Using the example above, which is framed in nicely simple terms you get:
£50,000 income, £7,500 tax, leaves you £42,500 to live on. £100,000 income, £27,500 tax, leaves you £72,500 to live on. £1,000,000 income, £435,000 tax, leaves you £565,000 to live on.
So when it comes to paying the bills, the person with a £1,000,000 income has about thirteen times as much more to live on compared with the person with an income of £50,000.
If the person earning £1,000,000 a year was left with five times the income of the £50,000 person to live on, they would get £212,500 to make ends meet, and pay £787,500 tax.
Based on the current tax rates, you would need to earn £380,000 to net that £212,500 - so you are effectively proposing a tax rate of 100% on any earnings above £380k. The impact that would have on the economy is unfathomable.
Yes but it would fuck the high earners which a lot of people seem to want to do. Wreck the country as long as those greedy few get clobbered lol it’s a race to the bottom
The figures don't stand up, but the neither do the richest 1or 2% being millions better off after years and years of austerity. I don't think most people want to fuck the high earners, I think they want to see an end to those at the bottom suffering more and more cuts and instead having the richest paying more tax into a system that needs it.
You use the term greedy few yourself Andy.
But you shouldn’t blame the people it’s the system that needs changing. I have a small business that employs 137 people. There are a few in the business that earn more than I do and I own the business. I try to make it as rewarding as possible for every member of staff but the stupidity of things like NI increases, minimum wage increase (that does not just effect minimum wage earners ) I agree our system is fucked but taxing the creators is not the answer. Rather than trying to create a vibrant dynamic economy some people seem set on stifling it
Neither is squeezing those at the bottom, hence wealth tax for the very rich who make more from unearned income than business.
Out of interest is the expectation to tax the asset annually (Wealth tax), tax any realisation of gain (capital gains tax) and also tax any income the asset achieves (income/dividend etc tax) and then tax again the asset on death (IHT)?
and is it on all assets? Ie if I bought John Terrys house in Keston as I reckon he’ll soon take a low ball offer would wealth tax apply to that type of asset also? And what about assets owned by companies? If so what if said company only has the asset but no income?
This is the problem isn’t it where do you draw the line when it comes to assets ? I live in the North but how many of you guys live in a £m + house ? That’s an asset so should you get a tax bill every year on its percentage increase ?
Only if its worth £50m or more. In which case you'd have enough other assets with which to pay the tax.
The definition of high net worth in the UK is £10m in assets and/or £1m in liquid assets. Is £50m a figure you have heard to be the likely threshold of a wealth tax?
Yes. As I said at the start of the conversation I am literally working pro bono for a think tank (proper one, well respected transparent funding etc) on a proposal for a wealth tax. I'm an economist (usually work in health economics) but am helping out with the modelling and analysis for the paper. And as outlined above there is a proposed sliding scale starting at 1% over £50m.
Sorry I missed that - I've seen £10m being reported/speculated. Based on it starting at 1% £50m+ would that percentage increases at higher thresholds?
What does the model indicate would be the tax take from all these people who have a net worth of more than £50m? (apologies if I've missed that info as well).
Its just a proposal. There are others but this one is i belive going to be the one most worked through and imo most credible. 1% over £50m, 2% over £100m 4% over 1bn.
Model isn't finalised. And I'm not at liberty to share numbers as it might steal a headline when the paper is released. It is in the rough ball park of figures talked about for other proposals.
The below is based on estimates (made by others) so don't quote me on that!
There are around 5,000 people in the UK worth more than £50m and there are around 150 billionaires. The figures I've seen quoted for tax revenue from a wealth tax are in the order of £24 billion a year. Based on your sliding scale, someone worth £1 billion today (and maintaining that level) would pay their entire current wealth in tax in 25 years. Their normal tax burden on top of that. Also most of their wealth will be in illiquid assets.
So based on that your model is anticipating getting an additional £24 billion a year in additional tax revenue from 5,150 individuals, although in reality most of that additional tax take would come from a few hundred individuals. The vast majority of that wealth will disappear abroad - far away from the clutches of HMRC.
Bonne chance, Canters
I could genuinely go into all the reasons why capital flight is a massive economic lie (though I wouldn't want to take that joy away from @Bournemouth Addick) but I can't be arsed. I will point out 2 facts.
1) despite all the media spewing over the last year that millionaires are leaving in their droves because of this government the official figures when released showed the exit rate to be 0.03%. About average for the last 20 years.
2) by my count at least 12 countries have already got wealth taxes (plus another couple like France that have voted for it more recently). The millionaire exit rate in those countries remains around 0.03%.
That exit rate will grow rapidly if a wealth tax along the lines you outlined was introduced. It isn't millionaires that will be the issue, it's the billionaires/high hundreds of millions.
Which is the fear mongering we are told any time we attempt to tackle an issue in the country. Or a threat from the very rich whenever we try and close loopholes like the non-dom status. However the evidence from countries like Iceland that have had wealth taxes and harsher ones at that for a number of years show its simply not the case.
Either way there is an argument that their UK assets will remain here, whether it be UK bonds, mortgages, stocks or property. Levy the tax on their remaining UK assets should they choose to leave. You don't get to own a part of the country and not contribute.
What is the net wealth tax in Iceland?
Gains
from the sale of and leasing income from, immovable property situated
in Iceland are taxed by assessment at a flat rate of 22% in the year
2024. Dividends paid by resident companies to non-residents individual
shareholders are subject to a final withholding tax at a rate of 22%. Net wealth tax has been abolished.
Gains should absolutely be taxed - nobody is arguing about that. Whether you call it gains, revenue, income (ings) or anything else.
I don't believe the AI summary you have quoted is quite right as per my understanding but maybe it wasn't the example I was looking for try Norway. 🤔
Using the example above, which is framed in nicely simple terms you get:
£50,000 income, £7,500 tax, leaves you £42,500 to live on. £100,000 income, £27,500 tax, leaves you £72,500 to live on. £1,000,000 income, £435,000 tax, leaves you £565,000 to live on.
So when it comes to paying the bills, the person with a £1,000,000 income has about thirteen times as much more to live on compared with the person with an income of £50,000.
If the person earning £1,000,000 a year was left with five times the income of the £50,000 person to live on, they would get £212,500 to make ends meet, and pay £787,500 tax.
Based on the current tax rates, you would need to earn £380,000 to net that £212,500 - so you are effectively proposing a tax rate of 100% on any earnings above £380k. The impact that would have on the economy is unfathomable.
Yes but it would fuck the high earners which a lot of people seem to want to do. Wreck the country as long as those greedy few get clobbered lol it’s a race to the bottom
The figures don't stand up, but the neither do the richest 1or 2% being millions better off after years and years of austerity. I don't think most people want to fuck the high earners, I think they want to see an end to those at the bottom suffering more and more cuts and instead having the richest paying more tax into a system that needs it.
You use the term greedy few yourself Andy.
But you shouldn’t blame the people it’s the system that needs changing. I have a small business that employs 137 people. There are a few in the business that earn more than I do and I own the business. I try to make it as rewarding as possible for every member of staff but the stupidity of things like NI increases, minimum wage increase (that does not just effect minimum wage earners ) I agree our system is fucked but taxing the creators is not the answer. Rather than trying to create a vibrant dynamic economy some people seem set on stifling it
Why is increasing the minimum wage stupid? People at the bottom have to live too. Why is the waiter in a restaurant or a shop assistant not worth an increase. Inflation up again this month, food prices up 4.5%, the person on minimum wage spends a greater proportion of their income on food than the boss of a company.
If people at the bottom of the pay structure were paid properly by the companies that employ them, there would be no need for the state to top up wages with universal credit.
I maintain my stance that you never voted tory, and were trolling people for years 😏
We have diverted somewhat from the thread topic - but it's been an interesting and civil discussions. Which was nice
Yes agreed and happy to leave it there. I've said my piece (probably too much). Accept that people have different perspectives based on backgrounds and experiences. Also thay some have different tipping points. For me I wasnt that for this a couple years ago. In fact I was pretty anti it. But my assessments over the last few years show no other way out. The traditional methods have failed and doubling down has only double failed. We have to try something different. Maybe its a bit of a hail mary but i cant see any other way out. The 2 options on the table are this or fascism. I know which one I prefer.
More than happy to chew anyone's ear off about this stuff in the pub. Those who know me might say avoid!!
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, it’s higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
Here you go again, someone who has made a lot of money must have done so through some dodgy or immoral means. That’s really not a good look. Your assumptions that people’s wealth must stem from investment income is also incorrect.
the vast majority of the examples I gave have made the majority of their money through earnings, via PAYE.
let me example the one of the three on my floor who reports to me.
he controls in the region of £40m of income (per annum). By control I mean if he moved to a rival company, most of that £40m would move with him.
because of that (I’m not giving exact figures!) he earns a 7 figure salary and the same again in bonus. In addition he has LTI’s by way of shares that vest after 5 years, they are multiples of his annual salary. It would not be stupid to think, that dependent on share price his gross reward in a 5 year period is double figure millions, net basis even after tax is going to be double figure.
so firstly you are completely wrong that most of his wealth has come from investment income. Secondly he is not paying less than anyone else on PAYE.
thats your first issue, the problem with Math, statistics and modelling is they are rarely correct in the real world.
Do I think wealth inequality exists, yes, do I think it needs addressing, yes. Do I think a wealth tax will resolve that, nope, not in the slightest, I’m not convinced it will raise anything at all in the long run and may even go backwards.
as for Gary’s economics, whilst I agree with bits of what he says, like most in the public eye he stretches the truth and often gets found out ‘the Duke of Westminster pays no tax’ 😂🙈
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, it’s higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
Here you go again, someone who has made a lot of money must have done so through some dodgy or immoral means. That’s really not a good look. Your assumptions that people’s wealth must stem from investment income is also incorrect.
the vast majority of the examples I gave have made the majority of their money through earnings, via PAYE.
let me example the one of the three on my floor who reports to me.
he controls in the region of £40m of income (per annum). By control I mean if he moved to a rival company, most of that £40m would move with him.
because of that (I’m not giving exact figures!) he earns a 7 figure salary and the same again in bonus. In addition he has LTI’s by way of shares that vest after 5 years, they are multiples of his annual salary. It would not be stupid to think, that dependent on share price his gross reward in a 5 year period is double figure millions, net basis even after tax is going to be double figure.
so firstly you are completely wrong that most of his wealth has come from investment income. Secondly he is not paying less than anyone else on PAYE.
thats your first issue, the problem with Math, statistics and modelling is they are rarely correct in the real world.
Do I think wealth inequality exists, yes, do I think it needs addressing, yes. Do I think a wealth tax will resolve that, nope, not in the slightest, I’m not convinced it will raise anything at all in the long run and may even go backwards.
as for Gary’s economics, whilst I agree with bits of what he says, like most in the public eye he stretches the truth and often gets found out ‘the Duke of Westminster pays no tax’ 😂🙈
Not sure the need for the petulant opening. I literally said we aren't going to agree on thay point due to different perspectives so let's move on.
You hadn't mentioned a bonus before, that does make the maths works slightly more than before.
You can say you don't like it but there is plenty of evidence in other countries that a wealth tax does work. If only we could get out of the UK US centric bubble we have here in the UK and we could look at what is actually working around the world. There is a groundswell towards this. France and Spain have voted in favour by large majorities in the last year. Its huge. Plenty of south American countries are seriously considering it. It would be nice to be able to have a grown up evidence based conversation about it in the UK rather than people just screaming "we hate success" "Politics of envy" and "they'll all leave" when the evidence is the opposite.
Glad we are now agreeing it's a problem. What is your solution to it if this won't work?
Gary has never actually said that. What he says is the Duke of Westminster paid zero inheritance tax on the 10billion he inherited. Which is true. That the vehicle for avoiding IHT had paid some tax every 10 years before hand and will continue to do so is relevant but doesn't undermine that point.
As I said to Bob. Conversations been great, starting to get a bit tetchy tho so I'm gonna leave it there. What I said to Bob was a nice finish so I'll repost it.
