Wealth is draining out of the UK

[Ifmenhadperiods]

I was at an event with business people the other week. One of the high net worths said to me that no wealthy foreigner he knows will stay in the UK long term. He is local but says anyone with foreign connections and wealth is fleeing abroad - and taking their businesses with them. That is the chat around his dinner table in Holland Park.

One indisputable piece of evidence I guess is the massive slump in companies that list in the UK. We also have so few pension funds investing in UK business. Personally I don’t blame them: my own shares ISA is invested in the US and has grown by 30% in the last year, a figure UK shares just can’t compete with. Most of our FTSE top companies are in legacy industries like fossil fuels while elsewhere they’re in tech and innovation as well
as traditional companies.

Several friends have left here and gone to the US in the last decade and they say the lifestyle is excellent (and they earn far more, working in tech).

I have also spoken to friend’s older DC (6th formers) and some who have had offers from Oxford and Cambridge are rejecting them in favour of Ivy League schools.

Apparently Ivy leagues are FAR better at getting students to think about their careers from day one. Oxbridge is amazing at teaching you the subject in an academically rigorous way, but Ivy leagues pair you up with business investors if you do a degree such as economics. They have fees assistance for households earning up to 400k US dollars. Here you can’t get student loans if you have more than about £50k in household income.
I know the fees are higher there but they also have more scholarships in the US.

We are about to tax private schools. A popular policy with the public. But again, apparently the wealthy foreigners who can afford this tax are worried it will shake out the middle class Brits they want their kids to go to school with! They don’t just want their kids to go to school with foreign and British super elites. They’re quite fond of the eccentric Brits.

It seems every way you turn, there’s little incentive to make money especially with the cliff edge in income taxation. And the worst thing is it’s understandable because of the massive levels of wage stagnation we have to subsidise through working tax credits (no real wage growth for 20 years!).

We don’t want immigrants but we have no one to pay for our massive welfare bill which is made up mostly of a triple locked state pension and grossly inefficient health system.

If you’re lucky enough to have a bit of spare cash, forget moving up the property ladder, owning a holiday home or a rental (tax hell lies in all those paths).

Can anyone shake me out of this pessimism? Of course I know we are lucky not to be in Syria or Afghanistan or Gaza. But this is about the decline of the UK rather than where we are compared to truly volatile or oppressive countries. I genuinely don’t want to emigrate but fear we - along with anyone who was once comfortable but never wealthy - are going to have a very uncomfortable retirement - if I make it that far - and our DCs will face a future in a country that will continue to get poorer, with the entrepreneurial class deserting us.

Have lots of friends in the tax world; UK is still seen very favourably by many countries as an excellent go-between between a lot of the English speaking West and EU countries. Pension funds from abroad also looking to diversify into the U.K. (and EU market, which U.K. firms will help with).

The public school thing has been the case for the last two decades and yet here those wealthy foreigners still come.

You sound mighty complacent. Let’s sit back and watch what happens when Starmer gets in shall we.

The gap between wealthy and poor has grown more during the last 13 years than over he last 100 years. This at the bottom are fed p with making money for the rich, its not sustainable or fair. If the rich are unhappy about the situation and want to flee - then actually fine as the at the bottom may well fare better without them. The rich only have themselves to blame, had they not been so greedy and the disparity of money they had and the workers - then this situation could have been avoided

umm ok

Can you pay the tax burden instead?

Can you pay the tax burden instead?

we already are paying - the wealthy aren't paying as they employ people to avoid paying

The earlier US tax brackets start at 10% but there's no nil rate band at all in the US.
I copied and pasted from Google (it was a table but lost the formatting) but it's fairly clear, I hope.

Federal Tax brackets 2024 (taxes due April 2025)
Tax rate Single Married filing jointly
10% $0 to $11,600 $0 to $23,200
12% $11,601 to $47,150 $23,201 to $94,300
22% $47,151 to $100,525 $94,301 to $201,050
24% $100,526 to $191,950 $201,051 to $383,900

Then there are bands of approximately £200k intervals where tax goes to 28%, 32% and finally to 37%. And most states and some cities have local income tax, it was about 10% when I lived in NYC, but that was long ago, and sales tax. So the headline figures understate the real level of taxation.

Plus, there are property taxes to be paid pretty much all over, levied on where you live. They are very high in parts of the US and schools are funded locally, not by central government, so they vary from town to town. It is easy to find examples of places where the property tax on a normal family house is well over $15k pa, which makes our council tax rates look fairly tame.

Tax treaties between nations avoid double taxation, but I am hazy on details. I'm not an accountant, far less an adviser to HNW.

