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

**steal from

His published tax returns say this is factually incorrect. But go on

Income tax, CGT and employee NI

Gross income/gains
Effective rate

Rishi Sunak
£2,229,086
£508,308 UK tax
22.8%

Band 5 NHS nurse
£27,055–£32,934
approximately £4,830–£6,754
17.9%–20.5%

Have you ever tried to set up a business in South Sudan? If not why not?

False. You may not have been around in the 1970s but loads of wealthy British people moved abroad, many to the US as "tax exiles". Top income tax rates reaching an eye-watering 83% on earned income and 98% on unearned (investment) income in 1975 (in highest brackets) and plenty fled.

So he pays 22.8% on £2.2million while a nurse pays 20.5% on £33k and you think that’s fair? Ffs.

To be fair basic rate was 33% with 9% NI on top. Everyone was taxed until the pips squeaked.

If you are earning 145,000 or in that ball park than you are one of the "normal people" paying far more tax than the super rich

You are middle class. Your income comes in the form of a salary which is taxed. If you had 20 million you could live far more comfortably of a tiny proportion of the interest/dividends on that 20 million while the rest of the interest/dividends gets reinvested. As a result you could have a far better standard of living than you have now and pay less tax than you do now in real terms not just in proportional terms. If you are smart you can avoid capital gains tax completely by not withdrawing any of the dividends and instead borrowing against your huge wealth to fund further investments and lifestyle. Meaning even if you aren't working at all, you are increasing your wealth by more each year than 145k.

In addition to paying less tax than you do now you can also buy up housing etc pushing up property prices and pricing normal people out.

That's your scientific basis for finding out who has over £10mill? The point I'm making is it's very hard to identify such people. Rich lists are mainly guesswork. How do you quantify a person who has (stealth) wealth in artwork vs wealth in an inherited family farm vs owning own business but not having any cashon hand? Not saying it's absolutely impossible to come up with this, but it would require massive surveillance.

Because people use their wealth as leverage to fund their lifestyle tax free among other things. To do this you need to be open about how much things are worth or even exagerate it (effectively all money is debt and all value is assigned by how much you can borrow against it). You can't do much about the super secret artwork collections noone knows about. (If a tree falls in a forest does anyone hear it? If Van Gogh paints an artwork that no-one knows about is it worth anything?) But the wealth that is known about is hard to hide (because it's land or publically declared) and a lot already. And it's 2% tax. It's not the red army seizing all the assets and throwing people in gulags.

Better to think of it like this - Rishi and his wife are apparently worth £640 million. The vast majority of that will be spread around and invested in all sorts of things - stocks and shares, commodoties, property, corporate bonds, gilts…all sorts of stuff. You could pretty conservatively assume that their overall wealth is growing by 7% a year. That would mean that their wealth could generate around 45 million a year (probably more) in passive income.

Unlike people earning high salaries, that isn’t subject to income tax like the rest of us pay. In fact, depending on how aggressively they want to play the system, they could be showing almost no income at all. Jeff Bezos famously did this, and boasted about having an income so low he received a tax credit cheque for $4,000 from the government for his kids.

Research shows that at this level of wealth, the effective tax rate being paid by these wealthy individuals looks more like 20-30%. Compare that to my effective income tax rate of just over 38%. So most of us on here are paying a much higher effective rate of tax than the likes of Dishy Rishi - even though we have far far less.

That low rate of tax leaves the super rich with even more money to buy more assets. While most of our money goes on rent, or mortgage payments, or food, gas, electricity - those costs make up a tiny proportion of the income of the super rich. So they buy more and more with their low taxed wealth, and the money keeps compounding at an ever increasing rate.

The super rich are getting ever richer at an incredible rate, and the tax system is helping to make that happen. It is up to us to decide if that is what we want to happen. Income tax is a relatively recent invention. With the rise of the billionaire, and even trillionaire class, the collapse of government wealth, and the falling living standards of almost all of the rest of society, now could be a good time to look again at our tax system and ask if it is doing what we need it to do.

I said it was a start. 🤷‍♀️

Of course owners of multi million properties are easy to identify. They’re a bit hard to hide.

He pays more totally and they both get to keep the majority of their earnings. Rishi Sunak is a very smart man!

Let's lower taxes on PAYE incomes as well then :)

Or... Move to somewhere like South Sudan as I suggested earlier. There are loads of places in the world (often disputed in one way or another) with no taxes and no oppressive government breathing down your neck. You would think the self made wealth creators would be queuing up to build vast fortunes there free of government constraints. Instead, they are all living and making money in regulated, taxed economies and complaining about government interference and the high tax rate

Yes. Like selling a house you have inherited for below the IHT threshold so you ‘don’t pay any tax’ but not realising that you only pay tax on the amount over the threshold so you still get more if you sell it for more. Just not the full amount of the bit over the threshold. Yes. I do know someone who thought about doing this until it was pointed out how ridiculous they were being.

There's no income or capital taxes at all in the UAE, Saudi Arabia, Bahrain, Qatar and Kuwait. Oman will start a very small one for above 100k USD at 5%

HK and SG are great places to be.

I think you neee to do some reading up on civic duty and the cultivation of democracies.

The rich go to places like Switzerland or Monaco where they spend exactly 6 months and 2 days and the rest of the time in X Y Z. It is so easy for them to do! Precisely because they can buy up property anywhere, push of a button everything moves and they still can keep their businesses etc where they like. That is why they are a “flight” risk. It is literally just an adjustment of days spent in Britain to them.

They don’t have their DC in local school like the rest of us with a coveted NHS dentist either! The kids are in boarding schools or just get moved there anyway or they can get a nanny for the days they aren’t in the country. It is so so piss easy for them - you all living in cloud cuckoo land.
When they go for the rich = we middle class pay, yet again.

Democracy is two wolves and a sheep voting what's for dinner

And do you do anything to help those who are going hungry?

They often don’t have 10 million in the bloody bank

Instead of a wealth tax of 2% we should have zero tax on anyone under 30k - but governments don’t like that because they don’t see the money, working people do instead.

but in the end do we need a fully new system ?

Political Philosophy
The quotation addresses one of the oldest debates in political theory.

Plato

Plato distrusted democracy.

In The Republic, he argued that democracies often become governed by emotion rather than wisdom.
Mass opinion could become unstable.
Democracy eventually degenerates into tyranny
The wolves metaphor echoes this concern.

Aristotle

Aristotle distinguished between:

• good forms of government
• corrupted forms

He argued that democracy becomes corrupted when it serves only the interests of the majority rather than the common good.

Again, the wolves benefit while the sheep suffers.