We have diverted somewhat from the thread topic - but it's been an interesting and civil discussions. Which was nice
Yes agreed and happy to leave it there. I've said my piece (probably too much). Accept that people have different perspectives based on backgrounds and experiences. Also thay some have different tipping points. For me I wasnt that for this a couple years ago. In fact I was pretty anti it. But my assessments over the last few years show no other way out. The traditional methods have failed and doubling down has only double failed. We have to try something different. Maybe its a bit of a hail mary but i cant see any other way out. The 2 options on the table are this or fascism. I know which one I prefer.
More than happy to chew anyone's ear off about this stuff in the pub. Those who know me might say avoid!!
Using the example above, which is framed in nicely simple terms you get:
£50,000 income, £7,500 tax, leaves you £42,500 to live on. £100,000 income, £27,500 tax, leaves you £72,500 to live on. £1,000,000 income, £435,000 tax, leaves you £565,000 to live on.
So when it comes to paying the bills, the person with a £1,000,000 income has about thirteen times as much more to live on compared with the person with an income of £50,000.
If the person earning £1,000,000 a year was left with five times the income of the £50,000 person to live on, they would get £212,500 to make ends meet, and pay £787,500 tax.
Based on the current tax rates, you would need to earn £380,000 to net that £212,500 - so you are effectively proposing a tax rate of 100% on any earnings above £380k. The impact that would have on the economy is unfathomable.
Yes but it would fuck the high earners which a lot of people seem to want to do. Wreck the country as long as those greedy few get clobbered lol it’s a race to the bottom
The figures don't stand up, but the neither do the richest 1or 2% being millions better off after years and years of austerity. I don't think most people want to fuck the high earners, I think they want to see an end to those at the bottom suffering more and more cuts and instead having the richest paying more tax into a system that needs it.
You use the term greedy few yourself Andy.
But you shouldn’t blame the people it’s the system that needs changing. I have a small business that employs 137 people. There are a few in the business that earn more than I do and I own the business. I try to make it as rewarding as possible for every member of staff but the stupidity of things like NI increases, minimum wage increase (that does not just effect minimum wage earners ) I agree our system is fucked but taxing the creators is not the answer. Rather than trying to create a vibrant dynamic economy some people seem set on stifling it
Why is increasing the minimum wage stupid? People at the bottom have to live too. Why is the waiter in a restaurant or a shop assistant not worth an increase. Inflation up again this month, food prices up 4.5%, the person on minimum wage spends a greater proportion of their income on food than the boss of a company.
If people at the bottom of the pay structure were paid properly by the companies that employ them, there would be no need for the state to top up wages with universal credit.
I maintain my stance that you never votes tory, and we're trolling people for years 😏
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, its higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, its higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, it’s higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
Here you go again, someone who has made a lot of money must have done so through some dodgy or immoral means. That’s really not a good look. Your assumptions that people’s wealth must stem from investment income is also incorrect.
the vast majority of the examples I gave have made the majority of their money through earnings, via PAYE.
let me example the one of the three on my floor who reports to me.
he controls in the region of £40m of income (per annum). By control I mean if he moved to a rival company, most of that £40m would move with him.
because of that (I’m not giving exact figures!) he earns a 7 figure salary and the same again in bonus. In addition he has LTI’s by way of shares that vest after 5 years, they are multiples of his annual salary. It would not be stupid to think, that dependent on share price his gross reward in a 5 year period is double figure millions, net basis even after tax is going to be double figure.
so firstly you are completely wrong that most of his wealth has come from investment income. Secondly he is not paying less than anyone else on PAYE.
thats your first issue, the problem with Math, statistics and modelling is they are rarely correct in the real world.
Do I think wealth inequality exists, yes, do I think it needs addressing, yes. Do I think a wealth tax will resolve that, nope, not in the slightest, I’m not convinced it will raise anything at all in the long run and may even go backwards.
as for Gary’s economics, whilst I agree with bits of what he says, like most in the public eye he stretches the truth and often gets found out ‘the Duke of Westminster pays no tax’ 😂🙈
Not sure the need for the petulant opening. I literally said we aren't going to agree on thay point due to different perspectives so let's move on.
You hadn't mentioned a bonus before, that does make the maths works slightly more than before.
You can say you don't like it but there is plenty of evidence in other countries that a wealth tax does work. If only we could get out of the UK US centric bubble we have here in the UK and we could look at what is actually working around the world. There is a groundswell towards this. France and Spain have voted in favour by large majorities in the last year. Its huge. Plenty of south American countries are seriously considering it. It would be nice to be able to have a grown up evidence based conversation about it in the UK rather than people just screaming "we hate success" "Politics of envy" and "they'll all leave" when the evidence is the opposite.
Glad we are now agreeing it's a problem. What is your solution to it if this won't work?
Gary has never actually said that. What he says is the Duke of Westminster paid zero inheritance tax on the 10billion he inherited. Which is true. That the vehicle for avoiding IHT had paid some tax every 10 years before hand and will continue to do so is relevant but doesn't undermine that point.
As I said to Bob. Conversations been great, starting to get a bit tetchy tho so I'm gonna leave it there. What I said to Bob was a nice finish so I'll repost it.
We have diverted somewhat from the thread topic - but it's been an interesting and civil discussions. Which was nice
Yes agreed and happy to leave it there. I've said my piece (probably too much). Accept that people have different perspectives based on backgrounds and experiences. Also thay some have different tipping points. For me I wasnt that for this a couple years ago. In fact I was pretty anti it. But my assessments over the last few years show no other way out. The traditional methods have failed and doubling down has only double failed. We have to try something different. Maybe its a bit of a hail mary but i cant see any other way out. The 2 options on the table are this or fascism. I know which one I prefer.
More than happy to chew anyone's ear off about this stuff in the pub. Those who know me might say avoid!!
See video of Gary stating the Duke doesn't pay income tax (or more precisely him saying more than once 'so you think the DoW pays income tax') this is the shortened version, there are also other times of him on video saying the same thing on other interviews/podcasts etc, he also seems to confuse IHT with his 60% tax rate on income, he clearly doesn't understand how a trust works which surprises me. He suggests the rate for a wealth tax will start at 2% above £10m.
Saying the DoW doesn't pay inheritance tax (when he should know a trust cannot die) is like me saying 99.9% of the country are not paying Periodic tax the charlatans! As Daniel Priestly pointed out to him, depending how long the duke lives the trust may actually pay more than 40%.
(For clarity, the DoW is the 22nd highest tax payer in the country.)
About every other post of mine has consistently mentioned bonuses!
I understand only around 5 countries have a Wealth tax now (in the OECD), more importantly 30 years ago 12 countries did - so far more have removed it than added it (1 has brought it in, 8 dropped it) - is that an indicator of how well it works (or maybe doesn't)?
The problems this country faces, financially, are multi faceted and have occurred over many many decades and cannot be undone in one move or even one decade, so much needs changing I could write a list of 101 things, sadly recent governments are incapable. But a few (almost none of which help me I might add!):
1. Scrap our tax system and start again, it's had too many elastoplasts put on it needs a complete reset. Scrap NI for instance and just have one income tax that everyone pays on income, align rates for things like CGT, dividend tax etc. Scrap employers NI to be picked up on Corp tax etc. Investment also needs to be made in making sure we collect what we should, whether that's from the window cleaner or the multi billionaire.
2. Over time remove almost all benefits (some will need to stay) and replace with a universal income for all adults (in conjunction with 1 which of course will mean higher rates), scrap the tax free allowance (as that in effect will be replaced with the universal income for all, as well as the state pension being replaced by the UI). I'd also add at least one, but possible two more tax bands, at say £250k and £400k. Scrap things like winter fuel allowance, we don't need all these separate payments and admin costs, just make them part of the UI.
3. will of course mean a lot of jobs lots in the Gov sector managing benefits, those jobs/costs should be moved to education (not necessarily 'academic' in the usual sense of the word). A more educated country (In the right areas) will aide growth.
4. Make the UK attractive to investment, make it attractive to start your own business, together with education will see the next generation of entrepreneurs and the country grow.
5. We need far more people in work, over 9m people aged 18-64 are not in paid work, that's a fifth of the country in that age bracket, whilst clearly some may be in education, others may be too ill to work, there is still a huge number inactive that we need out there, but of course we also need to create jobs (see above).
6. Invest in infrastructure and housing, for 40 years we haven't built enough property (homes) and there really is no excuse. Government could easily build homes and sell for profit (keeping some for rental). Remember Property is where a huge amount of wealth is held.
Just a few basic things, there are 100's more as the above will not alone solve this countries problems, some maybe pipe dreams, but I've had a go!
EDIT: if you watch the full Gary and Daniel 2 hour video, Daniel explains in some detail why in the US they blame the government and how in the UK we blame the rich.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, it’s higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
Here you go again, someone who has made a lot of money must have done so through some dodgy or immoral means. That’s really not a good look. Your assumptions that people’s wealth must stem from investment income is also incorrect.
the vast majority of the examples I gave have made the majority of their money through earnings, via PAYE.
let me example the one of the three on my floor who reports to me.
he controls in the region of £40m of income (per annum). By control I mean if he moved to a rival company, most of that £40m would move with him.
because of that (I’m not giving exact figures!) he earns a 7 figure salary and the same again in bonus. In addition he has LTI’s by way of shares that vest after 5 years, they are multiples of his annual salary. It would not be stupid to think, that dependent on share price his gross reward in a 5 year period is double figure millions, net basis even after tax is going to be double figure.
so firstly you are completely wrong that most of his wealth has come from investment income. Secondly he is not paying less than anyone else on PAYE.
thats your first issue, the problem with Math, statistics and modelling is they are rarely correct in the real world.
Do I think wealth inequality exists, yes, do I think it needs addressing, yes. Do I think a wealth tax will resolve that, nope, not in the slightest, I’m not convinced it will raise anything at all in the long run and may even go backwards.
as for Gary’s economics, whilst I agree with bits of what he says, like most in the public eye he stretches the truth and often gets found out ‘the Duke of Westminster pays no tax’ 😂🙈
Not sure the need for the petulant opening. I literally said we aren't going to agree on thay point due to different perspectives so let's move on.
You hadn't mentioned a bonus before, that does make the maths works slightly more than before.
You can say you don't like it but there is plenty of evidence in other countries that a wealth tax does work. If only we could get out of the UK US centric bubble we have here in the UK and we could look at what is actually working around the world. There is a groundswell towards this. France and Spain have voted in favour by large majorities in the last year. Its huge. Plenty of south American countries are seriously considering it. It would be nice to be able to have a grown up evidence based conversation about it in the UK rather than people just screaming "we hate success" "Politics of envy" and "they'll all leave" when the evidence is the opposite.
Glad we are now agreeing it's a problem. What is your solution to it if this won't work?
Gary has never actually said that. What he says is the Duke of Westminster paid zero inheritance tax on the 10billion he inherited. Which is true. That the vehicle for avoiding IHT had paid some tax every 10 years before hand and will continue to do so is relevant but doesn't undermine that point.
As I said to Bob. Conversations been great, starting to get a bit tetchy tho so I'm gonna leave it there. What I said to Bob was a nice finish so I'll repost it.
We have diverted somewhat from the thread topic - but it's been an interesting and civil discussions. Which was nice
Yes agreed and happy to leave it there. I've said my piece (probably too much). Accept that people have different perspectives based on backgrounds and experiences. Also thay some have different tipping points. For me I wasnt that for this a couple years ago. In fact I was pretty anti it. But my assessments over the last few years show no other way out. The traditional methods have failed and doubling down has only double failed. We have to try something different. Maybe its a bit of a hail mary but i cant see any other way out. The 2 options on the table are this or fascism. I know which one I prefer.
More than happy to chew anyone's ear off about this stuff in the pub. Those who know me might say avoid!!
See video of Gary stating the Duke doesn't pay income tax (or more precisely him saying more than once 'so you think the DoW pays income tax') this is the shortened version, there are also other times of him on video saying the same thing on other interviews/podcasts etc, he also seems to confuse IHT with his 60% tax rate on income, he clearly doesn't understand how a trust works which surprises me. He suggests the rate for a wealth tax will start at 2% above £10m.
Saying the DoW doesn't pay inheritance tax (when he should know a trust cannot die) is like me saying 99.9% of the country are not paying Periodic tax the charlatans! As Daniel Priestly pointed out to him, depending how long the duke lives the trust may actually pay more than 40%.
(For clarity, the DoW is the 22nd highest tax payer in the country.)
