AIBU to think a 2% wealth tax on the rich is unfair?

[Mrspepperpotpot]

i just saw an article and petition from oxfam saying if we taxed the ‘super rich’ 2% it would solve a lot of problems. They were suggesting 2% on anyone worth 10 million. Everyone in the comments agreed

I just don’t understand this mentality. High earners are hit at every turn. They usually use private health and private schools, pay the most tax, get hit with tax on savings, IHT, land tax, pensions etc etc Why on earth should people earn money to be taxed on it, to then be taxed on it again and again.

Why do people begrudge others having money when they’ve worked extremely hard to get it? Why isn’t there uproar about benefits instead?

I know this will never actually happen but the amount of people who seem to want it to is astonishing

😂

Make do with what you have. We came over from India with nothing, just worked hard.

Don’t be so facetious. What emergency bill costs hundreds of thousands? Millions - the vast, vast majority - of people don’t have that saved in case of an emergency.

Let’s take a real life example of someone I know. He owns 50% of a household name brand you’ve probably heard of even if you haven’t used. His share is worth £12m. To be worth £24m, a company is making £3m around EBITDA. That’s £2.25m after tax. Him and his co owner take about £200k in remuneration - so £1.85m profits left (and profits, not cash). A lot of this is reinvested into the business for growth, and some funds working capital as it’s not cash, and a business does need cash reserves to weather downturns in business etc and still meet its costs. There’s not buckets of cash in the company and so there isn’t really budget to increase their pay from the £200k they currently earn.

Of that £200k, they take home about £135k. You can find many, many, many threads on here about how after buying a house in the south east and paying for childcare, £135k doesn’t go very far - certainly not far enough to build hundreds of thousands of savings.

Now they’re being asked under a 2% wealth tax to pay £240k each. So that’s nearly 2 years of taken home pay. No one can afford that, so the company will have to pay them more so they can pay the tax. That’s £1.2m from the company - the same company that can’t afford to pay them more than £200k a year because it is investing for growth and employing more people. Growth our economy sorely needs.

So it’s not an option, to pay the wealth tax he really needs to sell the business. There’s many international buyers interested, most of whom I can guarantee won’t care as much about the UK employees as the current owners do and will do all they can to cut costs and increase profits (and probably not pay a wealth tax as they’re non UK buyers). The UK workers will see slower pay rises and generally less pay as a result. The owners would probably pay the wealth tax and then leave the UK, as with the £9 ish million they’ll have left after tax means they don’t have to stay in the UK, create jobs here and suffer from our abysmal infrastructure that won’t be fixed until their kids leave uni, if at all.

So well done, you’ve collected some tax but lost all the other benefits of that wealth being in the UK AND had a detrimental impact on the low and middle earner employees already suffering a cost of living crisis and they will be paying less tax on their lower earnings and lower spending. And probably decimating their chances of ever saving £100k, which you insist is a necessary emergency fund to survive as not-a-millionaire.

But maybe that’s what you want.

Many people do. It doesn’t mean there is equality of opportunity, ability or luck.

If high earners are hit with a tax they will simply get expert advice on how to avoid or mitigate it by altering their behaviour. Time and time on MN I have seen a poster who earns 100K plus asking for and getting advice on how to lessen their tax obligation by such mechanism as salary sacrifice or cutting their hours. People who are financially smart will simply find ways (both legal and illegal) to avoid giving what they earned back to the grubby hands of the tax man. I would do exactly the same in their position without a pang of conscience.

As someone pointed out in something I read or saw recently, this is less than their assets will appreciate that year. It's peanuts for them. Wealth inequality is getting bigger and bigger and it needs to be spread out more fairly. Noone needs 10 miillion quid and they'll be spending that money to work less not more. So I absolutely 100% support this kind of wealth tax. They wouldn't even miss it.

Tash the economy by making the super rich pay some tax like everyone else? And reinvesting that money into things the economy needs like a functioning education and healthcare system, law and order?

A wealth tax for those with substantial assets may work if the tax is set a low rate (not 2%) but there would need to be exemptions for certain types of assets such as working farmers and owner-managed businesses.

