If a wealth tax brought in zero revenue to the government, would people still support it? If yes, why?

[percypiggy200]

I’m curious and I’d love to know people’s reasoning.

How do you move a Knightsbridge mansion abroad?

How is a wealth tax (which taxes wealth, not income) going to cause people to reduce their earnings? The ultra-rich didn't accumulate their wealth through payroll, it comes from capital gains.

The wealthy keep threatening to leave NYC for Florida, every time a tax is proposed. Few of them actually do. Because they like living in NYC, the things that made them rich are in NYC, their families and friends live in NYC, their kids are settled at school; and Florida cannot compete with that, regardless of its tax rates. They make the threats though to try and discouraged legislatures from imposing the tax.
https://abcnews.go.com/Business/rich-leave-new-york-city-after-mamdani-takes/story?id=127503351

Granted, there are people who will move to Dubai (or Florida). But the sort of people who move to Dubai (or Florida) are the sort of people who like the sort of lifestyle that Dubai (or Florida) has, and who don't really have any ties to home. Most people don't actually want that. You couldn't pay me to move to Dubai, not for all of the money in the world.

you sell it. Super prime house prices are already falling if there was a wealth tax they would fall even more. You sell all your assets in the UK and take your money and invest it elsewhere.

as I said on a PP the wealth tax is proposed on un realized assets. Your house or shares or pension or art portfolio could be worth £x today but could go down in value as well as up. You don’t have the cash until you sell the asset and realise the gain. There is already a wealth tax on realized gains - CGT

Why would you sell property and stocks, thereby crystalising potential losses?

For a 2% tax increase, its 200k on 10m.

and as you say, incurring CG if your assets have increased in value.

Wouldn't happen.

People give up everything when they relocate abroad, family connections, work, kids schooling, friends - to save 200k?

There may well be other ways to mitigate any tax, thats why it should be looked at carefully.

We're talking about a levy of 1% on the value of estates over (for example) £5 million. So if your property portfolio was worth £6m (after the inevitable deflation this levy will cause) you'd be paying £10k. If you have a property portfolio that big, you can afford to pay £10k. If you are the Duke of Westminster (estimated worth £10b) then you can afford to pay £99,950k. And if you can't, then sell up, see if I care.

Asset values can go down as well as up
They go more up than down, and any competent wealth manager will have diversified the portfolio to minimise risk.

but house prices in London are falling fast
Good, that bubble (caused by the ultra-rich buying up London property) needs deflating. Housing stock exists to provide homes, not to hoard wealth. Kensington & Chelsea alone has thousands of unoccupied properties.

Rich people will leave,
Don't threaten me with a good time. We're not talking investment bankers and consultant surgeons here, this is about wealth, not income.

entrepreneurs will not start businesses in the UK.
It's a tax on real estate. Not on things that actually produce real growth.

Because the really wealthy are international business people. They’re not living next to their nan and uncle Jim with oor Jean up the the lane and don’t want to move ever. They’re are people who spread their residence over all of the places they work during the year - lots of different countries. It’s v easy to sell your London home and life in your Paris home and Milan home during the year instead. I hear we have many hotels they can stay in when in town.

The recipient of tax is not 'the government'. The government is not an person that takes money from us to put in its piggy bank. The government is there to administer funds. To collect them in from citizens and spend them on behalf of citizens.
Sometimes we disagree with the decisions made by governments and feel the way they choose to administer funds does not benefit citizens.
In such cases we may not want to give that particular government the right to spend anymore of our funds than we have to as we don't believe they will use them well.
This isn't at all the same as not wanting to contribute funds to society at all because we want to keep our money to ourselves.

Well spotted!

But it wasn't the point of the post but invaluable input nonetheless.

As to me hating the Tories, nope i don't hate anyone, least of all a party that will never be in power again - predicted to have around 60 MPs by the next GE.

I've also voted Tory before but their policies and ideals don't work, we have had privatisations, de industrialisation, sell offs, Austerity, a smaller state etc etc and its all failed.

They had 14 years in which they either held the whip hand or had good majorities and what did they do with that? took national debt to 100%, Brexit, Covid fraud, almost zero growth throughout their tenue, a housing crisis, a rents crisis, a cost of living crisis - inflation at 11% !! Energy increases of over 300% & wrecked every single public service we have.

Meanwhile, the wealth inequality gap has ballooned, hence the need now for some form of wealth tax.

Its getting even better.

Carbon capture is set to cost £29bn over 25 years (if it ever happens) so we are now up to 1.6bn of savings, just £28.4bn to go!!

But that selfishness also applies to the benefit claimants who won't do anything to become self sufficient.
I'm ashamed to live in a country that needs to tell claimants how much they need to work.

The tax supposedly coming on Wednesday on houses has a threshold of £2m. 100,000 properties will be hit by that.

my OP was about a wealth tax - which is usually suggested at a level of 2% over £10m - on all assets - including shares entrepreneurs hold in their businesses.

Investment bankers and surgeons are already leaving!

Ah I recognise you now from that post.

Who mentioned hate? I know I didn't. Its good to finally know the reason for your anti tory rants though. I feel the same about Labour.

Labour haven't been in for the majority of the post war period and didn't do the things i mentioned.

On rants, you re the one who starts a never ending series of threads on your dislike of Labour - not healthy.

Any news on how you'd raise £30 billion? Carbon capture has fallen a bit short 😂

Mn has threads on politics. Some post on the Starmer one, it’s been going longer.

Why have a go in all these posts.

Ah like all the "flag shagger" rants on your thread?

Oh is my thread the only long running politics chat thread? I didn't realise.

Looking forward to a loooong post explaining the benefits of carbon capture.
Although I think the Chagossian people may take some convincing about the Chagos deal.

This!

I think its the right leaning media hatred of Labour thats the issue, if the Tories had suggested Welfare Reform or TL changes, the media would be quiet, even supportive.

Do you not remember the kick-off in 2017 over Theresa May's "dementia tax"?

So they sell up, deflating housing prices in some of our most expensive areas? And are replaced by people who might actually live there? Yeah, I'm not seeing the downside.

Money "invested" in property (as opposed to property development) is not productive. It does nothing for the economy. Particularly if that property is left empty. If you want to cover the cost of paying a 1% tax on your property portfolio then you could always let it out. You'd get far more than 1%, rent usually seems to be around 10% of the property's value.

Investment bankers and surgeons are leaving because of the cliff-edges in our income tax rates. That's got nothing to do with a wealth tax, and you'll find no one on this thread who disagrees that the cliff edges need sorting.

Oh, @percypiggy200, as you keep mentioning CGT, that's a tax that is only due if the person who originally bought whatever asset it was sells it within their lifetime. Centimillionaires and billionaires don't cash out their assets. They take out loans for day-to-day spending, using their portfolios as collateral. They don't pay these off (their wealth accumulates far faster than the interest rate compounds). Their beneficiaries inherit both the assets and the loans, and the CGT liability reverts to zero - at which point they can cash in the assets tax-free and pay off the loans. Yes, IHT exists but these people have many handy loopholes to avoid this (the agricultural land one has mercifully been closed, it was pushing up land values beyond the reach of ordinary farmers).

Of course they are. The only surgeons in this country with wealth of more than £10 million are those who do exclusively private work - and there are precious few of those.