In terms of funding benefits, this happens at state or city level, except Medicaid/ Medicare and Social Security (the source of state pension). I have no knowledge of how disabled Americans obtain funding.

Is it better or worse? It's probably just different.

you have £1.4 billion being lost in tax avoidance

The poorest 10% of households paid on average 42% of their income in tax in 2015/16. The richest 10% of households however paid on average just 34.3% of their income in tax

What all of them? No tax? And yet countries use policy to attract tax payers and wealth creators

It’s going to be pretty bleak if your wish that they all flee happens

How far down the top tax paying centiles do you want to go?

Just wondering how poor we can get without top centile tax payers

It’s going to be pretty bleak if your wish that they all flee happens

Where did I wish they would all flee - what I wrote was if they want to leave then fine, we may fare better without them.

Another kind of wealth leaving the uk - is talent. Brain drain.

Doctors, teachers, nurses, IT specialists, scientists, etc, etc- leaving in droves as working in the UK has become so stressful- especially in NHS and State Edu. Much much better conditions abroad, not just financially. And much better work satisfaction and atmosphere. Since Brexit even more so.

Quite tragic, really.

I don’t know, it’s hard to compare

I do think the US is a bit harsher in terms of systems and has higher inequality ie Gini coefficient

https://worldpopulationreview.com/country-rankings/gini-coefficient-by-country

While there is no personal allowance, don't people on low incomes get the tax they have paid rebated though? I can't remember what it is called but everyone on judge judy seems to get it.

are we actually training any of our own? Or are they coming to the uk for 2/3 years for experience and then moving on? We know why they are moving on but why haven't we been training our own doctors, nurses and teachers? Instead we have pseudo doctors as its cheaper for training

My dc are trying to leave. IT and engineering. Brexit took so much from them and all they’ve known is a Tory government which has taken the rest- housing, functioning NHS, functioning public services, dentistry….

We’d do the same if we could.

Tories even manage to screw up this.https://www.bbc.co.uk/news/health-68849847.amp

Yes they are paid low salaries compared to elsewhere and then are told that they should be grateful to the wealthy CEOs and investors who are profiting from their hard work and skills.

I think you mean the Earned Income Tax Credit @wombat15 . It tops out at $80k and it's claimed back after filing the annual tax return that every American in work has to complete. There are deductions for all sorts of stuff, including one for certain uninsured losses.

It's no surprise that America has even more accountants per '000 people than the UK, or that they are so well paid. My pile of forms and guidance documents was several inches thick!

Your post stinks of resentment. Why do people in the uk resent high earners who fund so much? I doubt those at the bottom would fare better without them! What do the rich have to blame themselves for? Striving to do well? If you have money you can live happily in any country, with attitudes like yours who can blame them for leaving, and paying less tax in the process!

It’s a mad read alright. But sadly will impact all of us.

@ohthejoys21

you make the assumption that I am resentful - why would I be resentful, be interested to hear your notions without any background

I have no idea WHY you are resentful, but your comment of "rich people are greedy" is a clue..

Im not resentful though - you have decide that based on what? a comment about greed and disparity

An economy doesn't flourish on disparity as if there are too many poor people, unfortunately rich people will not spend frequently enough - it doesn't work

If you are selling a mid market product and have 2 rich people in town and 100 poor people - the poor will not be able to afraid the product and the rich will most probably only purchase 2 or 3 - if you spread the wealth then more products will be sold and the economy does better.

While there is no personal allowance, don't people on low incomes get the tax they have paid rebated though? I can't remember what it is called but everyone on judge judy seems to get it

Yes, about 2/3 of Americans receive a refund when they file their year-end taxes.

It's not just those on a low income either. There are many tax " deductions" that reduce your overall tax burden. It's not a straightforward system.

I think wealth only going to a fraction of the popular is a justifiable cause of resentment particularly when this tiny few keep it and there is no levelling up or social mobility.

Sick of the Tories jam tomorrow and trickling down myths. They are myths and never happen. Tories keep the rich rich on the back of everybody else and make sure it’s kept that way.

They couldn’t give a shiny shit about anybody other than their rich friends and donors.

MikeRafone

"If you are selling a mid market product and have 2 rich people in town and 100 poor people - the poor will not be able to afraid the product and the rich will most probably only purchase 2 or 3 - if you spread the wealth then more products will be sold and the economy does better"

Spreading the wealth is fine in theory, but how does that work? If you had worked your arse off sacrificing family life to get where you are, how would you feel about your money being taken and given to someone who choses not to work? And why would you stay in a country that plans to do this, when you can afford to move to a country that wants to attract high earners and makes it worth their while to invest in that country?