Unfortunately I believe the whole tax system needs to be re-designed for a modern digital world, where sources of income are likely to be more diverse and distinctions between types of earnings become more blurred.

The personal allowance should be doubled to align with minimum wage as I think low-income families should keep more of what they earn to incentivise work over benefits.

If anyone knows where I can find a comparison of taxes paid by those earning less than say £25,000 with the amounts paid out in benefits to low earners I would love to see it.

UC/PIP and other benefits should be reserved for those that are unable to do any work at all. Benefits should never be more than minimum wage, regardless of how disabled someone is. State pensions should also be restricted to those with total income of less than the personal allowance/minimum wage.

Our hugely bureaucratic tax system is a disincentive to business and needs to be simplified. NI should be scrapped. Income and Corporation tax rates can be raised to compensate. Many other taxes (and whole departments that manage them) could be scrapped too.

Bureaucracy costs money and we need to drastically cut the size of the state. Every aspect of peoples lives is now controlled by politicians and civil servants completely stifling investment and enterprise.

There is a reason that tax havens are wealthy places - they don't suffer from the enormous costs of bureaucracy, they attract wealthy individuals, inward investment and encourage enterprise.

nothing to do with being rich or poor?

You can only spend money you have, but not everyone is prioritising their children.

Our taxes have never really been about fairness, they're about funding the government and the government pushing to incentivise certain behaviours while disincentizing others with their funding strategies, whether or not what they claim to want to encourage matches what they are actually encouraging.

With the wealth tax, I do think the UK does need to bring in a higher tax on foreign nationals buying up British assets, more when they're left empty and end up in a state of disrepair. This is well documented across many parts of London, lesser so in other large cities, and the government should disincentivise this behaviour. This would be an easy vote winning target I think, who likes empty properties going to waste, but for some reasons hasn't been politically popular.

It's equally baffling to claim there is less uproar about benefits.

What I am trying to say is that I don't feel resentful if people have more money than me .

I have enough.

More than a lot of people.

But my children, husband and wider family have always been MY priority and, rather feeling "envious" about people who work all the hours of the day for money, I feel pity.

Things have been getting increasingly unequal since the 80s, which is when pay rises for higher earners started far outstripping pay rises for lower earners. Prior to the 80s things were a lot more equal than they are today.

It’s true that we notice the inequality more now because of the cost of living crisis, but as I say, it started in the 1980s, long before Blair.

I don't give 2 boots about inequality. I care about absolute poverty

Plenty of wealthy people don't work at all. They don't need to. Money generates more money.

Because they have investments. They aren't exactly risk free.

Quite the assumption.

It’s not an assumption. I’m taking it from the high earners on here who work all the hours of the week and even on holiday.

It is an assumption. I’ve worked on every holiday I’ve been on for probably the last 30 years. In my industry and in my experience, most senior people do. Does answering emails or taking calls for an hour or two a day mean I’m putting money before my family? I, and they, think not.

Disagree but we can agree to differ.

They'll just leave, and if anything, overall tax receipts, as well as spending and investment, will decline.
Labour really don't understand the Laffer Curve.

As much as people might get all warm and fuzzy, and applaud at "the rich" being hammered, it doesn't actually raise more money.

It’s my job to help entrepreneurs with their personal tax. I just can’t believe an exit charge would change behaviour of start ups in the UK - and I don’t think anyone has yet answered why it would..

You may well be right although if they are being given the right tax advice before they start their businesses, they would be advised that the UK is not a business friendly environment.

And most of them aren’t internationally mobile enough to decide to move out of the UK to start a business elsewhere (where you have to learn a whole new legal regime, if not language, as well as finding a new job for your spouse, schools for your kids, not necessarily knowing the market etc).

Which super rich? They will leave. You are not making them pay some tax like everyone else, they already pay considerably more.

It was floated in 2025 but Reeves was convinced it would damage growth. But I suppose you could give it a go and see what happens.

Keep in mind many warned against the NI hike, and people were equally adamant it wouldn’t be damaging. The OECD think otherwise beforehand and assessing the outcome.