About every other post of mine has consistently mentioned bonuses!
I understand only around 5 countries have a Wealth tax now (in the OECD), more importantly 30 years ago 12 countries did - so far more have removed it than added it (1 has brought it in, 8 dropped it) - is that an indicator of how well it works (or maybe doesn't)?
The problems this country faces, financially, are multi faceted and have occurred over many many decades and cannot be undone in one move or even one decade, so much needs changing I could write a list of 101 things, sadly recent governments are incapable. But a few (almost none of which help me I might add!):
1. Scrap our tax system and start again, it's had too many elastoplasts put on it needs a complete reset. Scrap NI for instance and just have one income tax that everyone pays on income, align rates for things like CGT, dividend tax etc. Scrap employers NI to be picked up on Corp tax etc. Investment also needs to be made in making sure we collect what we should, whether that's from the window cleaner or the multi billionaire.
2. Over time remove almost all benefits (some will need to stay) and replace with a universal income for all adults (in conjunction with 1 which of course will mean higher rates), scrap the tax free allowance (as that in effect will be replaced with the universal income for all, as well as the state pension being replaced by the UI). I'd also add at least one, but possible two more tax bands, at say £250k and £400k. Scrap things like winter fuel allowance, we don't need all these separate payments and admin costs, just make them part of the UI.
3. will of course mean a lot of jobs lots in the Gov sector managing benefits, those jobs/costs should be moved to education (not necessarily 'academic' in the usual sense of the word). A more educated country (In the right areas) will aide growth.
4. Make the UK attractive to investment, make it attractive to start your own business, together with education will see the next generation of entrepreneurs and the country grow.
5. We need far more people in work, over 9m people aged 18-64 are not in paid work, that's a fifth of the country in that age bracket, whilst clearly some may be in education, others may be too ill to work, there is still a huge number inactive that we need out there, but of course we also need to create jobs (see above).
6. Invest in infrastructure and housing, for 40 years we haven't built enough property (homes) and there really is no excuse. Government could easily build homes and sell for profit (keeping some for rental). Remember Property is where a huge amount of wealth is held.
Just a few basic things, there are 100's more as the above will not alone solve this countries problems, some maybe pipe dreams, but I've had a go!
EDIT: if you watch the full Gary and Daniel 2 hour video, Daniel explains in some detail why in the US they blame the government and how in the UK we blame the rich.
Hard to disagree with a lot of what you propose I've been a proponent of UBI for much longer than I have been of wealth taxes.
2 concerns though. Surely to pay for UBI your redesigned tax system will need to have an element of the ultra rich paying much much more thannthey currently do. Akin to a wealth tax?
And on point 5 I worry what can be done. Health is my day job and we have 7.5 million people on NHS waiting lists. If half of those are unable to work while waiting once they wait 6 months they have a 50% chance of returning to work ever, at a year its barely 10%. Long term, get rid of waiting lists, quick treatment quick return to work. But the current cohort there is little we can do for them. Targeted help may get small numbers back to work but there are a large number who will never work again. The other cohort of people who are out of work are the over 50s mortgage free who stopped working during or soon after Covid as they realised they didn't need to. I'm simply not sure we will persuade them returning to work is something they should do. And UBI won't help that.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
We can argue the toss about what constitutes exploitation/bad business practices/inheritance etc. But we're never gonna agree on that and it's largely a matter of opinion based on where your morals lie. So I'll try a different tack.
Do you or do you need think wealth inequality in the UK needs addressing?
Personally I do. It's quite clear from my work and background it is acting as a huge anchor on the UK economy.
Whether or not they got there the right way they are now there. They have high salaries which is great and no one is begrudging them that. The maths says the majority of that net worth will have had to come from investment growth, something most people don't have. If they do pay tax on that it will be at a lower rate income tax. With inequality so large is it wrong to ask them to pay a little more?
Even if they pay "everything that is due" it is still a lower rate than someone who only gets income through a Salary. A wealth tax would not even close to equalise that rate.
Most of your arguments stem from trickle down economics. It's very ingrained in the psyche of older generations in the UK. But it's disproven. It worked for a short time but 50 years of mist of the western world religiously following it and repeatedly doubling down has got us where exactly? Massive inequality, a society that isn't functioning and an economy not growing. And as the ultra rich have chewed up the poor and working classes they are now doing the same to the middle classes who are actually the ones starting and running businesses and creating growth. But there is no one else and no other wealth to chew up. And there is no where else to get money from so the government bring in things like the ridiculous NI lower bound. Say what you want about Gary's economics and the shock lines he says to grab headlines. His long form assessments of what has happened to the UK economy are bang on.
As for your last line. I'm in the same boat. As are almost all of my friends. Degree educated people in their 20s or 30s are leaving at rates never seen before. I worked out 40% of my uni group of mates are now no longer in the UK, it’s higher for my wife (she went to Cambridge). Our wedding was like the 4 corners of the earth coming together! The reason for this is that an educated young person can relative to cost of living be at least twice as well off in at least 20 other countries as well as the opportunity to live under much more progressive social policy.
Here you go again, someone who has made a lot of money must have done so through some dodgy or immoral means. That’s really not a good look. Your assumptions that people’s wealth must stem from investment income is also incorrect.
the vast majority of the examples I gave have made the majority of their money through earnings, via PAYE.
let me example the one of the three on my floor who reports to me.
he controls in the region of £40m of income (per annum). By control I mean if he moved to a rival company, most of that £40m would move with him.
because of that (I’m not giving exact figures!) he earns a 7 figure salary and the same again in bonus. In addition he has LTI’s by way of shares that vest after 5 years, they are multiples of his annual salary. It would not be stupid to think, that dependent on share price his gross reward in a 5 year period is double figure millions, net basis even after tax is going to be double figure.
so firstly you are completely wrong that most of his wealth has come from investment income. Secondly he is not paying less than anyone else on PAYE.
thats your first issue, the problem with Math, statistics and modelling is they are rarely correct in the real world.
Do I think wealth inequality exists, yes, do I think it needs addressing, yes. Do I think a wealth tax will resolve that, nope, not in the slightest, I’m not convinced it will raise anything at all in the long run and may even go backwards.
as for Gary’s economics, whilst I agree with bits of what he says, like most in the public eye he stretches the truth and often gets found out ‘the Duke of Westminster pays no tax’ 😂🙈
Not sure the need for the petulant opening. I literally said we aren't going to agree on thay point due to different perspectives so let's move on.
You hadn't mentioned a bonus before, that does make the maths works slightly more than before.
You can say you don't like it but there is plenty of evidence in other countries that a wealth tax does work. If only we could get out of the UK US centric bubble we have here in the UK and we could look at what is actually working around the world. There is a groundswell towards this. France and Spain have voted in favour by large majorities in the last year. Its huge. Plenty of south American countries are seriously considering it. It would be nice to be able to have a grown up evidence based conversation about it in the UK rather than people just screaming "we hate success" "Politics of envy" and "they'll all leave" when the evidence is the opposite.
Glad we are now agreeing it's a problem. What is your solution to it if this won't work?
Gary has never actually said that. What he says is the Duke of Westminster paid zero inheritance tax on the 10billion he inherited. Which is true. That the vehicle for avoiding IHT had paid some tax every 10 years before hand and will continue to do so is relevant but doesn't undermine that point.
As I said to Bob. Conversations been great, starting to get a bit tetchy tho so I'm gonna leave it there. What I said to Bob was a nice finish so I'll repost it.
We have diverted somewhat from the thread topic - but it's been an interesting and civil discussions. Which was nice
Yes agreed and happy to leave it there. I've said my piece (probably too much). Accept that people have different perspectives based on backgrounds and experiences. Also thay some have different tipping points. For me I wasnt that for this a couple years ago. In fact I was pretty anti it. But my assessments over the last few years show no other way out. The traditional methods have failed and doubling down has only double failed. We have to try something different. Maybe its a bit of a hail mary but i cant see any other way out. The 2 options on the table are this or fascism. I know which one I prefer.
More than happy to chew anyone's ear off about this stuff in the pub. Those who know me might say avoid!!
See video of Gary stating the Duke doesn't pay income tax (or more precisely him saying more than once 'so you think the DoW pays income tax') this is the shortened version, there are also other times of him on video saying the same thing on other interviews/podcasts etc, he also seems to confuse IHT with his 60% tax rate on income, he clearly doesn't understand how a trust works which surprises me. He suggests the rate for a wealth tax will start at 2% above £10m.
Saying the DoW doesn't pay inheritance tax (when he should know a trust cannot die) is like me saying 99.9% of the country are not paying Periodic tax the charlatans! As Daniel Priestly pointed out to him, depending how long the duke lives the trust may actually pay more than 40%.
(For clarity, the DoW is the 22nd highest tax payer in the country.)
About every other post of mine has consistently mentioned bonuses!
I understand only around 5 countries have a Wealth tax now (in the OECD), more importantly 30 years ago 12 countries did - so far more have removed it than added it (1 has brought it in, 8 dropped it) - is that an indicator of how well it works (or maybe doesn't)?
The problems this country faces, financially, are multi faceted and have occurred over many many decades and cannot be undone in one move or even one decade, so much needs changing I could write a list of 101 things, sadly recent governments are incapable. But a few (almost none of which help me I might add!):
1. Scrap our tax system and start again, it's had too many elastoplasts put on it needs a complete reset. Scrap NI for instance and just have one income tax that everyone pays on income, align rates for things like CGT, dividend tax etc. Scrap employers NI to be picked up on Corp tax etc. Investment also needs to be made in making sure we collect what we should, whether that's from the window cleaner or the multi billionaire.
2. Over time remove almost all benefits (some will need to stay) and replace with a universal income for all adults (in conjunction with 1 which of course will mean higher rates), scrap the tax free allowance (as that in effect will be replaced with the universal income for all, as well as the state pension being replaced by the UI). I'd also add at least one, but possible two more tax bands, at say £250k and £400k. Scrap things like winter fuel allowance, we don't need all these separate payments and admin costs, just make them part of the UI.
3. will of course mean a lot of jobs lots in the Gov sector managing benefits, those jobs/costs should be moved to education (not necessarily 'academic' in the usual sense of the word). A more educated country (In the right areas) will aide growth.
4. Make the UK attractive to investment, make it attractive to start your own business, together with education will see the next generation of entrepreneurs and the country grow.
5. We need far more people in work, over 9m people aged 18-64 are not in paid work, that's a fifth of the country in that age bracket, whilst clearly some may be in education, others may be too ill to work, there is still a huge number inactive that we need out there, but of course we also need to create jobs (see above).
6. Invest in infrastructure and housing, for 40 years we haven't built enough property (homes) and there really is no excuse. Government could easily build homes and sell for profit (keeping some for rental). Remember Property is where a huge amount of wealth is held.
Just a few basic things, there are 100's more as the above will not alone solve this countries problems, some maybe pipe dreams, but I've had a go!
EDIT: if you watch the full Gary and Daniel 2 hour video, Daniel explains in some detail why in the US they blame the government and how in the UK we blame the rich.
Hard to disagree with a lot of what you propose I've been a proponent of UBI for much longer than I have been of wealth taxes.
2 concerns though. Surely to pay for UBI your redesigned tax system will need to have an element of the ultra rich paying much much more thannthey currently do. Akin to a wealth tax?
And on point 5 I worry what can be done. Health is my day job and we have 7.5 million people on NHS waiting lists. If half of those are unable to work while waiting once they wait 6 months they have a 50% chance of returning to work ever, at a year it's barely 10%. Long term, get rid of waiting lists, quick treatment quick return to work. But the current cohort there is little we can do for them. Targeted help may get small numbers back to work but there are a large number who will never work again. The other cohort of people who are out of work are the over 50s mortgage free who stopped working during or soon after Covid as they realised they didn't need to. I'm simply not sure we will persuade them returning to work is something they should do. And UBI won't help that.
I think if we met we'd actually agree on an awful lot, our main differences would be how we believe things can change for the better, I don't believe the rich need to be paying (much, if any) more.
For UBI & redesigned tax system, for the majority it would be a net zero game. i.e. myself at my level of income I wouldn't expect to be earning more overall, it would just be the income comes from a different source.
