Redistribution of wealth in the UK

Suggestions, varian?

We already, surely, know that the rich are getting richer and the gap between rich and poor is widening.

What do people think is the solution to this?
Do people even think that it's a matter for concern?

Another Tory government can never be the solution.

Do you remember the ludicrous Liz Truss saying "we should stop focusing on redistribution and grow the pie" ?

I don't remember any interviewer or commentator challenge the direction of redistribution under the Tories.

The first thing I would do is unpack and redesign compulsorily the pay packages of the Directors of public companies so that their take home pay from all sources within the company (salary, share options, etc) can only rise by the same amount as those of their employees.

As far as bonuses are concerned, no director can receive a bonus unless all employees receive, % wise, the same amount.

More generally I am not so concerned about the rich getting richer. It is the poor getting poorer that bothers me and that is the difficult part to fix. Raise the Living wage rate too high and we could undermine our manufacturers and jobs because we could see a rise in cheaper imports. Put tarriffs or restrictions on imports and other countries will impose reciprocal measures.

I would like to see Benefits set at a fixed proportion of the minimum wage and it should then be tied to wage inflation. I would like to see pensions tied to wage inflation as well. The way to deal with pensioner poverty is through Pension Credit, not the basic rate, although it should first be defined as a proportion of annual wages.

Varian much as I like pie that wasn’t the answer was it?
A Labour government will have to come up with a few good policies next time around before things get worse for poorer people.
No zero hours contracts?

Off shore wealth.

Universal income?

Tax the really wealthy and rich heavily on anything over the earned income that most professional people have. Use the money accrueing from these taxes to improve houseing, schooling and the NHS.

Insist that all members of parliament are only paid the same as for instance a senior consultant, or a High Court judge.

The money saved can be used to overhaul the NHS, or provide better benefits for those unable to work.

I lived in Sweden many years ago.. in 1975. Even then, the gap between a road sweeper and a doctor was not nearly as big as it is here. It was a socialist country. In Sweden everyone respected that all jobs and therefore all people were essential to the good of the whole. The doctor was more than happy to pay higher taxes as he held these values. I never saw any poverty or a beggar and people had the dignity of knowing they were valued.

As far as I recall childcare was free and housing was mostly government owned and of a very high standard and there was almost free heating for the whole town, that came from a nearby factory that recycled rubbish and heated water that circulated through most the whole town. It was ecologically friendly way ahead of its time.

We are so far removed from these values, innovations and respect for others, sadly.

Maybe the PM taking away the non-dom tax loophole could be a step in the right direction.

That the PM can protect his own wife's wealth is immoral surely?

grandetante
Para 1: All but a very few would just leave the UK and go and live somewhere else. That is why in the 1960s, the Rolling Stones and many other entertainers, and wealthy people moved to countries like Switzerland in that period. The whole point of Mts Thatcher's tax cuts for the wealthy was to bring these high tax payers back to the UK to pay their taxes and spend their money, which of course would mean paying VAT on everything, car tax, Ni and so on.

Para 2: members of Parliament get paid considerable less than a judge at almost any level or a Hospital Consultant. I have friend who was a judge. Her judicial pension, alone is close to an MPs' salary. I think MP's would quite like to earn a top judge or consultants 's salary.

The changes you suggest could lead to a fall in the tax take. Should we cut the expenditure on NHS etc to meet the drop in income.

pinkquartz

Maybe the PM taking away the non-dom tax loophole could be a step in the right direction.

That the PM can protect his own wife's wealth is immoral surely?

I think you will find that Rishi Sunak’s wife has relinquished her non-dom status.

Any money earned should be taxed in the country it was earned in.

There is nothing wrong with companies/corporations making profits as long as a proportion of said profits are reinvested into the businesses and their workforces, along with All taxes due being paid.

Reinvesting in one’s workforce and infrastructure increases profitability.

Lile all of us Mr Sunak and his wife are taxed as seperate individuals. How Mrs Sunak is taxed is between her and the tax man and does not involve her husband.

She and her husband may, in discussion, agree that she will forgo her Non Dom status, but that is a personal matter and if Mt Sunak were to try and assert his authority I think it would be classed as financial abuse.

The very rich don’t worry about taxes, they avoid them. Offshore accounts etc. Companies go elsewhere for labour because it costs too much in countries like the UK and Australia and it would happen even more if wages are increased unfortunately. Not easy to deal with because if they didn’t use the cheap ‘slave’ labour then some of those involved would surely starve because many of those countries don’t have any form of social support. I agree that it might help if the CEOs were paid a lot less but then it may well not filter down to those who most need it at all.

M0nica

Lile all of us Mr Sunak and his wife are taxed as seperate individuals. How Mrs Sunak is taxed is between her and the tax man and does not involve her husband.

