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.

Wealth is held primarily in equities, commodities like Gold, land & property, its not difficult to tax it more fairly.

I used to live in a Band D house, paying about 2500, my nr neighbour, in a 3m pound house, paid £3700, he'd added a golf course, a sauna, games room, but it was never re banded.

So bear in mind CT is levied on the "value" of the house, not on services used, How is that fair?

Martin Lewis nails it on upper band CT reform.

The thing is, our government can’t stop there being billionaires. It can only stop there being billionaires in the UK.

Perhaps the world would be better if those billionaires moved to Dubai, Mumbai, Shanghai etc. But firstly, I’m not sure how (are you?). And secondly it’s the UK govts job to worry about UK fiances. A reduction in very rich people in the UK would mean massive cuts to services or big tax increases on the less-rich to fill the gap. Becuase billionaires typically have big businesses or big incomes and a lot of other high-income people leave when they do.

Yes, I’d support a wealth tax even if it brought in no revenue, because extreme wealth inequality always ends up with horrific outcomes for everyone else.

History shows us that as wealth piles up at the top, power does too, and that combination has never worked out well for the masses. History should have also taught us that the ultra-rich can’t be trusted to self-regulate when they hold that level of wealth and power.

I don’t think a wealth tax is the answer but do think council tax is due an overhaul and there should be significantly higher payments for high value &/or larger homes. If nothing else it might force more older people languishing in large houses to downsize and see some movement in the stagnant property market. I’m also not completely versed to the idea of a wealth tax, although I don’t think it practically makes sense. I come from a wealthy family, but I’m not well off myself and do think those with more money should contribute more to society. They can afford to when others can’t and it helps make a fairer society. I’m not begrudging or being envious of people with wealth, But in the example of my family who live in old age in a large £m++ house, wtf are they still doing rattling around there (AND receiving state pension).

Yes. It's very simple too. You just tell HMRC that you wish to pay tax as a donation and you understand you can't claim it back at a later date.

George Osborne said that when he was chancellor he made a point of writing personally to those who did so. I venture to suggest that this means there were far fewer people who actually paid extra tax as a donation than there are on MN who piously virtue signal that of course they would just LOVE to pay more tax.

Most people support wealth taxes on OTHER PEOPLE. Wealthy is always defined as someone with £X more in asetts than me.
They like them because:

• they are envious
• they look for easy solutions to complicated problems.
• they are economically illiterate.
• they have not been following what has happened in those countries which have imposed a wealth tax.

I don’t think she’d bother asking the public.

On these types of threads I like to quote my economics teacher:
You can't take from the poor because they have nothing to start with.

You can't take from the rich because they have means and knowledge how to hide it.
We all know who is left.

So to answer the question: there's no point in a wealth tax. However unfair or painful this is to the rest of the population.

Inequality is bad for all including the wealthy. There are numerous statistics that show this. It causes political and economic instability and reduces education levels generally. All of that is bad for wealthy people too.

people were predicting mass exodus following the non-dom changes. Research shows it didn’t happen.

switzerland has a wealth tax. Many wealthy people live there. It’s a nice place to live. I’d prefer it to Dubai for many, many reasons.

but if tax minimisation and keeping more for yourself is your priority then you're in the right place and the UK cannot compete whether or not a wealth tax is introduced

The nom dom was changed anyway and people are leaving.

I think you’ve inadvertently answered her question. The taxes would stay due to jealousy like yours!

I see. So make contribute even more than they do already but seemingly begrudge them the state pension?
Still, you have said you are not rich, so it's absolutely fine as it won't affect you.
Are you likely to inherit? Oh you will say now that you would love to pay more of your inheritance to HMRC. Come back if you do. I suspect there will be many reasons why it's unfair to pay more when it's YOUR money, not someone else's

I had to pay tax on my dividends, 8,75% of about £30, so under a fiver, I diligently filled in the online form months ago, they haven't calculated it yet, no doubt I will get a letter when they do, if there were a lot of people like me it would probably cost more to collect it than it takes in.

I imagine some would, yes. Just like all the people who are baying for cuts to welfare benefits, even though it has been proven that making poor people poorer is more expensive in the long run, as it leads to the need for more costly interventions down the line.
People tend to be driven by what they consider fair. And if wealth tax meant lower income people could pay less tax, some people would be supportive even if the net result to the economy was even.

When people are asked if they support austerity, the bedroom tax etc even though it doesn't save the country any money, they say yes, based on principles. I suppose 'principles' work for other political decision making.

We do have too much burden on higher earners on PAYE vs other forms of income, the cliff edges are stupid, property taxes are outdated etc. Recognising this doesn’t mean someone is jealous

The calculations by economists say it would not be a zero sum revenue enterprise though? So this is an entirely moot point. It would make money for the Treasury.

Do we have any taxes on the books whose net effect is zero?

The £100k personal allowance taper and removal of childcare support at the same time is a major issue. Removing the taper, but reintroducing a 45% tax band for over £150k and a 50% tax band for over £250k would be more effective at boosting the economy and raising taxes. There's some interesting research by Dan Neidle that shows people reduce hours/ work where there is a hard boundary - especially in relation to childcare support. He had graphs that showed how people's economic behaviours changes at both the HICBC threshold and the £100k threshold.

No. Also there are different reasons for some taxes.

Some taxes are to discourage a negative behaviour - so you want the revenue raised to decrease (tobacco, plastic bags etc.)

Other taxes are to raise revenue (NI, income tax, VAT, IHT Capital Gains).

But the stats show they are not leaving in the numbers the papers predicted (mostly owned by non doms). Most have not left.

Switzerland has a wealth tax but it has very low taxes for the wealthy. People think of it as a tax paradise but it's because they have a deal for UHNW international people to just pay a sort of "maximum tax" and call it a day.

Example, on paper depending on canton you have say a 0.5% wealth tax every year. If you have £1B that's a pain. So you can negotiate with the canton to pretend you only actually have say £10M and pay the wealth taxes on that. There is usually a minimum annual tax you have to pay - this scheme is not relevant for normal people - but compared to the full taxes on your £1B it's very attractive.

A wealth tax won't work for the same reason that very few of us would choose to stay in a country that was removing 1% of our wealth every single year. Remember this is in addition to the already high taxes that the state utilises to extract money from the rich.

No matter how much you loved your country, would you be happy with potentially losing over half of your net wealth through this tax over your lifetime? I wouldn't, especially when there are loads of countries looking to welcome me with open arms and much more wealth friendly tax regimes.

Look at Ireland and what they have achieved. We need to look at ways to attract business and wealth not encourage it to leave.

Yeah apart from it has bought in more than ever expected" please show your evidence for this. Which data set ate you using.
Labour predicted 3K would leave in Yr 1- 25K have left. Each of those becomes a cost to the state.

Here is the actual data including Teesury own figures (only shown at court case and never officially made public) which shows the net income. We are at 5% attrition rate in Yr 1. When it gets to 10% the net income is £0. So yeh this is a perfect example of a policy that OP was talking about.

Jeez are you stalking me!