I would receive (as an example) £15k from Government that I don't currently get, but the tax rates would adjust so that after tax I receive roughly £15k less in my net salary. Again as an example the 20% band now starts at my first earnings (UI is tax free and remembering no NI) but may actually be 25% rate, the 40% band may be 42.5% and so on.
The idea is at the very lower end people would be better off. Take my wife, earns circa £17k gross paying a little bit of tax and NI netting £15k, she may be 8-10k better off. To balance that would be 1. two new bands at higher levels (say 250k and 400k), 2. in addition bringing the other taxes like capital gains, dividend tax etc into line with the main bands.
We need to grow out of this. Imagine if we had 10,000 new companies start in 2025 that by 2030 1,000 were successful companies some trading worldwide, employing 10's of 1,000's of people in the UK and were hugely profitable. 1. More people in work equals more tax revenue. 2. new companies making new profits equals more tax revenue. Some of the remaining 9,000 can also contribute, some may be small employing less than 10 people but making a small profit, some may be a bit bigger, employing 10-100 people and just breaking even and so on.
There's a reason for instance the American stock market has increased 5-6x the UK, why US average wages in real terms are up something like 70% in the last 15 years and ours have reduced.
I want people to want to come here, to build businesses, I want those of us already here to do the same. Lets not stifle that, lets help and encourage it.
I agree with some of your points on the remainder, NHS waiting lists, we need better health education (again back to my earlier post about investing in non academic education) as well as better/quicker services. I think you'd agree less people needing health treatment in the first place would help as well as cutting waiting lists.
On inactive, I think you'd be surprised (but partly linked to the above)
Aged 25 - 49.
565,000 unemployed (i.e. looking and ready to work) 1,050,000 Sick 950,000 caring 220,000 students 350,000 other.
So of the roughly 3m in that age band, only about 15% are looking to work, whereas I would have expected well over 50%?
The 50-64
205,000 unemployed (i.e. looking and ready to work) 1,435,000 Sick 500,000 caring 0 students (to few for the chart!) 435,000 other 1,200,000 retired.
I expect the cohort to change dramatically in the coming decades, many in the 60-64 would have planned to retire at 60 (most final salary pensions back then were set to start at 60). So only around 20-25% are actually retired.
Something to ponder - we also need to shrink the state, we're at 45% of the economy comes from Government, that cannot continue. An example in one of Gary's videos (so don't shoot me if numbers aren't right). If those with more than £10m paid a 1% wealth tax above that level, that's roughly 20bn of revenue (assuming everyone paid it and no avoidance, leaving country etc). That's less than a weeks government expenditure....... that saves/gives each adult in the UK about £250 a head, it simply won't move the dial (and IMHO won't actually raise the full amount).
And for those old enough, remember the 50/60's and maybe into the early 70's - most 'working class' people never thought they'd be able to own their own home (sounds much like now right?) - but what changed for the baby boomers?.... thatcher sold them the countries/government one's - and sadly they didn't build anymore to replace them.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
My firm doesn’t have one owner (it has probably millions) the people working within have very much created jobs and growth, not the shareholders/owners.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
My firm doesn’t have one owner (it has probably millions) the people working within have very much created jobs and growth, not the shareholders/owners.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
I think your explanation is overly simplistic. What happened in 97 was a reaction/correction/attempt to adapt to the changes that were happening as a result of what had happened since the 70s imo. The state used to own its assets, housing, land, buildings, key industries etc. Those are all owned now by companies like Blackrock and ultra rich individuals both at home and abroad. A country cannot function whilst being owned by a small number of people/companies. We can argue the toss over whether or not selling literally everything was the right decision but for me the key bit was that none of the cash raised was reinvested, it was all given away as tax breaks (largely for the richest in society). The reason we blame the rich is because these people and companies have untold control over government decisions (something they are only just waking up to in the US) so whilst government decisions are not helping its clear to see who is actually pulling those strings.
We have structural issues, low pay, low productivity (driven by low pay), infrastructure from the 70s, poor public service provision, massive inequality. Its all well and good saying "we must get growth" but history shows you don't get growth until you solve those issues. In fact its solving those issues that gets you growth. We've had 50 years where the stated aim has been growth but as you say growth per head has been miniscule in that time (but the very richest are 8000% better off so where has that come from?). Doubling down on this approach will only double the failure. Since the 2008 crisis the countries that have not focused on growth but have focused on social metrics (some don't even report on growth as a metric internally) are the ones that have had consistent if not spectacular growth in that time. My view is if we focus on solving those structural issues and real societal change then growth will come. Until then we will simply stumble along trying to find ways to encourage investment (which will only further gut our middle classes) without addressing any of the actual problems.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
My firm doesn’t have one owner (it has probably millions) the people working within have very much created jobs and growth, not the shareholders/owners.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
We are never going to agree Rob, you are very good at holding your corner, I like the way you work, it would be marvellous to have a chat in the pub and I can see your logic from your point of view, but you keep avoiding the big question. I have not asked you why the country is skint at any point, but you keep answering it anyway. However we got here, the fact is the country is skint, the super rich have got richer and richer while everyone else has had to face austerity - which somehow had a positive outcome for the rich. You talk about growth being diluted, but that has not happened to the very rich, has it? My question is what would you do to sort it out, now? Long term your ideas seem to make sense, but the UK needs a quick fix. Pushing more people at the bottom into poverty is not the answer as far as I am concerned, so what else do you do to raise money?
You claim your colleagues have created work? How many people on average does each employ? If you are talking about the knock on effect of what they do, well I create work every time I buy a pint on that basis.
Evidence of tax avoidance? The mere existance of the tax lawyers is the evidence, and there is plenty in Private Eye on a regular basis about what goes on. It may not be thousands of people, but it isn't a handful either.
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
My firm doesn’t have one owner (it has probably millions) the people working within have very much created jobs and growth, not the shareholders/owners.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
I think your explanation is overly simplistic. What happened in 97 was a reaction/correction/attempt to adapt to the changes that were happening as a result of what had happened since the 70s imo. The state used to own its assets, housing, land, buildings, key industries etc. Those are all owned now by companies like Blackrock and ultra rich individuals both at home and abroad. A country cannot function whilst being owned by a small number of people/companies. We can argue the toss over whether or not selling literally everything was the right decision but for me the key bit was that none of the cash raised was reinvested, it was all given away as tax breaks (largely for the richest in society). The reason we blame the rich is because these people and companies have untold control over government decisions (something they are only just waking up to in the US) so whilst government decisions are not helping its clear to see who is actually pulling those strings.
We have structural issues, low pay, low productivity (driven by low pay), infrastructure from the 70s, poor public service provision, massive inequality. Its all well and good saying "we must get growth" but history shows you don't get growth until you solve those issues. In fact its solving those issues that gets you growth. We've had 50 years where the stated aim has been growth but as you say growth per head has been miniscule in that time (but the very richest are 8000% better off so where has that come from?). Doubling down on this approach will only double the failure. Since the 2008 crisis the countries that have not focused on growth but have focused on social metrics (some don't even report on growth as a metric internally) are the ones that have had consistent if not spectacular growth in that time. My view is if we focus on solving those structural issues and real societal change then growth will come. Until then we will simply stumble along trying to find ways to encourage investment (which will only further gut our middle classes) without addressing any of the actual problems.
I think we are talking about different things post 97. Yes very simplistic, but I’m referring to the state moving away from business funding salaries (enough to live on) to the state propping that up, in the main because we had a failing economy, of course what’s happened is the state can’t afford now to continue to do that (for numerous reasons).
Housing wasn’t sold to blackrock etc, they were sold to the working class but never replaced. They may have then sold them again, but that’s a whole different thing. Where would the state be now had they not of sold the houses and gold, or replaced them with new builds?
What ultimately has happened is the UK sold its appreciating assets (think property, or Gold etc). It’s why I’ve been saying for years to staff, buy appreciating assets. If I only ever sold my assets and spent it on living expenses I’d be an awful lot poorer long term.
you cannot blame in this instance the wealthy for understanding economics better than governments of the day. Nobody broke into the Bank of England and stole the gold at gun point, they bought it at the then market value (as I did).
Same for property, nobody held a gun 5 years later to the council tenant who bought their own home and stole it, they bought it at the then market price.
Its like blaming the Coates family for being so wealthy, how dare they spot a future gap in the market and build a hugely successful business, employ lots of people and pay lots of tax. I suspect Mrs Coates wealth has grown way more than 8000% - why is that a bad thing, is that not a good thing and should be celebrated? She (like most wealthy people) haven't stolen their wealth and it's not her fault the people running the country for decades have been a shambles!
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
My firm doesn’t have one owner (it has probably millions) the people working within have very much created jobs and growth, not the shareholders/owners.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
We are never going to agree Rob, you are very good at holding your corner, I like the way you work, it would be marvellous to have a chat in the pub and I can see your logic from your point of view, but you keep avoiding the big question. I have not asked you why the country is skint at any point, but you keep answering it anyway. However we got here, the fact is the country is skint, the super rich have got richer and richer while everyone else has had to face austerity - which somehow had a positive outcome for the rich. You talk about growth being diluted, but that has not happened to the very rich, has it? My question is what would you do to sort it out, now? Long term your ideas seem to make sense, but the UK needs a quick fix. Pushing more people at the bottom into poverty is not the answer as far as I am concerned, so what else do you do to raise money?
You claim your colleagues have created work? How many people on average does each employ? If you are talking about the knock on effect of what they do, well I create work every time I buy a pint on that basis.
Evidence of tax avoidance? The mere existance of the tax lawyers is the evidence, and there is plenty in Private Eye on a regular basis about what goes on. It may not be thousands of people, but it isn't a handful either.
Partly answered above. The reason for wealth growth is very variable, for some (like above) is due to them creating wealth through successful business. Some will be down to making the right investments (usually business), they haven't stolen it which is the current in flavor rhetoric, they haven't robbed you or I of money you should have had (in the main) nor have they somehow accumulated wealth by not paying the taxes they should have (again in the main). But it's an easy conclusion to make that because of austerity it must be the case that you're worse off because they are better off, thats not true (in the main).
I am probably wealthier than some of my colleagues despite earning no more (and often earning less) - is that my fault, or is it I made different decisions with my money to them which has had long term better outcomes? I didn't not pay tax (in fact I probably paid more over time due to investments).........
If I take the guy who works for me that I mentioned, he came in about 8 years ago, due to the business he brought in there are probably 20 people directly employed to work on those account. Had he not of joined and brought in that business we wouldn't have employed those staff, but get your point about the pub, although I would say it's the landlord (or brewery) rather than customer in that instance.
Tax is a very complex subject (hence it needs simplifying), however it is very important to make clear the difference between avoidance and evasion. I avoid tax (as will most on here), in the past I have employed an FA to assist with that. Pension contributions is avoiding tax, investing in an ISA or even premium bonds is also along with other tax exempt products. That is all legal and above board. However anyone who evades tax should be hung drawn and quartered!
As we go up the chain, it is not unreasonable for a business (which is what most are) to receive tax advice and act accordingly. But I agree some will push that too far and try to bend the rules (and not pay tax they should) which should be dealt with. But that's sadly the way of the world that not everyone plays fair. We seem to turn a blind eye to the little man/woman taking cash for work and not declaring it (which is evasion) even though it is estimated that alone is around £8bn a year in the UK. I don't agree with either and it should be stamped out, but that doesn't mean everyone who has been successful and accumulated wealth has done so in an underhand way or to the detriment of others, it's certainyl not the norm.
It's why I strongly disagree with the likes of Gary's economics on a lot of things and what he spouts. He'll pick on one's like the Duke of Westminster because he doesn't pay IHT (all true and quite legally as the trust pays periodic tax) which builds the rhetoric that these rich sods aren't paying what they should. The truth if he actually took the time to understand how the tax system and trusts work he would realise that he's so far wrong it's ridiculous yet people simply take him at his word. i.e. aside from IHT and Periodic tax (brought in to stop an avoidance of IHT), he doesn't know/understand that ANY income taken from the trust pays either 45% income tax or if taken as a dividend 39.25%, you cannot avoid that! He seemed to think the Duke simply took income tax free and only paid 0.6% a year periodic tax, he's shouted it enough times it must be true!
The semantic argument about what is income/earnings/wages/payment for laboue etc... is meaningless. Income is 'incomings' for which there is a tax liability.
