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.

people like you with their "tax the rich" sentiment

I don’t have a tax the rich sentiment. I have a tax everyone fairly sentiment. The basic rate of income tax was 38% when I started work with 9% NI. Now that really is insane taxation.

And one more - there is a number of FTSE top companies now considering leaving LSE, predominantly to move to NYSE. In practical terms this will also involve their Headquarters moving as well with all those much hated CEO/CFOs etc moving and taking their £xm packages with them. Whilst many will be happy for those "parasites" to leave, they'd be surprised to know the amount of taxes paid here now and expected loss then

@BIossomtoes fair enough

Would you mind sharing your view of fair taxation? bands, rates etc?

So you can pick it apart? Don’t think so.

We have recently left the UK and know a lot of people in our high income cohort doing the same. I don’t mind being taxed fairly IF I get to see some of the benefit. All I currently see is bankrupt councils, poor public services, can’t see a doctor or dentist for love nor money, uncontrolled immigration, failing NHS, and millions economically inactive. I also had no faith in an incoming Labour government and have voted with my feet.

@Happilyobtuse DH is a doctor so proving your point

Yeah, I guessed so.

Labour also don't share their policies except for private schools VAT for the fear of being picked apart.

I'm too old to leave but dread to see what's coming

are you going to share your idea of a tax system that you'd like to see implemented? @nearlylovemyusername

Not at all - I never said that the current system is unfair or that taxes should be increased at top end or claimed to have a view of would be a fair tax policy. I do think that removal of personal allowance should be abolished, but most of all believe that there are such fundamental structural problems with British society at the moment and cultural expectations that taxes are very secondary here

Removal of the personal allowance at 100k doesn't seem fair. Someone said it was introduced by Labour in 2010. If it was 100k that would have been a high income particularly as after pension contributions. Have the tories not increased the threshold since then?

No. This is fiscal drag which means that salaries which would have had considerable earning power in 2010 when the banks were set, no longer have that earning power but are being brought into higher tax bands.

If the tax bands had moved with inflation the higher (40%) rate band would now be around £60000 and the highest rate would be £160000.

IMO, the Tories' best tax move would be to increase the nil rate tax band by inflation so the lowest paid kept more of their earnings. Increasing the £12,570 nil rate threshold to about £14,000 would take basic rate state pensioners out of tax, so only their occupational pensions and investment income would be taxed. If you have a decent occupational pension and savings paying interest on top, then I think it's fair to nibble back a bit for public services.

I’d rather see a 10% tax rate re introduced, from £12,700 through to £24,700. Leave the withdrawal of the personal allowence over £100k as they would still benefit from the 10% band up to £24,700

Increasing the £12,570 nil rate threshold to about £14,000 would take basic rate state pensioners out of tax, so only their occupational pensions and investment income would be taxed.

Just like it is now then.

It would be better for PT workers, Blossom. We are approaching the point where recipients of a full state pension getting inflation index-linked increases are very close to being tax payers. The devil is always in the detail.

I know. 🤷‍♀️

People don’t want to hear this though, the actual real life effect of government bowing down to their ‘tax anyone that earns more than me really heavily’ whining.

we need to get rid of all disincentives to earn more. All of the ludicrous Cliff edges. Give everyone childcare and child benefit. Drop the VAT threshold to £10k, become a fully cashless society. That’s how to raise taxes.

Why should pensioners not pay tax on their pension?

It would be a bit ludicrous to tax a benefit, wouldn’t it? Easier just to keep the benefit below the tax threshold - and a lot cheaper.

But it’s ok for a part time low earner to pay tax and a pensioner not to pay it?

Part time workers earning under the personal allowance threshold don’t pay tax. Pensioners don’t get special treatment. Nor should they.

No but if they go over the personal allowance due to benefits ought they pay tax?

Private schools pay tax in Scotland and there's still plenty rich wankers about - and plenty extremely wealthy landowners...

Yes.

And we do pay tax on any income over the nil rate band. Even us boomers.