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

Then you have to liquidate some. Or hand over £200k’s worth to the nation in the way some of the very wealthy do in lieu of inheritance tax.

Once you hit a certain level - eg 10 million, it’s very easy to make massive amounts of passive income (so you no longer need to work), then, rather than sit on all that surplus money, it makes more sense to buy resources. The resources in this country are rapidly being hoovered up by the wealthiest who can easily out bid ordinary working people. So by not paying workers a decent wage and by pushing prices up, the poor get poorer and the rich get richer. The gap is obscene and set to get worse. Government owned and ordinary people owned resources and assets are being diminished further and further while the wealthiest swell their wealth even further.

I want to live in a country where ordinary working people have a shot at owning their own home, saving for retirement and have a decent standard of life. The only way I can see is to redistribute the wealth to create less inequality.

Social inequality is bad for everyone.

Absolutely. You sell one of your many properties or some of your shares. It’s not rocket science. I am sure they will figure it out!

I agree with the general argument about wealth tax, but it's also true that at the time income tax was 90% at the upper band, the economy was closed. As part of emergency war time measures, you couldn't take large amounts of money in or out of the country. When they first opened up (actually being forced to by America as part of the deal around refinancing Britain's war debt. America were kind of twats about this) there was an instant capital flight and the pound crashed so they had to close again temporarily.
That's not to say wealth tax can't work. But there's a certain mythologising around how income tax worked in WW2. You can have income tax that high in times of emergency like war but it's not sustainable long term.

If your house is worth 10m though how do you suddenly manage to liquidate that if you have nothing else?

But it might not be many properties, it could just be one. And is it good for the economy to have lots of people suddenly needing to see their shares?

If they are earning though then they do through their income taxes.

if someone has built a business and has paid tax on their earning and profits on the business, created jobs for many people which has in turn created more tax etc. Then they sell the business and pay the capital gains tax on that.
Then decide to invest the proceeds in to creating a new business generating more jobs and taxes but whilst they are waiting to get started have the money in their bank. But then that gets taxed again due to wealth tax .. is that really fair?

Because they are expected to work beyond their contracted hours? Miss family events? Work evenings and weekends? Know that the livelihood of tens of families depend on them?

No, it's because they are generally worried about paying bills, feeding family, etc

But you know that and are just being obtuse.

Yes it is fair.

Thing with taxation is, it does not leave people destitute. Where are the stories in the news, or even here on MN, about people being taxed so much they can't afford baby food ?

And the thing with taxation is that it produces consumers and workers for business to benefit from. If a company wants an employee to assemble a widget, that company is not having to pay individually for workers to go through school so they are able to put widgets together.

And also consider defense. I would say it is fair that the people who have more to lose pay more towards defending it.

How many people have a £10 million home and no other assets or properties?

Vanishingly few. In reality none.

Many people don't look beyond the first couple of 'steps' of whatever idea they think is the right one. Tax the mega wealthy? They'll leave - and they may not just take tax money away from the country (with the resulting negative impact) but they may also move businesses away, meaning thousands of people would lose their jobs.

They will also not spend money here, meaning other businesses will suffer, and the VAT they used to spend here, will now be spent in a different country. The list goes on.

But many people just say that it won't make a difference to them (the mega wealthy), or that if they leave that won't matter. But it will make a difference to them, whether you agree or not, and if they leave, it will be bad news for the country.

So, offering opinions without looking at the wider impact, is pointless, and wrong.

Oh, come on. If someone doesn't want that level of pressure/responsibility they can always quit and do something less high powered.

They may well sell some of their uk resources before they go which will help address inequality too. Also there is the possibility of an exit tax.

We need to do something because we are hurtling back to Dickensian Brittain and that feels like going backwards. Surely we can do better.

You are talking trickle down economics here.

Can you give an example of a nation, or a state, where trickle down economics has worked ?

I don’t know but I would expect it to be researched prior to introducing such a policy.
But you see lots of tv shows of people who inherit large old homes with high maintenance costs which they struggle to afford and then need business ideas to generate the income needed to keep the houses going.

Ok but generally those jobs still need doing and you need to have strong people without the right skills in those roles. Without high salaries you won’t be able to find people with the right skills/experience to do these jobs.

before you say the jobs aren’t needed - they are. We need people who can build and run profitable companies that create jobs, provides goods/services that we need, generate taxes etc

I thought that was impossible now because of inheritance tax ?

According to many MN threads inheritance tax is the devil it'self.

And take their skills and knowledge with them. We need economic growth in the country, driving people out will not achieve this.

Yes we need businesses, adult dc need jobs.

Exactly taxing people now creates cash now but that will quickly be spent. We need to create more cash in the country to create sustainable increased tax income and wealth in the country and give more people jobs and income.

Skills and knowlege in what ? How not to pay tax ?

Genuine question, because I don't know. Can you name an idividual who left the UK, and as a result the UK economy was devastated ? Or if not devestated, that had a measureable impact ?

James Dyson for example. When he went to Singapore to get Government grants etc there, did it impact the UK economy ? I know there was job losses, but was that down to tax, or just that his stuff is too expensive.

I think the UK lost first when Dyson moved their factories out to the East. That was a lot earlier and caused job loses. When he shifted his head office out that will also have caused job loses and loss in tax. But not as much. Dyson DOES have large investments in the UK though. Largely in the form of farmland. And to be fair he does seem to be doing innovative things there. But it is part of a pattern of UK business men moving their businesses and then their head offices and then themselves offshore. But using the money their business generates to buy up land in the UK and to interfere in politics. Likewise many non British people doing the same. It's dangerous in the long run. Having a bunch of super wealthy elites owning all the land is how you wind up with a history like Argentinas.

It's another argument in favour of taxing land or wealth. Not against IMO. And it's better to make moderate changes now than risk it getting to the stage where you overcorrect and then swing back too far the other way and on and on

Sorry, to answer your question I think that having rich people or businesses "leaving the UK" but keeping or buying up all the limited assets like land does damage the UK and has damaged the UK.