Assuming your an accountant?
How many of your clients buy thay line.
Mine would laugh me out of the building
Wealth Tax in the UK
- Thread starter Dumbstar
- Start date
How many of your clients buy thay line.
Mine would laugh me out of the building
CE is bleeding into the General. Mods please move this.
@Walrus makes a good point later about working hard, sacrificing and saving hard. Only to be hit hard again. It's great I can take liquidity by loans on my assets but why am I to be penalised through interest rates for doing that? I don't want to do that and blow out on flashy cars, booze and expensive holidays.
I associate being wealthy with having luxuries. I have none, other than a TV screen and sky sports to watch my favourite sport. I have worked from the first day of leaving uni up to now taking any job available so I was always in a position to pay my taxes, as my dad taught me. I don't drink and don't smoke so save money there, I don't take my family on annual skiing/summer holidays other than the odd trip to Pakistan to see relatives. Like all middle class people that keep this country going I hate my job and my profession, always have. I'm not rich enough to leave either.
As I get old(er) my scepticism becomes stronger. The voice in my head that says 'quit and drive a cab on the side while claiming all the benefits, you don't need this shit' grows.
What’s the purpose of taxes then?
The working hard point is relevant for a wealth tax generally, not for why your house isn't wealth. You could have worked just as hard and placed your wealth in other assets than your mortgage free house, it wouldn't have made you richer.
As for working hard and saving, I interpret this in two ways:
1. You could have worked just as hard, but spent your money instead of saving it.
2. You could have chosen leisure over work.
As for 1), you will be taxed a lot less than someone who spent their money, so that point is rather moot, don't you think? Even if we accept that a tax is a punishment or penalty, clearly the people getting punished are the ones spending their money. Going with the assumption that you're £200 000 above the threshold, you're potentially paying 1 % of that for five years, or £10 000 total. Your alternative would have been to spend the amount above the threshold. The UK has a standard VAT of 20 %, so you would only be able to spend on stuff worth £166 667 worth of stuff and you'd have to pay £33 333 in taxes.
If you were to be punished for saving over spending the wealth tax would have to be higher than 16.7 %.
As for leisure over work, that argument is identical for income taxes. If you work two jobs to save money, is it fair that you have to pay more taxes than someone who works one job? Is it fair that a lawyer has to pay more in taxes than a cleaner? Most people are fine with progressive income taxes.
Clearly I believe that we should want to sort this out during this generation and not pass this on to the next? Getting it done within 5 years sounds like some pain for a short period rather than denying services not just to the poor and vulnerable but also all of society that follows. Maybe it depends on what we see as wealth however if we've got it in the bank or stored in assets then surely it is the fairest way rather than passing on the problem.
However I think we should all be more interested in how our government in the UK spends our taxes and take punitive action upon particular ministers who recently and at this point have been shown to have been passing out lucrative contracts without putting them out to tender and what is more important receiving nothing back for the money.
The wealthiest in society should be hit hardest but if you consider that you are middle class and have assets of at least £500,000 then that is most likely because you have paid off your mortgages admittedly possibly through hard work or have perhaps chosen to save instead of spend more often and a 1% Tax amounting to up to £1,000 a year really isn't going to be that huge a hardship in all honesty, it's in the bank, behind your belt so to speak, in bricks and mortar, in whatever way it's our duty to clear this black hole.
However I think we should all be more interested in how our government in the UK spends our taxes and take punitive action upon particular ministers who recently and at this point have been shown to have been passing out lucrative contracts without putting them out to tender and what is more important receiving nothing back for the money.
The wealthiest in society should be hit hardest but if you consider that you are middle class and have assets of at least £500,000 then that is most likely because you have paid off your mortgages admittedly possibly through hard work or have perhaps chosen to save instead of spend more often and a 1% Tax amounting to up to £1,000 a year really isn't going to be that huge a hardship in all honesty, it's in the bank, behind your belt so to speak, in bricks and mortar, in whatever way it's our duty to clear this black hole.
Don't you guys have property
(Well, the dynamic would likely be a little different. Over here, I fill out everything myself in my tax form and pay tax accordingly - in the knowledge that the tax service may audit me and fine me if I made errors. But same difference: the existence of the database means that they can ask people to provide that information and that it wouldn't be too hard on them to find it.)
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I'm happy to pay taxes. How else are infrastructure, health systems, welfare programs, and so on paid for?
I guess it depends on where taxes go to. A government that puts all the money in its own pockets or spends it all on tanks probably doesn't have a good tax morale for good reason...
I'd put money on it there's at least one Adam Smith on this forum.
That's not what I asked.
When it comes to handing over a tax cheque people are a nightmare and see it as nothing but robbery in my experience.
