Polasnski’s revenue-neutral wealth tax?

[AshLeaf]

Polanski suggested this morning that a wealth tax is the right thing to do, even if it raises no revenue, and encourages some very wealthy people to move abroad. He justifies this because it would make society less unequal, which is, he suggests, a positive end in itself.

I wondered what other people thought about this? I see little to be gained by instituting a tax with no fiscal benefit, and no community benefit in reducing spend in our economy be removing some of the biggest spenders (if they move abroad). What do you think?

There have been some studies which indicated that more equal societies score more highly on measures such as social cohesion, happiness, etc. You will need to look this up yourself as I can't remember what the title of the book was (or individual studies) but you can imagine - if this is true - it may be because people more genuinely feel that we are "all in this together". The wealth leaving the country would specifically be currency and spending power, which though nice to have is not everything. Plus there is the worry that the rich's economic power gives them disproportionate political power.

Of course, all these arguments are open to dispute. In particular, I doubt that some section of the wealthy leaving would really dramatically change the mindset of the establishment (though if we get to the stage were we have a wealth tax, we maybe have a change in the establishment anyway).

In general, I think the idea that we could be a poorer (in GDP terms) country, but actually have a better quality of life and make better decisions overall, isn't crazy, which helps to consider whether what the Green Party is proposing actually makes sense or not, once we get away from the idea that the Wealthy leaving the country=bad.

Even if a more equal society is the ultimate goal, this argument assumes the means by which a more equal society is achieved makes no difference - levelling down is just as good as levelling up. If you closed the top 10% of schools every year, education would be more equal, but hard to see how that improved education even if one benefit is people feel better about the average school.

personally I think social mobility is more important than equality - people should be rewarded for hard work, talent, ingenuity and a willingness to take risks.

I definitely agree that a more equal society would be a very good thing. I’d be very positive about eg breaking up the trust funds which mean that massively wealthy people, especially those with a lot of land get to pay very little in taxes. I’d also support a system like the US has, where if you hold a UK passport, then you pay a(t least a proportion) of your tax to the UK government..
However, I’d question why we don’t want to encourage people in our country to start, and to grow businesses? When people who have earned (rather than inherited) a great deal of money leave the country, they take that energy, enthusiasm and creativity with them. I’m not sure that’s a good thing?
Honestly, I think it would be better for the UK if people like Lewis Hamilton and Martin Lewis lived here and contributed (at least their tax and their spending) to our economy. If not, why not?

A wealth tax sounds brilliant, but in reality is pie in the sky, my understanding is that whenever such a tax has been implemented it has raised far less than assumed.

i agree with @Labraradabrador just getting rid of the wealthiest/best 10% of whatever you want to make “more equal” will make it more equal, but without anyone actually benefitting. So what is the point?

I refuse to trust any party that thinks (1) the UK’s economic woes can be solved by a wealth tax and (2) women can have penises.

😆 hard agree on both points. And the second does make me want to check Polanski’s economic working for um inconsistencies

It’s an interesting assumption that the wealthiest 10% are also the best.

@BIossomtoes no one has made that assertion, which will be clear if you go back and read in full context rather than picking on isolated phrases within a larger piece of text.

”Wealthiest/best” is pretty unambiguous regardless of context.

As sad as it is, it won't matter what the greens think might work if Zach thinks women have penises. He'll be tripped up on that topic over and over and the middle ground that might have voted for him, will just think he's a captured anti women candidate.

doubling down just shows laziness. The exact wording was in the context of my comparison with education where ‘best’ would be a suitable descriptor of top decile.

the point being made (should you care to engage in substance of the debate rather than cherry pick specific language to take offence) is that removing the top decile doesn’t improve the performance of the 90%.

The young vote doesn’t care.

It wasn’t even your post I addressed. Stop trying to pick a fight for the sake of it.

I agree with him in principle but don't see how it would actually work. Something needs to be done to sort out the huge wealth gap. I saw a graph that showed that over the last 20 years, those at the bottom end of the scale have just stayed poor, the middle up slightly but the wealthy (top 1%) has sky rocketed. A society can't function when even decent earners have no chance of getting on the property ladder unless they get help from parents. If I was stuck living at home with no hope of leaving, why on earth would you bother working.

not me trying to start fights by selectively quoting. I was part of the conversation you are nitpicking, and don’t care for how it is being misconstrued.

