Taxing the rich to pay for the poor

Dear God. So we bought a house for cash in an expensive area and its value has risen accordingly. Why should anyone else share in that increase? We paid a lot of money, and a lot of stamp duty, for our home. Why should anyone else, who has contributed bugger all towards the value, be entitled to a slice of the cake?

I like the idea of a tax on house sellers fitting a certain criteria Doodledog in particular ring fencing the money for social housing and wouldn’t get too hung up on leaving money to children, if the seller had any.
I think many people are slightly obsessed about leaving money to the next generation, sometimes to their own detriment when alive.

Cath9

What is your opinion of this idea from labour.

It stinks. Absolutely appalling. As a single mum,I scraped and saved, working as a nurse, to fund a deposit and buy a home for us. A 15.40% interest rates found me nearly having to sell, with neg equity. I hung on, just. Now retired,house no mortgage, modest equity as do not live in an expensive area, and paying tax on my pension, why the hell should we pay more tax on something we have earned to fund anyone. Another damn good reason not to vote Labour.

Germanshepherdsmum

I don’t mind anyone sitting on their backside if they are not taking taxpayers’ money. I very much mind people claiming benefits when they could work (or work in a different job or longer hours).

Actually that does surprise me. I thought your view would be that working age adults should work regardless of their income to help reduce immigration? I’m not being sarcastic, but with a falling birth rate I don’t see how the country can afford passengers, regardless of their income.

Casdon - this is where Farage surprised me by suggesting that the cap on family allowance should be lifted and people should be encouraged to have more children!

I’m sure he thinks women should only be in the kitchen and bedroom, not the boardroom Pantglas2 - tie them to the house with lots of children. That ship has sailed!

Doodledog

I agree that house values are on paper for the owner until the sale, maddie, so that is the point at which tax should be levied. House price rises in some areas causes huge inequality. People in cheaper areas struggle to move to more expensive ones, so stay where pay is lower and opportunities fewer. Obviously they also have less to leave the next generation too, so the geographical differentials get even more pronounced. Investment goes to areas where there is more money, which pushes prices up further, and the cycle continues.

Those whose houses have risen in value like foxie's X have the ability to move to cheaper areas and release significant sums by buying an identical house. Similarly, if they are unfortunate enough to need care it will take a lot longer to use up their capital, and they are far more likely to have money to leave to their children when the time comes than Y, who may well have spend an equivalent sum on her own house when she bought it, but been unable to leave the cheaper area, probably earned less as a result, and will have less (if anything) to leave behind.

Any government interested in levelling up needs to look at this one way or another. It wouldn't be right to cause people to be unable to afford to live in their own houses, so I'm not in favour of taxing people that way. Maybe owners of houses which have risen in price by an average of more than X% (or £X) per year from buying to selling, or by more than the national average rise, should pay a price inflation tax on sale? Or some other formula that brings back some of the unearned money in housing. I don't know what would be fairest, but whatever the formula the money should be ring-fenced to be spent on social housing.

Doodledog Any government interested in levelling up needs to look at this one way or another. It wouldn't be right to cause people to be unable to afford to live in their own houses, so I'm not in favour of taxing people that way. Maybe owners of houses which have risen in price by an average of more than X% (or £X) per year from buying to selling, or by more than the national average rise, should pay a price inflation tax on sale? Or some other formula that brings back some of the unearned money in housing. I don't know what would be fairest, but whatever the formula the money should be ring-fenced to be spent on social housing.

Perhaps Capital Gain Tax on selling, yes even primary home, after all costs incurred are factored in (purchase, stamp duty, renovations, additions, etc) with money ring-fenced for social housing.

I'd rather that than IHT at such a low level.

Pantglas2

Casdon - this is where Farage surprised me by suggesting that the cap on family allowance should be lifted and people should be encouraged to have more children!

Does he take advice from the Pope?

For those of you who think NI contributions pay for benefits or pensions it doesn’t and never has done. Everything goes into one pot. Nye Bevan is reported to have said “The secret of the (welfare) fund is there is no fund.” One could say we have been conned.