Now let's look at actual figures as percentages are misleading in my opinion.
Income £50,000 = tax of £7,500
Income £100,000 = tax of £27,500
Income £1,000,000 = tax of £435,000
This assumes no clever tax avoidance schemes, and anyone on PAYE hasn't got a chance of avoiding tax. So tax as it is due.
So someone earning £1,000,000 (20x that of someone who earns £50k) pays 58x the tax. That seems pretty progressive to me (and you will all know my politics are left of centre).
Let's get on to wealth tax. Let's say I earn £10m pa - I pay tax of approximately £4.5m. I invest a high proportion of that net income in assets (property, art, classic cars, whatever) and when any of those assets are realised I pay CGT if applicable. Why should I then pay an additional wealth tax on my net worth, accumulated from net income?
Your post demonstrates exactly why the semantic argument about income/earnings needs to happen. As for the cohort of people we are talking about the majority of what they make is not under PAYE and therefore your entire example doesn't apply to them.
Of course what you set out is how the system was originally designed to work and did so about 50-70 years ago. It's how it would still work in the real world. But again those with net worth of the scale we are talking about may make some through PAYE but the vast majority is made through other means. Some of this is taxable some of it is not. Much of the other taxable bit is avoidable if they so choose.
To use Rob7Lee's above example someone with a net worth of 100m and makes 1-2m cash income a year that is subject to income tax/ PAYE etc. However on top of that they will be bringing in other cash through the various other means which may or may not be taxed depending on avoidance schemes and offshoring. And further on top of that they will be expecting to make a minimum of 15% a year asset growth on which they pay nothing until they withdraw it. But they are able to and frequently do borrow against this to fund further investments or lifestyle (chartering private jets, buying super yachts etc). The cost of this borrowing can then be offset against future earnings further reducing their tax liability. That's where the 4% comes from. There's also further tricks used by the ultra rich such as selling assets to themselves at a loss from one holding company to another in order to offset future tax liabilities. Musk did this with twitter buying it for 44m then selling to himself at an £11m loss to offset tax liability.
So yes if you only look at the traditional taxable bit of it then yes they do pay much more. But that misses the vast majority of what these people make. The whole point of the wealth tax conversation is to recognise that the inequality in society isn't about that traditional part of earnings but about wealth as a whole. And the wealth tax is the proposed solution to that.
How many people, roughly, do you think fall into this category of offshoring, selling assets to themselves at a loss, who borrow against asset security to fund private super yachts, chartering private planes and so on? It's not a huge number, Canters, and HMRC could easily focus on that cohort - prosecuting tax evasion and closing unfair avoidance loopholes. Tax people on what they should pay, but don't tax them again on what they have left - however much that might be.
All of my assets, liquid or otherwise, have been acquired from net income, the vast majority of which was under PAYE (and all that wasn't was fully declared). Whether that leaves me with net £100k, £2m or £20m is irrelevant - and that applies to the overwhelming majority of high net worth individuals. Chase the others by all means.
It's a small but growing number. But that's the point. The couple thousand individuals right at the top of the UK wealth distribution hold disproportionate wealth. The top 1% hold more than the bottom 70% combined. These are the people that should be targeted and that's what a wealth tax does. If we don't address this wealth inequality the UK economy will never recover. History shows in any developed nation growth comes when policy levers are pulled to reduce inequality. Not the other way around.
As for your suggestion of targeting the loopholes I agree that should be done in the first instance but, a) the people paid to find and explout them are much greater in number and paid much more than those paid to close them b) even if they were all closed as demonstrated by Sunak example above they still only pay an effective rate of 20ish % whilst still holding massively disproportionate amount of wealth. More than can be spent in several liftimes.
As said above all the research shows that those with a net worth of £50m or above did not get there the way you describe. The vast majority of them received multi million, multi generational wealth. The rest either had government cronyism leading to lucrative contracts or dodgy/exploitative business practices. There may be one or 2 who did it the "proper way" but there aren't many. It's a small enough cohort to study individuals and a massive %sample.
These are not wealth creators they are wealth hoarders.
Just one or two - but all the others are either inherited wealth, Government cronies, or dodgy businessmen?
I know at least 10 of the one or two and I suspect you know similar, Bob!
Why is it in this country so many love putting down success.
Thats what all the research shows. Exploitation is the term they use. Camel through the eye of the needle sort of stuff. Same picture in UK, Europe, US etc. I'm sure your anecdotes > data is definitely reliable and the picture these people paint of their lives is definitely 100% correct and not even a little bit spin.
It's not putting down success. Its asking those at the very top of the wealth distribution to pay a little more. It will actually create tax freedoms and more incentive for those actual businesses which are creating jobs and growth not hoarding obscene levels of wealth.
I work for the largest Reinsurance broker in the world, sadly i'm nearer the bottom of the food chain than the top, but am not complaining.
There are at least 3 people on my floor who would fall into your +£50m+ wealth tax bracket. All three are self made, have earned multiples of 7 figure salaries for many many years, I know two came from poor backgrounds, none of the three went to Uni. In the building there are likely at least another 10-15 in the above £50m bracket, no idea other than a couple what their back grounds were. Some will be multiples of the £50m so into your higher bands.
Our two closet competitors will have similar numbers of people at similar levels, I know one personally and am lucky to call a lifelong friend, he grew up in a council flat in bethnal green, he'd be worth north of £50m. Another (competitor) who's son was an F1 driver, again self made, worth multiples of the £50m and started his ow brokerage.
I have a number of clients (insurance company owners), again all will be well above that bracket. Not aware any of them came from money, some certainly not.
I know a number of reinsurers, some are friends, again a number will be in that bracket and the few I know well I know didn't come from money.
My old chairman, at least £150m, didn't come from money and one of the nicest most generous people I have ever met, stuff that literally brings tears to your eyes. Everyone loved working for him, myself included and I can guarantee he paid every penny of tax and some!
Now whilst some may have come from better background than others, I doubt any got to where they were due to family money buying them in (remember these are mostly employee's not owners).
Ever heard of Purelake Property in Bromley? The owner (my best friends cousin) would be in the next bracket up, north of £100m. Started as a sole trader builder, although to be fair he was a bit of an a$$ as did some work for him when we were young, always gave us the crapiest of jobs!
aside from the last two, all of the others wealth has been created from salary and bonus on PAYE although of course they will have invested much of that NET income as you would expect which no doubt will in part have appreciated and form part of their wealth.
So maybe i'm just lucky, but I just don't see the stereo type picture you paint of these tax avoiding nasty wealthy people who are simply out to not pay their 'fair share' and need hitting with a big stick.
I'm so glad i'm of the age I am, if it wasn't for having children here (all be it adult) i'd have left the UK by now. Still may do when I retire in a few years time. This country is literally just punching itself in the face day after day.
You will have to excuse my ignorance, if they work for a re-insurance broker, unless they founded the company, how are they self made?
Just an afterthought, the country is skint, we need more income. Where do you suggest that income comes from?
Self made in that it isn’t inherited money etc, they worked for it.
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
I am sure I am not alone in thinking that self made is starting a business, like the 10'000 new companies you envisage in the post above, not being employed in a business where if you are good at it the rewards are astronomical. They are not creating employment.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
My firm doesn’t have one owner (it has probably millions) the people working within have very much created jobs and growth, not the shareholders/owners.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
I think your explanation is overly simplistic. What happened in 97 was a reaction/correction/attempt to adapt to the changes that were happening as a result of what had happened since the 70s imo. The state used to own its assets, housing, land, buildings, key industries etc. Those are all owned now by companies like Blackrock and ultra rich individuals both at home and abroad. A country cannot function whilst being owned by a small number of people/companies. We can argue the toss over whether or not selling literally everything was the right decision but for me the key bit was that none of the cash raised was reinvested, it was all given away as tax breaks (largely for the richest in society). The reason we blame the rich is because these people and companies have untold control over government decisions (something they are only just waking up to in the US) so whilst government decisions are not helping its clear to see who is actually pulling those strings.
We have structural issues, low pay, low productivity (driven by low pay), infrastructure from the 70s, poor public service provision, massive inequality. Its all well and good saying "we must get growth" but history shows you don't get growth until you solve those issues. In fact its solving those issues that gets you growth. We've had 50 years where the stated aim has been growth but as you say growth per head has been miniscule in that time (but the very richest are 8000% better off so where has that come from?). Doubling down on this approach will only double the failure. Since the 2008 crisis the countries that have not focused on growth but have focused on social metrics (some don't even report on growth as a metric internally) are the ones that have had consistent if not spectacular growth in that time. My view is if we focus on solving those structural issues and real societal change then growth will come. Until then we will simply stumble along trying to find ways to encourage investment (which will only further gut our middle classes) without addressing any of the actual problems.
I think we are talking about different things post 97. Yes very simplistic, but I’m referring to the state moving away from business funding salaries (enough to live on) to the state propping that up, in the main because we had a failing economy, of course what’s happened is the state can’t afford now to continue to do that (for numerous reasons).
Housing wasn’t sold to blackrock etc, they were sold to the working class but never replaced. They may have then sold them again, but that’s a whole different thing. Where would the state be now had they not of sold the houses and gold, or replaced them with new builds?
What ultimately has happened is the UK sold its appreciating assets (think property, or Gold etc). It’s why I’ve been saying for years to staff, buy appreciating assets. If I only ever sold my assets and spent it on living expenses I’d be an awful lot poorer long term.
you cannot blame in this instance the wealthy for understanding economics better than governments of the day. Nobody broke into the Bank of England and stole the gold at gun point, they bought it at the then market value (as I did).
Same for property, nobody held a gun 5 years later to the council tenant who bought their own home and stole it, they bought it at the then market price.
Its like blaming the Coates family for being so wealthy, how dare they spot a future gap in the market and build a hugely successful business, employ lots of people and pay lots of tax. I suspect Mrs Coates wealth has grown way more than 8000% - why is that a bad thing, is that not a good thing and should be celebrated? She (like most wealthy people) haven't stolen their wealth and it's not her fault the people running the country for decades have been a shambles!
Just quoting the bit of the post I am responding to so its not too long.
Yes and that decision in 97 was to try and prop up the system and avoid the structural issues that had been built up since the 70s - namely privatisation, deregulation and increased power to large multinationals which had pushed pay down in real terms. As I said further up this thread if average pay had gone up with purchasing power since 1980 it would be 85K a year. We have a low pay problem. That government tried to hide it or get around it. The problem had already been set up.
No one is blaming the rich for that but they are saying something should be done to prevent that split getting too out of control. I am blaming the government for not reinvesting the money and for various decisions following that like buy to let mortgages etc. Its not even about blame. its about where we are now is clearly a problem. Something needs to be done about it. Whatever that is will have some impact on the ultra rich. You interpret that as blaming them. I see it as solving a structural problem.
The wealth of a certain cohort growing at 8000% whilst overall wealth has stagnated is a bad thing as it means their gains are only coming at the expense of others (not necessarily directly) and therefore are widening inequality.
A lot of your arguments rely on "traditional" economic arguments but I think there needs to be some recognition that the economic system and conditions we are living under don't match those of traditional capitalist thinking. Many of the major tenets of capitalism no longer hold - in most sectors we don't have real competition but large multinationals operating with oligopoly power and controlling whole sectors, the offshoring of profits isn't something in traditional economics models and is a drain on growth, the multiplier effect link is broken everywhere except for small local businesses, innovation has stagnated, the power of tech and the tech sector, the weakening of the middle classes etc. This system barely meets the criteria of capitalism so those traditional economic arguments don't hold. I think the term techno feudalism is the best description of the situation and will be what this period is called when looked back on as history in the future.
Whether or not you see these as problems - we do have to recognise these conditions exist and work within them. Levers that worked under other conditions will not work under these.
I highly recommend the following article in the FT from Martin Sandbu who is IMO one of their best commentators, and he has some competition. It will be of interest to @cantersaddick and his main principled detractors, @Rob7Lee and @bobmunro. While acknowledging the issues arounda wealth tax, he sets out to show that four of the main arguments against are based on myths, not facts (as I've suggested on the S&I thread. Unfortunately the FT is paywalled but I hope one way or another all three of you can access it. It's far too long to cut and paste here, especially as we are off topic. https://www.ft.com/content/7ec2c02f-d304-419d-ad12-f1fcfcce86a0
Also, I can't resist throwing in a grenade about examples of super-rich paying less than 4% tax. Here's one:
Roman Abramovic.