Any business owner will work around it anyway.

I only pay myself up to the 20% tax band, max out my pension, the company pays for phones/internet/all sorts of other bits and bobs, and once I'm ready to retire I'll utilise Entrepreneurs relief to liquidate it at 15% tax (plus the corporation tax I've paid along the way) - still keeping my overall tax burden at about 30-35% max. over the course of time.

If you're rich, you will find ways around it. It's the top of the middle on PAYE salaries with families who are hit here so it only breeds discontentment, since they also can't easily upsticks and leave unlike the very rich (or people with non-professional careers that can be done anywhere)

If wealth taxes raise no revenue, what will pay for improvements to health services, social care, education and physical infrastructure? All of which are needed.

I'm not sure how many people want a more equal society with those things creaking and failing.

You really think a serious wealth taxing government wouldn’t get rid of those loopholes as a priority? It would be really interesting to see how much the current government could raise by just doing that.

Tax is only one part of how an economy pays for itself. Government borrowing is a major feature as is foreign investment.

A tax regime that is too airy fairy will destroy all confidence in the economy and severely affect both these other factors.

Yes get it wrong and the cost of debt becomes problematic and destabilising even.

@BIossomtoes i was referring to @Labraradabrador’s post, as is clear from “of whatever you want to make more equal” and as@Labraradabrador correctly said.

I certainly don’t think wealthy = best and it is disingenuous in the context of the thread to suggest I do.

The fact that this topic has slightly derailed this discussion about wealth taxes makes me quite sad. I can see the arguments on both side of this debate, and while I largely agree with the side that think that women can be born with penises (to put it baldly, which for some reason seems to happen rarely), I don't see how this is a deciding issue for someone's vote. I mean, what's more important - whether we have the right legislation regarding women's rights and trans righst, or whether we have a functioning welfare state and politics which isn't captured by monied interests? I mean, it would be nice to have what's right on all issues, but life isn't like that. I'd vote for Labour - despite the fact that I think their approach to this issue is in some ways wrong - if they were going to bring in a wealth tax. The most important things to me are the things which are going to affect the most people, and human civilisation generally, so much as one country can - in the UK, and globally. So that is inequality and the environment.

Exactly. It's not about whether we tax the wealthy, it's how we do it, because the alternative is they just get wealthier and wealthier. That will lead to mass immiseration or war (as it plausibly in the 20th century), possibly both.

My understanding is the only practical way to do it is to level a tax on all assets, hence illiminating loopholes. I've heard arguments that the problem would be the HMRC would spend a fortune assessing exactly how rich people are (as assets aren't always valued when they are not on the market - think about housing. We know what a house might be worth, but not what it will fetch until it is sold), but given the wealth at the top, I saw we just draw a line, and stipulate it's for the people with the assets to determine this. Surely they can afford it! And it is about getting the people at the top, anyway. There are always going to be ambiguities whereever you drawn a tax threshhold.

The only practical way to do it and ensure it actually brings in alot of money is to cooperate with other countries to stop these people taking their money abroad. Biden made VERY tentative steps in this direction. I'm quite happy to go against national sovereignty in in certain ways to achieve this. The alternative, to my mind, is for our societies to ultimately decline, and be overtaken by societies like China, who simply tell their rich what to do.

I don't think the target is really people like yourself (I mean, you can't be living on very much compared to them if you are just below the 40% band). You sound like a small business owner. What a wealth tax is is a tax on anyone who has assets (ideally, all assets, no exceptions) over a high figure - say 5 mil, or 2 mil, or whatever. Tax is levied on anything over that. Sorry if I'm teaching granny to suck eggs here - it sounds like you know more about the UK tax system that I do, but I just wanted to check we were on the same page.

Well, where else is the money going to come from? The rest of society has the highest tax burden we ever have.

I doubt this guy actually would fall into the wealth tax category - just look at what he is saying about his income.

This is important people more people think a wealth tax would effect them than is actually the case - just like inheritence tax.