GSM we can't all be lawyers, bankers, doctors, etc. We have jobs that may not require a huge amount of training but they require skills that lots of people don't seem to have like empathy, kindness and the ability to make people feel safe and cared for when they are feeling frightened and vulnerable. I think those roles have value and the people who do them should have our respect and they should be paid properly so they don't need to claim universal credit in order to pay their bills.

Freya5

Cath9

What is your opinion of this idea from labour.

It stinks. Absolutely appalling. As a single mum,I scraped and saved, working as a nurse, to fund a deposit and buy a home for us. A 15.40% interest rates found me nearly having to sell, with neg equity. I hung on, just. Now retired,house no mortgage, modest equity as do not live in an expensive area, and paying tax on my pension, why the hell should we pay more tax on something we have earned to fund anyone. Another damn good reason not to vote Labour.

Hang on. The OP is asking very broadly about taxing the rich to pay for the poor. The LP is not suggesting anything being discussed on this thread, AFAIK. Feel free not to vote for me if you don't like my tentative ideas about levelling up, but they have nothing to do with the Labour Party .

Many people believe they are rich, when objectively they are nothing of the kind, and taxing 'the rich' wouldn't come close to affecting them. It's therefore very easy to scare people by implying that they would be impacted by policies aimed at making things fairer across the board.

Germanshepherdsmum

Yes.

Sorry but that is outrageous.

Most of us will probably need an health care worker at some point in our lives. Most of us do not need highly paid lawyers or solicitors apart from conveyancing or wills or if we get into trouble.

As you are no doubt aware many lawyers earn low salaries between £28k and £60k. Would you class their work as being dead end?

GrannyRose15

For those of you who think NI contributions pay for benefits or pensions it doesn’t and never has done. Everything goes into one pot. Nye Bevan is reported to have said “The secret of the (welfare) fund is there is no fund.” One could say we have been conned.

No, I don't think that's true. Most people are fully aware that there is no 'pot'. The con is that we are always being told that there is no money for social justice. There is - it's just that pretending otherwise sounds better than saying governments don't care about the welfare of their voters.

foxie48

GSM we can't all be lawyers, bankers, doctors, etc. We have jobs that may not require a huge amount of training but they require skills that lots of people don't seem to have like empathy, kindness and the ability to make people feel safe and cared for when they are feeling frightened and vulnerable. I think those roles have value and the people who do them should have our respect and they should be paid properly so they don't need to claim universal credit in order to pay their bills.

foxie for PM!

There is a lot of talk, from some but not all on here about the unemployed and benefits so some figures taken from the 2nd quarter of this year.

The unemployment rate is 4.4% - approx 1.51 m

Approx 1.5 m are on unemployment benefit

There are 9.2m between the ages of 16 and 64 not actively looking for work. this will be students, people supported by their parents, those who took early retirement and who may or may not have taken up some sort of business activity.

6.4m are on Universal Credit, which in case you don't know, is paid to those with low earnings or who are out of work, to help with living costs.

Finally, there are a variety of sickness benefits but people have to jump through hoops to get these. I refer you to the film "I Daniel Blake"

The stats I quoted are ONS calculations.
From other sources there are 55 billionaires in the UK the remainder of the 1% highest wealth is made up of around 540,000 adults in the UK with a Median wealth of £3.6m.
(Pop 67m - 13m children x 1%).

The ONS on one hand refers to 1% of population and in the other ONS stats refer to households which is confusing. We have to remember that wealth is assets less liabilities and I know plenty with lavish lifestyles you assume are wealthy, that are borrowed to the hilt.

It’s not hard to imagine a nice house, a holiday cottage, a couple of cars, all paid for plus a good pension pot, it could easily come to £2m, and within the 1% wealthiest

Dinahmo, lawyers who earn between £28k and £60k, as you suggest, are not up to much. I chose to work in a provincial firm many years ago when my son was young, but even then earned far more than that. A qualified lawyer earning that sort of salary is pretty mediocre.