And if anyone wants to reply that he wasn't tax resident in the UK, I'd be interested to know where you believe he was tax resident, and why his activities with Chelsea shouldn't have made him subject to UK tax as an individual.
I highly recommend the following article in the FT from Martin Sandbu who is IMO one of their best commentators, and he has some competition. It will be of interest to @cantersaddick and his main principled detractors, @Rob7Lee and @bobmunro. While acknowledging the issues arounda wealth tax, he sets out to show that four of the main arguments against are based on myths, not facts (as I've suggested on the S&I thread. Unfortunately the FT is paywalled but I hope one way or another all three of you can access it. It's far too long to cut and paste here, especially as we are off topic. https://www.ft.com/content/7ec2c02f-d304-419d-ad12-f1fcfcce86a0
Also, I can't resist throwing in a grenade about examples of super-rich paying less than 4% tax. Here's one:
Roman Abramovic.
And if anyone wants to reply that he wasn't tax resident in the UK, I'd be interested to know where you believe he was tax resident, and why his activities with Chelsea shouldn't have made him subject to UK tax as an individual.
I will have a read.
Unfortunately as a society we often choose to believe the myths. Either because its so ingrained in our psyche (thanks to a billionaire owned media looking out for their own interests) or because its in individuals own interests.
@cantersaddick I agree with a lot there, but …… an awful lot of people are blaming the rich, especially the noisy one's with YouTube channels!! and that reverberates around the room, including this one.
I'm still to be convinced that trying to take money from one section, to this scale needed, will actually solve anything (or that it would even touch the sides), it may actually worsen the situation longer term. Even if we could and it does solve it, it'll be a temporary solution and yet another sticky plaster, unless the underlying issues are resolved we'll be here again in less than 10 years time. We have to deal with the proximate cause and to do so is multi faceted and sadly I fear beyond the ability of any government in the past and probably near future.
im not the expert as you can tell, but I still believe the solution is growth, without that we’re not getting out of the sticky stuff.
i don’t think there are any short term fixes, it there certainly needs to be some long ones, at best I’ve probably got 35 years left, I doubt I’ll see it in my lifetime.
You are right about believing myths though…… remember the economist Gary and the Duke of Westminster…..? 😉
@cantersaddick I agree with a lot there, but …… an awful lot of people are blaming the rich, especially the noisy one's with YouTube channels!! and that reverberates around the room, including this one.
I'm still to be convinced that trying to take money from one section, to this scale needed, will actually solve anything (or that it would even touch the sides), it may actually worsen the situation longer term. Even if we could and it does solve it, it'll be a temporary solution and yet another sticky plaster, unless the underlying issues are resolved we'll be here again in less than 10 years time. We have to deal with the proximate cause and to do so is multi faceted and sadly I fear beyond the ability of any government in the past and probably near future.
im not the expert as you can tell, but I still believe the solution is growth, without that we’re not getting out of the sticky stuff.
i don’t think there are any short term fixes, it there certainly needs to be some long ones, at best I’ve probably got 35 years left, I doubt I’ll see it in my lifetime.
You are right about believing myths though…… remember the economist Gary and the Duke of Westminster…..? 😉
Again I think you're maybe taking a few bits personally and projecting. Saying there is a problem with wealth inequality isn't blaming them.
Again great to talk about growth but thats not gonna happen until we solve the societal problems.
As for your last point. I never agreed with that point. I said his overall narrative of how wee are where we are is bang on. Also this coming from the guy who believes the wealth will magically trickle down, even after the last 50 years! I choose to reply to that in meme form.
@cantersaddick I agree with a lot there, but …… an awful lot of people are blaming the rich, especially the noisy one's with YouTube channels!! and that reverberates around the room, including this one.
I'm still to be convinced that trying to take money from one section, to this scale needed, will actually solve anything (or that it would even touch the sides), it may actually worsen the situation longer term. Even if we could and it does solve it, it'll be a temporary solution and yet another sticky plaster, unless the underlying issues are resolved we'll be here again in less than 10 years time. We have to deal with the proximate cause and to do so is multi faceted and sadly I fear beyond the ability of any government in the past and probably near future.
im not the expert as you can tell, but I still believe the solution is growth, without that we’re not getting out of the sticky stuff.
i don’t think there are any short term fixes, it there certainly needs to be some long ones, at best I’ve probably got 35 years left, I doubt I’ll see it in my lifetime.
You are right about believing myths though…… remember the economist Gary and the Duke of Westminster…..? 😉
Again I think you're maybe taking a few bits personally and projecting. Saying there is a problem with wealth inequality isn't blaming them.
Again great to talk about growth but thats not gonna happen until we solve the societal problems.
As for your last point. I never agreed with that point. I said his overall narrative of how wee are where we are is bang on. Also this coming from the guy who believes the wealth will magically trickle down, even after the last 50 years! I choose to reply to that in meme form.
Ah yer, no one on here or anywhere has ever blamed the rich :-) or do I need to quote those posts and link more videos? You couldn't have agreed with that point as you denied he'd ever said it, it was a myth wasn't it (which was my point, not that you agreed).
Time will tell which way this will all land. As for your horse and sparrow theory I don't recall ever stating I agreed with that. Although some may argue 62% of taxes paid by the top 10% is a bit bigger than a trickle.
Trickle down has not really been seen to any degree since Thatcher, aside from about a week of Truss but I can see little signs already from Reeves.
I think you know when someone's run out of steam when the meme's start coming out......
Back on topic - if we removed cash completely - would that help raise more taxes? And how many barber shops would remain open :-)
@cantersaddick I agree with a lot there, but …… an awful lot of people are blaming the rich, especially the noisy one's with YouTube channels!! and that reverberates around the room, including this one.
I'm still to be convinced that trying to take money from one section, to this scale needed, will actually solve anything (or that it would even touch the sides), it may actually worsen the situation longer term. Even if we could and it does solve it, it'll be a temporary solution and yet another sticky plaster, unless the underlying issues are resolved we'll be here again in less than 10 years time. We have to deal with the proximate cause and to do so is multi faceted and sadly I fear beyond the ability of any government in the past and probably near future.
im not the expert as you can tell, but I still believe the solution is growth, without that we’re not getting out of the sticky stuff.
i don’t think there are any short term fixes, it there certainly needs to be some long ones, at best I’ve probably got 35 years left, I doubt I’ll see it in my lifetime.
You are right about believing myths though…… remember the economist Gary and the Duke of Westminster…..? 😉
Again I think you're maybe taking a few bits personally and projecting. Saying there is a problem with wealth inequality isn't blaming them.
Again great to talk about growth but thats not gonna happen until we solve the societal problems.
As for your last point. I never agreed with that point. I said his overall narrative of how wee are where we are is bang on. Also this coming from the guy who believes the wealth will magically trickle down, even after the last 50 years! I choose to reply to that in meme form.
Ah yer, no one on here or anywhere has ever blamed the rich :-) or do I need to quote those posts and link more videos? You couldn't have agreed with that point as you denied he'd ever said it, it was a myth wasn't it (which was my point, not that you agreed).
Time will tell which way this will all land. As for your horse and sparrow theory I don't recall ever stating I agreed with that. Although some may argue 62% of taxes paid by the top 10% is a bit bigger than a trickle.
Trickle down has not really been seen to any degree since Thatcher, aside from about a week of Truss but I can see little signs already from Reeves.
I think you know when someone's run out of steam when the meme's start coming out......
Back on topic - if we removed cash completely - would that help raise more taxes? And how many barber shops would remain open :-)
Again sounds like projection. Saying there is a problem with the ultra rich and what they are able to get away with doing, and that something needs to be done to address it is not blaming them.
In the videos I'd seen of him talking about the DoW all I'd seen is him talking about IHT only. You shared one where he does say more (though not quite what you were claiming he said either) and I accepted that. Still doesn't mean he is blaming the rich more just pointing out the difference in the way the system treats people with masses of wealth and the opportunities open to them.
Cn you provide a source for the stat in bold? Looks to me on a quick Google to be referring to income tax which of course is a massive red herring and the top 10% of income tax payers are a completely different cohort of people to the ones we are talking about.
Every argument you have given stems from trickle down, you've talked about wealth creators and job creators. Trickle down has formed the basis of economic thinking across the west for 70 years. Yes some governments and budgets have been harder lined on it than others. But we've had 50 years of privatisation, deregulation and tax breaks for big business. Yes some like Truss wanted to double down on it but it's been the basis of every government for the entire period. Yes even this government, its why they've quietly u-turned on their manifesto pledge to close the tax break for large private equity. Its everywhere and its failed economics. The UK and US are the ones who still take this so religiously. Other countries have relaxed on it. Its why I get so frustrated that our political and economic media coverage is so UK US focused.
As for the memes. It was a light hearted way to reply to your dig at me!
@cantersaddick I agree with a lot there, but …… an awful lot of people are blaming the rich, especially the noisy one's with YouTube channels!! and that reverberates around the room, including this one.
I'm still to be convinced that trying to take money from one section, to this scale needed, will actually solve anything (or that it would even touch the sides), it may actually worsen the situation longer term. Even if we could and it does solve it, it'll be a temporary solution and yet another sticky plaster, unless the underlying issues are resolved we'll be here again in less than 10 years time. We have to deal with the proximate cause and to do so is multi faceted and sadly I fear beyond the ability of any government in the past and probably near future.
im not the expert as you can tell, but I still believe the solution is growth, without that we’re not getting out of the sticky stuff.
i don’t think there are any short term fixes, it there certainly needs to be some long ones, at best I’ve probably got 35 years left, I doubt I’ll see it in my lifetime.
You are right about believing myths though…… remember the economist Gary and the Duke of Westminster…..? 😉
Again I think you're maybe taking a few bits personally and projecting. Saying there is a problem with wealth inequality isn't blaming them.
Again great to talk about growth but thats not gonna happen until we solve the societal problems.
As for your last point. I never agreed with that point. I said his overall narrative of how wee are where we are is bang on. Also this coming from the guy who believes the wealth will magically trickle down, even after the last 50 years! I choose to reply to that in meme form.
Ah yer, no one on here or anywhere has ever blamed the rich :-) or do I need to quote those posts and link more videos? You couldn't have agreed with that point as you denied he'd ever said it, it was a myth wasn't it (which was my point, not that you agreed).
Time will tell which way this will all land. As for your horse and sparrow theory I don't recall ever stating I agreed with that. Although some may argue 62% of taxes paid by the top 10% is a bit bigger than a trickle.
Trickle down has not really been seen to any degree since Thatcher, aside from about a week of Truss but I can see little signs already from Reeves.
I think you know when someone's run out of steam when the meme's start coming out......
Back on topic - if we removed cash completely - would that help raise more taxes? And how many barber shops would remain open :-)
Again sounds like projection. Saying there is a problem with the ultra rich and what they are able to get away with doing, and that something needs to be done to address it is not blaming them.
In the videos I'd seen of him talking about the DoW all I'd seen is him talking about IHT only. You shared one where he does say more (though not quite what you were claiming he said either) and I accepted that. Still doesn't mean he is blaming the rich more just pointing out the difference in the way the system treats people with masses of wealth and the opportunities open to them.
Cn you provide a source for the stat in bold? Looks to me on a quick Google to be referring to income tax which of course is a massive red herring and the top 10% of income tax payers are a completely different cohort of people to the ones we are talking about.
Every argument you have given stems from trickle down, you've talked about wealth creators and job creators. Trickle down has formed the basis of economic thinking across the west for 70 years. Yes some governments and budgets have been harder lined on it than others. But we've had 50 years of privatisation, deregulation and tax breaks for big business. Yes some like Truss wanted to double down on it but it's been the basis of every government for the entire period. Yes even this government, its why they've quietly u-turned on their manifesto pledge to close the tax break for large private equity. Its everywhere and its failed economics. The UK and US are the ones who still take this so religiously. Other countries have relaxed on it. Its why I get so frustrated that our political and economic media coverage is so UK US focused.
As for the memes. It was a light hearted way to reply to your dig at me!