500k is far too low especially if its including property, especially after plenty of people probably bought properties due to the stamp duty holiday (raised their affordability). Or does this only include property that is mortgage free?
I agree it should be done during our generation, but the threshold is low in my opinion. There are people with wealth running into the multiple millions for 1, and there are companies that have made a killing during covid. The later part is really where they should be looking
Surely they'd use council tax bands which are done on property values already? Band H would capture all relevant properties.
That's the only conclusion I can come to where it'll be a very quick and efficient way of calculating a property as part of a wealth tax.
The financial times had an opinion piece today about reintroducing the Excess Profit Duty from WW1.
I can think of worse ideas. It seems difficult to do so retrospectively but many firms have had stellar years because of the pandemic which just isn't cricket.
The last couple of pages really highlight that for some reason people don't even consider VAT but for some reason a tax on savings is sacrilegious. Money not spent is money out of the economy, money that isn't supporting jobs. At a time like this getting people to spend rather than hoard would be a good policy as long as its tailored correctly.
That's without going into the fact that VAT is regressive and at a time like this it's a perfect time to rebalance/reclaim to make it fairer.
Businesses were to pay tax on a rise in profits more than £200 (£14,189 in 2020) above the average they achieved in two of three years between 1911-13. Alternatively, they could pay tax on profits that were more than £200 above a 6 per cent return on capital employed as of August 1914. These ‘excess profits’ were to be taxed at 50 per cent. The level fluctuated over the course of the war and it was designed to expire in 1922.
I can think of worse ideas. It seems difficult to do so retrospectively but many firms have had stellar years because of the pandemic which just isn't cricket.
The last couple of pages really highlight that for some reason people don't even consider VAT but for some reason a tax on savings is sacrilegious. Money not spent is money out of the economy, money that isn't supporting jobs. At a time like this getting people to spend rather than hoard would be a good policy as long as its tailored correctly.
That's without going into the fact that VAT is regressive and at a time like this it's a perfect time to rebalance/reclaim to make it fairer.
@NotThatSoph and @oates I think we all agree that we need to pay taxes as someone needs to fill this black hole, and where these taxes actually go is more important.
As Cassidy mentioned is 500k of locked in assets too low? Or, as Soph suggests, I put myself into 200k mega debt on my house to go on a 30 day instant spending spree like Brewster?
I would propose a wealth tax on anyone with wealth. So lower the threshold to £200k. Why stick it at 500k? I know it hits me even harder but the government gets more tax and the country is better off for it.
With the interest rate on savings at nearly 0% it would make no sense to tax it further.
I generally feel that dealing with extreme wealth inequality is the final hurdle, and I don't think we'll ever be able to fix it. Even in highly successful welfare states the really wealthy remain that way. I'm not sure if targeting people with 500k homes is the right way to go, though. But secondary properties should definitely be taxed to death.
I dream of a meritocracy where even the most unfortunate have a high standard of living(guaranteed decent living conditions, nutritious food, free health and dental care, free higher education, minimum 5 weeks paid vacation per year and enough disposable income to occasionally travel).
I dream of a meritocracy where even the most unfortunate have a high standard of living(guaranteed decent living conditions, nutritious food, free health and dental care, free higher education, minimum 5 weeks paid vacation per year and enough disposable income to occasionally travel).
there’s very little incentive to save in that respect, which is one of the reasons people have looked at stocks and or property or other assets.
inflation is eroding the savings that anyone has in a bank account.
the vast amount of people acknowledge the need to raise finance to pay for Covid.
we might as well just raise the retirement age now to 70. It’s going to happen in the next 25 years, so might as well get it done now.
now is the time that governments can be innovative - previously only small incremental changes would be palatable to the electorate. You can view this as an opportunity.
clearly I don’t have answers, but hope we aren't just trawling through old ideas.
Why not tackle someone with £100m, rather than those with second homes? Many of which would have saved for many years, and bought so that they can use the money in retirement rather than invest in pensions?
The only really fair way to do it is to introduce some form of wealth tax as discussed. Probably over 500K actual worth (not borrowings or owed money) and to also just do a blanket increase on income tax. I know that's shitty but something drastic needs to happen. A blanket increase of say 2% to everybody on income tax would make a huge difference and I really don't think it would hit many people that hard.
Money parked in unproductive assets like cash/gold/bitcoin, sure. Money invested in stocks and bonds is funding the productive economy and growth.
There's a couple of options I see which need to be explored, a corporation tax increase is definitely the easiest option. There is the elephant in the room regarding furlough pay support, and at some point a discussion would be had regarding how that is recovered from those businesses that have used it.
