wage (nurses, teachers, doctors etc). Quantitative easing, COVID grants etc have all stopped capitalism doing what it should-recycling wealth to new risk takers and people with skills.

Imagine if the banks hadn’t been bailed out and there hadn’t been QE. Yes, we would have had a massive recession, but asset prices would have collapsed, allowing people like normal lawyers, teachers, junior doctors to actually buy a decent property, just like my generation could. This was a choice, not an obligation.

What we have is a form of crony capitalism where the existing wealthy are protected and wealth is harder and harder to make from scratch.

(Not building enough houses is another policy specifically to encourage House inflation).

Imagine if the banks hadn’t been bailed out and there hadn’t been QE. Yes, we would have had a massive recession, but asset prices would have collapsed, allowing people like normal lawyers, teachers, junior doctors to actually buy a decent property

To be fair those people could buy a decent property in 2007. Nobody would have been able to buy anything if the banks hadn’t been bailed out. Our entire economy would have tanked and our currency would have been worthless. It wouldn’t have been recession, it would have been depression.

@Blossomtoes,

I don’t agree.

Great wealth has always been built out of creative destruction. That is how capitalism is meant to work.

Teachers would still have been teaching and lawyers would still have been lawyering (maybe less so £1mio/annum Magic Circle lawyers….).

It would have been grim for the best part of a decade, but we would probably be on a far better growth curve now. Look at the 20s, the post WW years and the 1970s, all were grim, but renewal is important.

If you want to try and banish recessions, capitalism is not the path to go down.

I doubt very much that teachers would still be teaching. A bankrupt government wouldn’t have been able to pay them.

“Imagine if the banks hadn’t been bailed out and there hadn’t been QE. Yes, we would have had a massive recession, but asset prices would have collapsed, allowing people like normal lawyers, teachers, junior doctors to actually buy a decent property, just like my generation could. This was a choice, not an obligation.”

We, Great Britain and UK, do not live in a vacuum. There is no way we could have not bailed banks out - there would have been terrible worldwide repercussions and potentially wars with other countries.

I repeat - we do not live in a vacuum. The current young person who has talent and the middle aged properly rich is very mobile and the rest of the world would welcome their assets and talents. So whatever we do tax wise has to make sure we keep both cash and talent in the country.

I don’t understand your post. In your thread title, you’re saying that you DON’T believe Labour will charge people 98% tax. Yet in your OP, you seem to be saying that you think Labour will charge 98% tax.

Also, as other people have pointed out, Labour won’t be charging people extremely high taxes - mainly because it would be very politically damaging and it wouldn’t make economic sense.

@Araminta1003 ,

No, we couldn’t have done it alone, you are right. We needed to get the global response right.

Also there are different ways to bail out banks, it isn’t all or nothing.

But the basic principle stands, people want to accumulate wealth through risk taking but not lose it when they gamble and lose.

This leads to both unfair and economically suboptimal outcomes.

There is no point trying to understand OPs posts.

We, Great Britain and UK, do not live in a vacuum. There is no way we could have not bailed banks out - there would have been terrible worldwide repercussions and potentially wars with other countries.

Iceland managed not to bail the banks out. With a much happier ending.

Sadly, that is a fact. The greed and the casino attitude of banks and some councils would have bankrupted the country.

It would have been more than just a depression but a vicious circle of hyper inflation and a worthless pound sterling

I vaguely Grece going belly up many years ago - they could hardly get hold of medicines as no one trusted the country

The financial well being of many nations is always well balanced with a strong currency but not too strong

In financial crashes, often those in the middle lose the most percentages wise

@Blossomtoes
”To be fair those people could buy a decent property in 2007.”
Really?! Even the ones who were in Year 6 at primary school in 2007 and are now 27 year old teachers in 2024?

A recession is just a depression with credit- the ability to go into debt. Bailing out the banks created a huge public debt that our grandchildren will still be paying off. Funny coincidence don’t you think that it was only the entities that pay dividends to MP investment portfolios got bailed out? While individual small business owners and homeowners were not only not bailed out, but expected to contribute to the bailing out the “too big to fail” lot.

Teachers in 2007 of course. 🙄

The debt our grandchildren will be paying off isn’t that incurred in 2007.

You do understand the 2007/8 crash created a recession we have yet to recover from? All the debt since 2007 up to where the added Covid debt in 2020/22 was added on was incurred due to 2007. The recession debt incurred wasnt done and dusted on 1 Jan 2008.

Honestly, you know the poster was talking about people who were too young or didn’t have the resources to buy in 2007 when they mentioned the difficulty in buying a property today. It’s disingenuous to go “well they could have bought in 2007”- utter rubbish because if they could have, they would have therefore they did not because they could not and now it is even worse.

All the debt since 2007 up to where the added Covid debt in 2020/22 was added on was incurred due to 2007.

Was it? Wasn’t austerity supposed to be to reduce the debt? Yet it increased. Please don’t try to tell me that if debt’s being repaid interest will virtually double, particularly at virtually non existent interest rates. I wasn’t born yesterday.