Re bold, yes I meant income tax, although if you went all taxes then it would be higher I suspect. You do know the top 10% will include the very very richest in this country, or are you back in the Gary school that they don't pay income tax? You could take the top 1% and 30% in income tax.
I've not given one argument for trickle down economics, unless you are saying having or encouraging people to start successful businesses is trickle down.
The UK and the US government's are propped up by very wealthy businesses and individuals. Those turkeys will always be safe from Christmas all the while they keep donating
For me I don't like the idea of overly penalising people for being successful. I also hear a lot of empathy for Gary. The wage suppression in this country is atrocious and the hoovering up of private assets is counter productive. The way national assets like utilities were privatised isnt so awful but what is unforgiveable is how they have been allowed to run. Zero accountability, tax money propping rail franchises that own fuck all assets up, the entire water industry particularly. Less so with power, telecoms and gas but for some reason water companies have been allowed to ignore targets for asset management and maintenance, pay shareholders huge dividends and we are all a part of that. Any large pension fund will have stakes in privatised national utility assets, its a no brainer, you get a dividend regardless of poor performance, dip your bread. That sort of corruption should carry jail sentences for the ministers who were meant to be holding these dickheads to account and the board members. Same for the train franchises.
The thing to remember as well. It was only 5 years ago people in my industry were all of a sudden being appreciated, delivery drivers were heroes, doctors and nurses rightly so and the care workers who do such a noble job but are so disrespectfully financially rewarded. I said at the time when all that was over we woukd be forgotten about and left underpaid and we have been.
I couldn't care less for whataboutism and that prick starmer with his squaky voice "14 years" yeah the conservatives were shit, they also inherited a mess and thankfully eventually shup up about it. They also paid people a fuck ton of money to sit at home for months on end when they weren't stealing from us fraudulently procuring protective equipment.
The Gary's economics big push is to try and level up things for the crucial but underpaid and appreciated workers who 2 generations ago could afford to run a modest home and have a holiday from driving a bus, being a postman, owning a shop. Not everyone can be an entrepreneur nor would that work, entrepreneurs still need people to drive trains, buses, deliver shit anyway. Difference is those people now often claim benefits whilst in full-time employment which is mental. And means they are not being paid enough.
Anyway the younger generation will eventually catch up. If I was 18 years old now I'd hope I was 2 years into a plumbing, bricklaying or electricians apprenticeship eying up which Aston Martin I want. Construction and trades are industries where AI isnt going to disrupt
Comments
More than happy to chew anyone's ear off about this stuff in the pub. Those who know me might say avoid!!
the vast majority of the examples I gave have made the majority of their money through earnings, via PAYE.
let me example the one of the three on my floor who reports to me.
he controls in the region of £40m of income (per annum). By control I mean if he moved to a rival company, most of that £40m would move with him.
because of that (I’m not giving exact figures!) he earns a 7 figure salary and the same again in bonus. In addition he has LTI’s by way of shares that vest after 5 years, they are multiples of his annual salary. It would not be stupid to think, that dependent on share price his gross reward in a 5 year period is double figure millions, net basis even after tax is going to be double figure.
so firstly you are completely wrong that most of his wealth has come from investment income. Secondly he is not paying less than anyone else on PAYE.
thats your first issue, the problem with Math, statistics and modelling is they are rarely correct in the real world.
as for Gary’s economics, whilst I agree with bits of what he says, like most in the public eye he stretches the truth and often gets found out ‘the Duke of Westminster pays no tax’ 😂🙈
why is the country skint? But the only way out if it in the main is through growth, that and collecting what is due!
You hadn't mentioned a bonus before, that does make the maths works slightly more than before.
You can say you don't like it but there is plenty of evidence in other countries that a wealth tax does work. If only we could get out of the UK US centric bubble we have here in the UK and we could look at what is actually working around the world. There is a groundswell towards this. France and Spain have voted in favour by large majorities in the last year. Its huge. Plenty of south American countries are seriously considering it. It would be nice to be able to have a grown up evidence based conversation about it in the UK rather than people just screaming "we hate success" "Politics of envy" and "they'll all leave" when the evidence is the opposite.
Glad we are now agreeing it's a problem. What is your solution to it if this won't work?
Gary has never actually said that. What he says is the Duke of Westminster paid zero inheritance tax on the 10billion he inherited. Which is true. That the vehicle for avoiding IHT had paid some tax every 10 years before hand and will continue to do so is relevant but doesn't undermine that point.
As I said to Bob. Conversations been great, starting to get a bit tetchy tho so I'm gonna leave it there. What I said to Bob was a nice finish so I'll repost it.
https://geyser.fund/project/btcisla
See video of Gary stating the Duke doesn't pay income tax (or more precisely him saying more than once 'so you think the DoW pays income tax') this is the shortened version, there are also other times of him on video saying the same thing on other interviews/podcasts etc, he also seems to confuse IHT with his 60% tax rate on income, he clearly doesn't understand how a trust works which surprises me. He suggests the rate for a wealth tax will start at 2% above £10m.
I understand only around 5 countries have a Wealth tax now (in the OECD), more importantly 30 years ago 12 countries did - so far more have removed it than added it (1 has brought it in, 8 dropped it) - is that an indicator of how well it works (or maybe doesn't)?
The problems this country faces, financially, are multi faceted and have occurred over many many decades and cannot be undone in one move or even one decade, so much needs changing I could write a list of 101 things, sadly recent governments are incapable. But a few (almost none of which help me I might add!):
1. Scrap our tax system and start again, it's had too many elastoplasts put on it needs a complete reset. Scrap NI for instance and just have one income tax that everyone pays on income, align rates for things like CGT, dividend tax etc. Scrap employers NI to be picked up on Corp tax etc. Investment also needs to be made in making sure we collect what we should, whether that's from the window cleaner or the multi billionaire.
2. Over time remove almost all benefits (some will need to stay) and replace with a universal income for all adults (in conjunction with 1 which of course will mean higher rates), scrap the tax free allowance (as that in effect will be replaced with the universal income for all, as well as the state pension being replaced by the UI). I'd also add at least one, but possible two more tax bands, at say £250k and £400k. Scrap things like winter fuel allowance, we don't need all these separate payments and admin costs, just make them part of the UI.
3. will of course mean a lot of jobs lots in the Gov sector managing benefits, those jobs/costs should be moved to
education (not necessarily 'academic' in the usual sense of the word). A more educated country (In the right areas) will aide growth.
4. Make the UK attractive to investment, make it attractive to start your own business, together with education will see the next generation of entrepreneurs and the country grow.
5. We need far more people in work, over 9m people aged 18-64 are not in paid work, that's a fifth of the country in that age bracket, whilst clearly some may be in education, others may be too ill to work, there is still a huge number inactive that we need out there, but of course we also need to create jobs (see above).
6. Invest in infrastructure and housing, for 40 years we haven't built enough property (homes) and there really is no excuse. Government could easily build homes and sell for profit (keeping some for rental). Remember Property is where a huge amount of wealth is held.
Just a few basic things, there are 100's more as the above will not alone solve this countries problems, some maybe pipe dreams, but I've had a go!
EDIT: if you watch the full Gary and Daniel 2 hour video, Daniel explains in some detail why in the US they blame the government and how in the UK we blame the rich.
2 concerns though. Surely to pay for UBI your redesigned tax system will need to have an element of the ultra rich paying much much more thannthey currently do. Akin to a wealth tax?
And on point 5 I worry what can be done. Health is my day job and we have 7.5 million people on NHS waiting lists. If half of those are unable to work while waiting once they wait 6 months they have a 50% chance of returning to work ever, at a year its barely 10%. Long term, get rid of waiting lists, quick treatment quick return to work. But the current cohort there is little we can do for them. Targeted help may get small numbers back to work but there are a large number who will never work again. The other cohort of people who are out of work are the over 50s mortgage free who stopped working during or soon after Covid as they realised they didn't need to. I'm simply not sure we will persuade them returning to work is something they should do. And UBI won't help that.
Just posting it again because everything else on the page is not about a cashless society.
For UBI & redesigned tax system, for the majority it would be a net zero game. i.e. myself at my level of income I wouldn't expect to be earning more overall, it would just be the income comes from a different source.
I would receive (as an example) £15k from Government that I don't currently get, but the tax rates would adjust so that after tax I receive roughly £15k less in my net salary. Again as an example the 20% band now starts at my first earnings (UI is tax free and remembering no NI) but may actually be 25% rate, the 40% band may be 42.5% and so on.
The idea is at the very lower end people would be better off. Take my wife, earns circa £17k gross paying a little bit of tax and NI netting £15k, she may be 8-10k better off. To balance that would be 1. two new bands at higher levels (say 250k and 400k), 2. in addition bringing the other taxes like capital gains, dividend tax etc into line with the main bands.
We need to grow out of this. Imagine if we had 10,000 new companies start in 2025 that by 2030 1,000 were successful companies some trading worldwide, employing 10's of 1,000's of people in the UK and were hugely profitable. 1. More people in work equals more tax revenue. 2. new companies making new profits equals more tax revenue. Some of the remaining 9,000 can also contribute, some may be small employing less than 10 people but making a small profit, some may be a bit bigger, employing 10-100 people and just breaking even and so on.
There's a reason for instance the American stock market has increased 5-6x the UK, why US average wages in real terms are up something like 70% in the last 15 years and ours have reduced.
I want people to want to come here, to build businesses, I want those of us already here to do the same. Lets not stifle that, lets help and encourage it.
I agree with some of your points on the remainder, NHS waiting lists, we need better health education (again back to my earlier post about investing in non academic education) as well as better/quicker services. I think you'd agree less people needing health treatment in the first place would help as well as cutting waiting lists.
On inactive, I think you'd be surprised (but partly linked to the above)
Aged 25 - 49.
565,000 unemployed (i.e. looking and ready to work)
1,050,000 Sick
950,000 caring
220,000 students
350,000 other.
So of the roughly 3m in that age band, only about 15% are looking to work, whereas I would have expected well over 50%?
The 50-64
205,000 unemployed (i.e. looking and ready to work)
1,435,000 Sick
500,000 caring
0 students (to few for the chart!)
435,000 other
1,200,000 retired.
I expect the cohort to change dramatically in the coming decades, many in the 60-64 would have planned to retire at 60 (most final salary pensions back then were set to start at 60). So only around 20-25% are actually retired.
Something to ponder - we also need to shrink the state, we're at 45% of the economy comes from Government, that cannot continue. An example in one of Gary's videos (so don't shoot me if numbers aren't right). If those with more than £10m paid a 1% wealth tax above that level, that's roughly 20bn of revenue (assuming everyone paid it and no avoidance, leaving country etc). That's less than a weeks government expenditure....... that saves/gives each adult in the UK about £250 a head, it simply won't move the dial (and IMHO won't actually raise the full amount).
And for those old enough, remember the 50/60's and maybe into the early 70's - most 'working class' people never thought they'd be able to own their own home (sounds much like now right?) - but what changed for the baby boomers?.... thatcher sold them the countries/government one's - and sadly they didn't build anymore to replace them.
Why is the country skint? Well, it's not really an answer to my question, is it Rob? Unless you are suggesting the country isn't skint, and the reason they want to cut disability benefits, pay at-home carers a pittance and that there are not enough police, dentists, doctors etc (along with everything else) is for shits n giggles...
Collecting what is due would be a whole lot easier if the super rich didn't find every loophole going, and pay tax lawyers hugh sums to find those loopholes.
In this country we blame the rich for the country being skint (The US blame their government), people like Gary’s economics also throw those lines out like yourself and if you actually dig beneath the skin it’s simply incorrect (see my earlier video link about his understanding of the Duke of Westminster and taxes). Why do you assume that every super rich person supposedly find every loophole to not pay tax? What evidence do you have? Whilst I’m sure there are some (and should be dealt with), aren’t there at every level and that isn't the reason we are skint.
The reasons for the country being skint are not down to a single reason and have occurred over decades.
The country/economy has stagnated for years, the economy hasn’t grown (well not enough) and even with the growth we have seen that has diluted to almost nothing per head (population has grown by 6m+ the last 25 years) or actually gone negative. Added to that the state in that time has grown from around 30% to now 45% of the economy (partly to try and mask the issues). The state doesn’t make its own money it comes from the population, this has further diluted growth to a negative figure in real terms.
