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.

This is true if we can mitigate enough in coastal areas.

This is a paragraph I read

‘According to Global Sustainability Institute at Anglia Ruskin University, these are the best placed areas to deal with the worst effects of climate change:

1. New Zealand
2. Iceland
3. United Kingdom of Great Britain and Northern Ireland
4. Tasmania
5. Republic of Ireland

No coincidence these are all islands which have well developed infrastructure and are not low lying like the Maldives, for example.’

Yep we need to keep those investments up in flood defences and we are in a good place. Plot twist - to fund that we need tax payers who are net contributors.

Oh we need to do loads of stuff. Energy security, flood defences, food security

I don’t see any of this being discussed with any weight

And yep we need contributors

You’re constantly parroting known facts - conveniently omitting those that don’t support your agenda. Even slower clap.

Which is exactly why the migration we are seeing now will look like a trickle in the future. Plus we don’t have enough space to grow enough food to support ourselves.

Yet we still fly on holiday, travel unnecessarily, buy loads of unneeded crap from miles away etc. We are collectively stupid!

We were talking about marginal tax rates - keep up.

So NI isn’t part of that? I’d have thought it was an essential element personally. It counts as part of the marginal rate, surely?

Yep and that forms part of the marginal rate. You always rock up on these threads in various guises. It’s tedious. Higher earners can never pay enough in your eyes. Happy to take more and more with pension uplifts. Spending all day on here attacking higher earners. Hounding a suicidal mum who tipped into 100k and lost thousands and couldn’t meet her outgoings. Despicable.

And then a personal attack when inconvenient facts are pointed out. Way to go @whistleblower99.

It’s not a personal attack. It is what happens. Every, single, high earner thread. So predictable.

Ah thank you.

As someone whose highest salary was 23,000 when I covered someone on maternity leave at an estate agents for two months, I couldn't imagine having that amount if money every month. After a lifetime of low paid jobs interrupted by regular caring stints, I'm so used to living frugally I wouldn't know what to do with it lol.

Not a whinge, by the way, just a genuine perspective from someone with an inbuilt ability to miss the boat every time it seems.

I guess it just depends what you're used to.

@whistleblower99 I'm amazed at your patience. If people really don't understand how personal allowance works and can't be bothered to google there is no chance... give up.

They will continue crying that £100k is way too much for anyone to have

So just out of curiosity, what would the effect be if say everyone was taxed at one rate regardless of salary? Say 20% or something? Would that even things out better? Stimulate the economy? Prevent high earners from going elsewhere?

I know I'm taking my life in my hands here and coming across as thick as mince, but the tax system seems so complex it's difficult to see what would improve things? What is the rationale behind it all? Why is it so complicated and apparently punitive?

This is income tax and NI calculations on £125000
and £98000 without any pension contribution

Net wage is 61% when earning £125k
Net wage is 67% when earning £98k

the withdrawal of PA decreases the net wage by around 6%

Net wage is 59% when earning £150k

Earning £150k you’ll pay an additional £1000 national insurance annually compared to someone earning £98k

It’s not too much for anyone to have. High salaries are usually justified. What isn’t is whinging about being taxed on it.

Actually, high salaries are often based on misogyny and values. They are often disproportionate to the actual value brought to society.

You need to get out more OP.

Like any other price, salaries are based on supply and demand. An AI engineer can easily make $500k per year because many companies want them, and very few of them are available. The subjective social value of a job is something else completely. Even so, if the demand for socially valuable workers went up, or their supply went down, their wages would rise as well.

Demand and Supply at Work in Labor Markets

All the Doctors I know who are not of British origin are either going back to their home countries or moving to Australia, Canada, US and the Middle East. Much better pay and quality of life.

@BIossomtoes this thread wasn't about whinging at all but about impact of taxation on behavior and as a result on wider economy.

Anecdotally - I lost count of my former colleagues who were on very high packages and left UK in the last few years. Their jobs weren't replaced by locals, business moved most of roles to nearshore and those very few roles which had to stay here were significantly downgraded with people now getting fraction of those packages. I did some numbers out of curiosity (I knew their remunerations because of my role) and annual HMRC loss for only those ones I know personally is over £1m in taxes. This is just one division of one company in London.

So yes, tax the rich

those very few roles which had to stay here were significantly downgraded with people now getting fraction of those packages.

So who’s responsible for the loss of tax? And if those roles could be filled on a fraction of the previous packages, why were those who left paid so much?

@BIossomtoes as I said, the content of roles was moved abroad. Remaining positions were restructured and downgraded, they aren't doing the same scope anymore.

So who’s responsible for the loss of tax? - Brexit voters and people like you with their "tax the rich" sentiment and government responding to this and hence driving high earners out of country.

Oh, and I forgot another cohort of colleagues in their 50s taking early retirement. Again, those more junior ones who took over them are paid less now so overall tax take is down.
To prevent question - role A has market anchor of £xxx. New joiner starts at this level and gets annual increased of x %. In 5 years time their package will £zzz. They leave and replacement is hired still at £xxx. So overall tax take is reduced. This is one of the reason of regular redundancies in big businesses.

This is EXACTLY what is happening in skilled jobs in IT and engineering.