David49

The stats I quoted are ONS calculations.
From other sources there are 55 billionaires in the UK the remainder of the 1% highest wealth is made up of around 540,000 adults in the UK with a Median wealth of £3.6m.
(Pop 67m - 13m children x 1%).

The ONS on one hand refers to 1% of population and in the other ONS stats refer to households which is confusing. We have to remember that wealth is assets less liabilities and I know plenty with lavish lifestyles you assume are wealthy, that are borrowed to the hilt.

It’s not hard to imagine a nice house, a holiday cottage, a couple of cars, all paid for plus a good pension pot, it could easily come to £2m, and within the 1% wealthiest

I thought you said people with £3m were amongst the top 1%, not £2m? I would expect a nice house, holiday cottage, a couple of cars and a good pension pot to be worth more than £2m, unless the properties are in cheaper areas.

annsixty

I wonder if the new Duke and Duchess of Westminster will ever get round to spending their tens of billions?
No envy by the way, they are just a lucky and lovely young couple starting out on a life together but this is inherited wealth, not earned in any way.
I have no idea how much the estate paid in inheritance tax on the death of his father.

I've been thinking about billionaires. Given many rich people are generously charitable, I wonder if there could be incentive to give more. I know they, too, must cover outgoings -- what are outgoings on "Half of Mayfair"?

The Duke of Westminster "ranked 15th on the Sunday Times Rich List 2024 with an estimated fortune of £10.127 billion." With so much property in legal trusts, I'd wonder if he could support even more worthy causes?

Regardless, beautiful bride, prettiest since Princess Margaret. Lovely flowers and generous gesture of ice cream for all visitors.

GSM you are very scathing, I find that rather sad.

Of whom? Lawyers who earn very little?

Feel free not to vote for me

I didn’t know you were standing for parliament Doodledog.
Which constituency?

But seriously, if any government decides to tax people on the increased value of their houses when they’re sold, it will simply push prices up further. Sellers will want to recoup the money that’s to be paid in extra taxation. And that won’t help anyone, least of all first time buyers.
In any case, house purchases are already taxed, it’s called stamp duty. You just pay it at the beginning rather than the end.

Germanshepherdsmum

*Dinahmo*, lawyers who earn between £28k and £60k, as you suggest, are not up to much. I chose to work in a provincial firm many years ago when my son was young, but even then earned far more than that. A qualified lawyer earning that sort of salary is pretty mediocre.

My son’s a barrister. I know what he thinks, and it’s that there are indeed some pretty mediocre lawyers. He has in the past, much to his annoyance, received a large bundle from the appointing solicitors, on the Friday before court/action on the Monday, giving him only the weekend to read huge amounts of information. He hasn’t complained about it recently, so now he’s doing bigger cases it maybe doesn’t happen like it used to.

maddyone

But seriously, if any government decides to tax people on the increased value of their houses when they’re sold, it will simply push prices up further. Sellers will want to recoup the money that’s to be paid in extra taxation. And that won’t help anyone, least of all first time buyers.
In any case, house purchases are already taxed, it’s called stamp duty. You just pay it at the beginning rather than the end.

I see what you’re saying about prices going up to cover the tax, although the tax would rise too, and house prices do have natural limits. Stamp duty would still be payable on purchase, I’m afraid. I’m not a fan of stamp duty, but it’s a separate issue really. This would be a tax on profit, which, as you point out, is not real money, but notional. FTBs would benefit as they don’t pay stamp duty under a certain amount (not sure what) and that amount could be raised, plus they wouldn’t be subject to the new tax unless they accrued unearned profits enough to qualify them for payment.

I’m standing for the ‘Make It Up As You Go Along’ party in the Inmyhead constituency. We don’t claim to be politicians, but look for ways to make life fairer for everyone, and write them on the back of fag packets . Our USP is that we promise to change our minds if someone persuades us we are wrong. Have you got a better idea to level out the discrepancies between areas? Or don’t you think it matters?

GSM nobody would be taking a slice of your cake. The tax would be only on the difference between what you paid for the house and what you sold it for. Notional money. It would be adjusted for inflation, refurbishment etc.