The issue with the state can be seen back to 1997 and the fundamental changes to how money was collected and distributed (think 'in work benefits' as a starter for 10) and how they attempted to prop up the country.
Sorry to be the bearer of bad news, but this country is sliding downwards and has been for decades, it isn’t due to the Rich not paying and nicking all our money, we’re falling behind and unless we wake up to that it is only going to get considerably worse. The world (of finance/economies) has changed, we need to change and adapt also.
We have structural issues, low pay, low productivity (driven by low pay), infrastructure from the 70s, poor public service provision, massive inequality. Its all well and good saying "we must get growth" but history shows you don't get growth until you solve those issues. In fact its solving those issues that gets you growth. We've had 50 years where the stated aim has been growth but as you say growth per head has been miniscule in that time (but the very richest are 8000% better off so where has that come from?). Doubling down on this approach will only double the failure. Since the 2008 crisis the countries that have not focused on growth but have focused on social metrics (some don't even report on growth as a metric internally) are the ones that have had consistent if not spectacular growth in that time. My view is if we focus on solving those structural issues and real societal change then growth will come. Until then we will simply stumble along trying to find ways to encourage investment (which will only further gut our middle classes) without addressing any of the actual problems.
You claim your colleagues have created work? How many people on average does each employ? If you are talking about the knock on effect of what they do, well I create work every time I buy a pint on that basis.
Evidence of tax avoidance? The mere existance of the tax lawyers is the evidence, and there is plenty in Private Eye on a regular basis about what goes on. It may not be thousands of people, but it isn't a handful either.
Yes very simplistic, but I’m referring to the state moving away from business funding salaries (enough to live on) to the state propping that up, in the main because we had a failing economy, of course what’s happened is the state can’t afford now to continue to do that (for numerous reasons).
Housing wasn’t sold to blackrock etc, they were sold to the working class but never replaced. They may have then sold them again, but that’s a whole different thing. Where would the state be now had they not of sold the houses and gold, or replaced them with new builds?
What ultimately has happened is the UK sold its appreciating assets (think property, or Gold etc). It’s why I’ve been saying for years to staff, buy appreciating assets. If I only ever sold my assets and spent it on living expenses I’d be an awful lot poorer long term.
you cannot blame in this instance the wealthy for understanding economics better than governments of the day. Nobody broke into the Bank of England and stole the gold at gun point, they bought it at the then market value (as I did).
Its like blaming the Coates family for being so wealthy, how dare they spot a future gap in the market and build a hugely successful business, employ lots of people and pay lots of tax. I suspect Mrs Coates wealth has grown way more than 8000% - why is that a bad thing, is that not a good thing and should be celebrated? She (like most wealthy people) haven't stolen their wealth and it's not her fault the people running the country for decades have been a shambles!
Partly answered above. The reason for wealth growth is very variable, for some (like above) is due to them creating wealth through successful business. Some will be down to making the right investments (usually business), they haven't stolen it which is the current in flavor rhetoric, they haven't robbed you or I of money you should have had (in the main) nor have they somehow accumulated wealth by not paying the taxes they should have (again in the main). But it's an easy conclusion to make that because of austerity it must be the case that you're worse off because they are better off, thats not true (in the main).
I am probably wealthier than some of my colleagues despite earning no more (and often earning less) - is that my fault, or is it I made different decisions with my money to them which has had long term better outcomes? I didn't not pay tax (in fact I probably paid more over time due to investments).........
If I take the guy who works for me that I mentioned, he came in about 8 years ago, due to the business he brought in there are probably 20 people directly employed to work on those account. Had he not of joined and brought in that business we wouldn't have employed those staff, but get your point about the pub, although I would say it's the landlord (or brewery) rather than customer in that instance.
Tax is a very complex subject (hence it needs simplifying), however it is very important to make clear the difference between avoidance and evasion. I avoid tax (as will most on here), in the past I have employed an FA to assist with that. Pension contributions is avoiding tax, investing in an ISA or even premium bonds is also along with other tax exempt products. That is all legal and above board. However anyone who evades tax should be hung drawn and quartered!
As we go up the chain, it is not unreasonable for a business (which is what most are) to receive tax advice and act accordingly. But I agree some will push that too far and try to bend the rules (and not pay tax they should) which should be dealt with. But that's sadly the way of the world that not everyone plays fair. We seem to turn a blind eye to the little man/woman taking cash for work and not declaring it (which is evasion) even though it is estimated that alone is around £8bn a year in the UK. I don't agree with either and it should be stamped out, but that doesn't mean everyone who has been successful and accumulated wealth has done so in an underhand way or to the detriment of others, it's certainyl not the norm.
It's why I strongly disagree with the likes of Gary's economics on a lot of things and what he spouts. He'll pick on one's like the Duke of Westminster because he doesn't pay IHT (all true and quite legally as the trust pays periodic tax) which builds the rhetoric that these rich sods aren't paying what they should. The truth if he actually took the time to understand how the tax system and trusts work he would realise that he's so far wrong it's ridiculous yet people simply take him at his word. i.e. aside from IHT and Periodic tax (brought in to stop an avoidance of IHT), he doesn't know/understand that ANY income taken from the trust pays either 45% income tax or if taken as a dividend 39.25%, you cannot avoid that! He seemed to think the Duke simply took income tax free and only paid 0.6% a year periodic tax, he's shouted it enough times it must be true!
Yes and that decision in 97 was to try and prop up the system and avoid the structural issues that had been built up since the 70s - namely privatisation, deregulation and increased power to large multinationals which had pushed pay down in real terms. As I said further up this thread if average pay had gone up with purchasing power since 1980 it would be 85K a year. We have a low pay problem. That government tried to hide it or get around it. The problem had already been set up.
No one is blaming the rich for that but they are saying something should be done to prevent that split getting too out of control. I am blaming the government for not reinvesting the money and for various decisions following that like buy to let mortgages etc. Its not even about blame. its about where we are now is clearly a problem. Something needs to be done about it. Whatever that is will have some impact on the ultra rich. You interpret that as blaming them. I see it as solving a structural problem.
The wealth of a certain cohort growing at 8000% whilst overall wealth has stagnated is a bad thing as it means their gains are only coming at the expense of others (not necessarily directly) and therefore are widening inequality.
A lot of your arguments rely on "traditional" economic arguments but I think there needs to be some recognition that the economic system and conditions we are living under don't match those of traditional capitalist thinking. Many of the major tenets of capitalism no longer hold - in most sectors we don't have real competition but large multinationals operating with oligopoly power and controlling whole sectors, the offshoring of profits isn't something in traditional economics models and is a drain on growth, the multiplier effect link is broken everywhere except for small local businesses, innovation has stagnated, the power of tech and the tech sector, the weakening of the middle classes etc. This system barely meets the criteria of capitalism so those traditional economic arguments don't hold. I think the term techno feudalism is the best description of the situation and will be what this period is called when looked back on as history in the future.
Whether or not you see these as problems - we do have to recognise these conditions exist and work within them. Levers that worked under other conditions will not work under these.
https://www.ft.com/content/7ec2c02f-d304-419d-ad12-f1fcfcce86a0
Also, I can't resist throwing in a grenade about examples of super-rich paying less than 4% tax. Here's one:
Roman Abramovic.
And if anyone wants to reply that he wasn't tax resident in the UK, I'd be interested to know where you believe he was tax resident, and why his activities with Chelsea shouldn't have made him subject to UK tax as an individual.
Unfortunately as a society we often choose to believe the myths. Either because its so ingrained in our psyche (thanks to a billionaire owned media looking out for their own interests) or because its in individuals own interests.
I'm still to be convinced that trying to take money from one section, to this scale needed, will actually solve anything (or that it would even touch the sides), it may actually worsen the situation longer term. Even if we could and it does solve it, it'll be a temporary solution and yet another sticky plaster, unless the underlying issues are resolved we'll be here again in less than 10 years time. We have to deal with the proximate cause and to do so is multi faceted and sadly I fear beyond the ability of any government in the past and probably near future.
im not the expert as you can tell, but I still believe the solution is growth, without that we’re not getting out of the sticky stuff.
i don’t think there are any short term fixes, it there certainly needs to be some long ones, at best I’ve probably got 35 years left, I doubt I’ll see it in my lifetime.
You are right about believing myths though…… remember the economist Gary and the Duke of Westminster…..? 😉
Again great to talk about growth but thats not gonna happen until we solve the societal problems.
As for your last point. I never agreed with that point. I said his overall narrative of how wee are where we are is bang on. Also this coming from the guy who believes the wealth will magically trickle down, even after the last 50 years! I choose to reply to that in meme form.
Time will tell which way this will all land. As for your horse and sparrow theory I don't recall ever stating I agreed with that. Although some may argue 62% of taxes paid by the top 10% is a bit bigger than a trickle.
Trickle down has not really been seen to any degree since Thatcher, aside from about a week of Truss but I can see little signs already from Reeves.
I think you know when someone's run out of steam when the meme's start coming out......
Back on topic - if we removed cash completely - would that help raise more taxes? And how many barber shops would remain open :-)
In the videos I'd seen of him talking about the DoW all I'd seen is him talking about IHT only. You shared one where he does say more (though not quite what you were claiming he said either) and I accepted that. Still doesn't mean he is blaming the rich more just pointing out the difference in the way the system treats people with masses of wealth and the opportunities open to them.
Cn you provide a source for the stat in bold? Looks to me on a quick Google to be referring to income tax which of course is a massive red herring and the top 10% of income tax payers are a completely different cohort of people to the ones we are talking about.
Every argument you have given stems from trickle down, you've talked about wealth creators and job creators. Trickle down has formed the basis of economic thinking across the west for 70 years. Yes some governments and budgets have been harder lined on it than others. But we've had 50 years of privatisation, deregulation and tax breaks for big business. Yes some like Truss wanted to double down on it but it's been the basis of every government for the entire period. Yes even this government, its why they've quietly u-turned on their manifesto pledge to close the tax break for large private equity. Its everywhere and its failed economics. The UK and US are the ones who still take this so religiously. Other countries have relaxed on it. Its why I get so frustrated that our political and economic media coverage is so UK US focused.
As for the memes. It was a light hearted way to reply to your dig at me!
I've not given one argument for trickle down economics, unless you are saying having or encouraging people to start successful businesses is trickle down.
For me I don't like the idea of overly penalising people for being successful. I also hear a lot of empathy for Gary. The wage suppression in this country is atrocious and the hoovering up of private assets is counter productive. The way national assets like utilities were privatised isnt so awful but what is unforgiveable is how they have been allowed to run. Zero accountability, tax money propping rail franchises that own fuck all assets up, the entire water industry particularly. Less so with power, telecoms and gas but for some reason water companies have been allowed to ignore targets for asset management and maintenance, pay shareholders huge dividends and we are all a part of that. Any large pension fund will have stakes in privatised national utility assets, its a no brainer, you get a dividend regardless of poor performance, dip your bread. That sort of corruption should carry jail sentences for the ministers who were meant to be holding these dickheads to account and the board members. Same for the train franchises.
The thing to remember as well. It was only 5 years ago people in my industry were all of a sudden being appreciated, delivery drivers were heroes, doctors and nurses rightly so and the care workers who do such a noble job but are so disrespectfully financially rewarded. I said at the time when all that was over we woukd be forgotten about and left underpaid and we have been.
I couldn't care less for whataboutism and that prick starmer with his squaky voice "14 years" yeah the conservatives were shit, they also inherited a mess and thankfully eventually shup up about it. They also paid people a fuck ton of money to sit at home for months on end when they weren't stealing from us fraudulently procuring protective equipment.
The Gary's economics big push is to try and level up things for the crucial but underpaid and appreciated workers who 2 generations ago could afford to run a modest home and have a holiday from driving a bus, being a postman, owning a shop. Not everyone can be an entrepreneur nor would that work, entrepreneurs still need people to drive trains, buses, deliver shit anyway. Difference is those people now often claim benefits whilst in full-time employment which is mental. And means they are not being paid enough.
Anyway the younger generation will eventually catch up. If I was 18 years old now I'd hope I was 2 years into a plumbing, bricklaying or electricians apprenticeship eying up which Aston Martin I want. Construction and trades are industries where AI isnt going to disrupt