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.

I’m a tax adviser and before the last general election we had a couple of UHNW clients actively making plans to leave if labour got in. Obviously anecdotal rather than factual but take that as you will.

I listened to an interesting podcast this week on the non-dom changes and wealth flight if anyone’s interested.

…Won’t be able to pick up the tax burden

in pp

Was there really any need to post your post?

You only have your tory brexit shit storm Gov to blane

In the UK, people resent success, they deride anyone who makes a high salary saying it is unfair and that they should b taxed more. The whole mindset needs to change.

There absolutely was. People who quote the original post for absolutely no reason should really think about why they’re doing something so pointless

I know someone whose father was doing that. The father also voted for Brexit. I thought it a shame he hadn't had the same attitude when labour last got in.

Your point also demonstrates that some highly paid people are also incompetent and not necessarily worth the money they are paid. Again, not too grateful for the high taxes they have paid.

Perhaps they wouldn't have that attitude if they didn't see or hear about so many incompetent and sometimes exploitative people gaining huge wealth.

I think this stems from our class system where the commoners tugged their forelock to the toffs. Now we dislike anyone with money and feel it is undeserved - as it often was with toff’s inherited wealth.

The majority of the population lived in poverty while working to their deaths while the upper classes lived in luxury on inherited wealth and exploitation mostly while doing very little. The poor were expected to be grateful to the rich then too.

I don't agree. Its the sick, poor and disabled we resent, as evidenced by our voting record.

It does seem that way in the US and I felt that Tory politicians have been trying to turn the UK workforce into an American one with limited rights (probably for theirs and their friends benefit, not ours) and have failed.

I don't understand this obsession, when so many European countries get the work life balance right much more than the Americans. We should emulate them, not the Americans.

European countries expect the majority to work and pay decent taxes. Not just 1% on PAYE but EVERYONE. Therefore there is less wage suppression.

They also have a different mindset. Most things are universal such as childcare and similar. They know that if you take away these benefits from the ones funding it for everyone else - people don’t bother and resentment kicks in - lowering overall productivity and tax take. The majority of the UK would happily tax anyone earning over 80k so they take home the same as someone on 30k. Closet communists over here.

@wombat15 indeed- it's hard to feel nothing but resentment on some CEO on several million plus enormous bonuses- even when the organisation is going down the pisser- applies to both public service and private companies - even if the company fails badly a couple of years sets you up for life.

Well the statistics tell us that less than 10% of UHNW individuals leave the country they made their wealth in and that 85% of billionaires live in the country of their birth, so it's unlikely a mass exodus is on the cards.

But if it does become a problem we can just do what the Americans do and make it a requirement to pay domestic tax no matter where you live on the planet (unless you renounce your citizenship, sell/forfeit your assets and pay the exit taxes).

As to the title of the thread, the fact that the number UHNW individuals in the UK is growing and that the value of the wealth the top few % hold is increasing suggests that wealth isn't actually draining out the country. Rather, it is congealing at the top and the sooner we look at ways to redistribute this stored wealth the better.

I you actually saying that people on 30k just don't want to earn more? Someone on 80k takes home about 57k after tax and Ni. Someone on 30k takes home about 25k so less than half.

No, its not about having a high salary - it's the super rich like Mr. S who makes a million pounds a week from his investments and other billionaires that should be taxed more.

No, its not about having a high salary - it's the super rich like Mr. S who makes a million pounds a week from his investments and other billionaires that should be taxed more.

you can’t tax billionaires more with global initiatives as they see mobile.

Perhaps it would be a good idea to tax all UK citizens regardless of where they live then like they do in the US.

I wouldn't have a problem with global taxation, set at US thresholds. You need to earn over $610k to hit the highest rate of income tax, which is 37%.

This

you can’t tax billionaires more with global initiatives as they see mobile.

Sorry that is dreadful (my iPad changes words! )

without global initiatives as they are mobile!

I think the issue in the Uk is so much of the economy is tied up with housing, ever increasing house prices was the main economic driver for years. Salaries stagnated but many didn’t notice because “my house has doubled in value” etc. As a result it became very popular to park your money in property for the global elite. There isn’t much incentive to live here without that so perhaps that’s why we don’t have the American rule?

I agree with you on mobile wealth in pp so it’s hard to tax

But this is a high bar before you hit tax. Could we fund the welfare state as it is if we were to adopt these tax rates?