Why the feck should an average person like me. Who bought a property in is early twenties, rented it out and continued to live at home to fund it. So they have a retirement fund 50 years down the line, be "Taxed to death" so other people that can't be arsed working hard get to go on holiday? Absolutely bonkers.
People with more than one property, usually aren't rich.
Absolutely spot on, but tories being tories it will come down to the individual to repay everything, cant have the big boys paying any more now can we.
there would be vast swathes of small business who will fold of the furlough money needs to be paid back.
furthermore, companies made financial decisions based on that money and enabled people to keep jobs. Without furlough, they would have made people redundant.
the money needs to be repaid, but it can’t be a direct relationship from those who took the support. It needs to be wider.
Around 1 in 10 people in the UK own more than one property, so I guess it depends on your definition of 'an average person'.
Clearly it's a policy decision to favour some investments over others and, in my opinion, there are good reasons a government may want to encourage people to invest in productive assets and discourage purchases of multiple residential properties. The UK government has clearly started to go down this route with the recent changes in legislation to make buy-to-let investments less attractive, as well as the generous ISA and pension allowances which allow stocks and bond investments to grow free of taxes.
I would be one of those people who would say, if you want a pension, you should invest in a pension.
I didn't mean that we should primarily target people with secondary homes(though wealthy people usually fall into that category as well). As you said, not everyone who owns secondary homes are wealthy. I do however think that owning secondary homes should be discouraged. Everyone needs a place to live, and getting into the housing market is hard enough as it is. Our system is very flawed when buying up secondary property is considered a smart investment.
The first and second paragraph I wrote are not really connected. My idea of a utopia is a meritocracy where the lowest standard of living still is very high. I don't know how we'll achieve that, but it should be possible. People used to say that having a 40 hour work week, weekends off and paid vacation was impossible.
They are based on the value of my flat on 1 April 1991!
Sounds like an April Fool's joke. Saying that, I hope they update it any time soon.https://www.lbhf.gov.uk/council-tax...and D - property value over,and up to £88,000.
Not quite the reasons you listed, but in the same vein...
https://www.bbc.co.uk/news/uk-politics-56015861
Tell that to those whose companies have pension black holes... Also some have second properties for their family e.g my mother is dependant on me
the biggest flaw in the housing market is the continued use of Help to Buy.
there are potentially 700,000 empty homes in the UK, but first time buyers are only supported to buy shiny new builds. Clearly refurbishing a property, and giving it a new lease of life is not for everyone - but some first time buyers should be incentivised to do so.
instead the big house builders have been propped up and effectively subsidised for a decade or more.
we’ve just refurbished a property that was empty for 5 years, which was inhabitable. It’s now rented via a local authority to a single mother with 5 children, one of which disabled.
obviously my endeavours are not altruistic, but if it wasn’t for me, that property would likely still be empty rather than a home for someone that needs it. Owning multiple homes can be of benefit to our society.
Some companies have clearly benefited hugely from Covid, but far more have suffered, which is reflected in the massive increases in unemployment in the UK and US. Any company that took furlough and profited should be made to repay it- some have, others haven't. But some businesses had staff putting themselves in danger to keep their businesses running during the pandemic and we all relied on them. To tax them punitively in retrospect is hardly fair either.
Income tax is paid at source, ie taken out of your salary at payroll, unless you're self-employed. Property is only loosely factored into council tax- which pays for local upkeep. I posted a link above- my council is still using property values from 1991, as an indication of where our databases are at!
Yeah if anything like that was done I'd like to see employee bonus payments as deductible. Tesco is a good example, profits up if memory serves around 30% half yearly and yes they gave bonuses out but a fair chunk also went to dividend payments.
If you're going to tax anyone the likes of Tesco gained those profits as a result of state policy. Is it workable to target taxes in this way? I'd very much doubt it but it's a good discussion point.
The 'contrast to spongers' argument is just tiresome. It has no place especially this year.
I'd personally tax people and corporations much wealthier than you but the tax burden will in reality fall much wider. The poor pay too much as a percentage of their disposable income via VAT already and it needs rebalancing so targeting asset wealth for that is fair.
It's also the fact that the property was in effect part-subsidised by his parents through 'living at home' and not paying market-rate housing costs. Nothing against it, but that's not what I class as hard work, more a lucky privilege.
You're right. I didn't mean that to come across as a sponger hating post. My point was more that I don't think what a lot of people class as "Wealthy" is actually wealthy. People should be allowed to better themselves without getting penalised for it.
The world is in a very difficult time and IMO a fairer way to claw back some of the money is via the genuinely rich (Millionaires) and through a blanket increase to tax across the rest. If you earn under around 100-150K you are not super wealthy.
If you earn 150k you most definitely are extremely wealthy.
No, not extremely