She and her husband may, in discussion, agree that she will forgo her Non Dom status, but that is a personal matter and if Mt Sunak were to try and assert his authority I think it would be classed as financial abuse.

Mrs S has already given up her non-dom status. As people keep pointing out.

Some ideas:

I think that redistribution through the taxation of income should be progressive and incremental; boil the rich frogs slowly.

OTOH, I think we should raise the tax free allowance considerably at the bottom end of the scale to allow more of poorer people's income to be spent into the economy. Most purchases are subject to taxation so they would still be contributing to the total tax take, just in a different way. People are too fixated on income tax as though it was the only tax people paid. Which, of course, it isn't.

Dividends and any other income which isn't subject to PAYE should be subject to the same allowances and tax rates as is the income of those on PAYE.

Regulations for company registrations should be made more stringent; registration should be more expensive, beneficial owners should be named and company accounts submitted in a timely fashion.

Income earned in the UK should be subject to UK taxation and non dom status should be abolished.

The first thing I would do is unpack and redesign compulsorily the pay packages of the Directors of public companies so that their take home pay from all sources within the company (salary, share options, etc) can only rise by the same amount as those of their employees.

I like that, MOnica

Thatcher's tax cuts were sneaky. This is why people should look at over all taxation, not income tax alone.

She cut income tax for everyone, not just the wealthy, but she whacked up other taxes, such as VAT. So the total tax take was really not diminished by a great deal. It was just sleight of hand stuff...

The tax threshold should be raised and National Insurance contributions lowered.
The wealthy can find many ways to avoid paying tax The big bonuses should be stopped. Those that say they can get better pay abroad? Where?

Maizie that is what any PM will do. If you cut taxes for any one group you need either to cut government spending or tax someone or something not already taxed to make up the revenue fall.

I don't mind people being very wealthy but it does irritate that if only they would give a bit more of it up by paying more tax, they wouldn't suffer and other people's poverty could be alleviated. We could also have better public services. The very wealthy may not always need the NHS or the library but they appreciate well maintained roads as much as poorer people.
I don't think we should assume that most of them would leave the country rather than contribute a bit more for the good of all. But I think it needs to be framed in a different way , taxation as a positive act not a negative.

M0nica

Maizie that is what any PM will do. If you cut taxes for any one group you need either to cut government spending or tax someone or something not already taxed to make up the revenue fall.

That's not true, but even if it were, what's the problem wit taxing those who could afford to contribute more?

No argument with that growstuff but not to a point where it leads wealthy people to move to another country. The very wealthy these days are far more mobile than they used to be and modern technology makes communication between people in different countries so simple.

In fact we are getting the development of 'digital nomads'. Young people travelling around the world as they fancy but earing a good living because they work remotely en.wikipedia.org/wiki/Digital_nomad

Portugal is deliberately going out to attract digital nomads www.euronews.com/travel/2022/10/10/digital-nomads-will-be-able-to-live-and-work-in-portugal-full-time-with-this-new-vis]]a

The UK’s failure to get serious about inequality and weak growth over the past 15 years has left the average British household £8,800 poorer than its equivalent in five comparable countries, research has found.

A “toxic combination” of poor productivity and a failure to narrow the divide between rich and poor had resulted in a widening prosperity gap with France, Germany, Australia, Canada and the Netherlands, the report from the Resolution Foundation said.

The thinktank said that if the UK matched the average income and inequality levels of those countries, typical household incomes in Britain would be a third higher and those of the poorest households two-fifths greater.

www.theguardian.com/business/2022/jul/13/average-uk-household-8800-a-year-worse-off-than-those-in-france-or-germany

Note that this article was first published in July, so does not take account of the damage inflicted on our economy by Truss and Kwarteng.

M0nica

Maizie that is what any PM will do. If you cut taxes for any one group you need either to cut government spending or tax someone or something not already taxed to make up the revenue fall.

Taxation doesn't fund spending, MOnica. Spending comes first. And government spending will increase the tax take by way of income tax on the salaries of public service workers and increased spending on the goods and services of the private enterprises which supply both the public sector and the workers within it.

You seem to be thinking of tax solely as income tax, just as I said people do. Cut income tax for lower income groups and they will still be paying increased taxes by way of their increased spending power.

We had a whole thread on Ann Pettifor's article in which she argues that people are looking at public spending 'through the wrong end of the telescope'. Did you read it?

annpettifor.substack.com/p/to-pay-for-nurses-wage-rises-raise?utm_source=substack&utm_medium=email

varian

The UK’s failure to get serious about inequality and weak growth over the past 15 years has left the average British household £8,800 poorer than its equivalent in five comparable countries, research has found.

A “toxic combination” of poor productivity and a failure to narrow the divide between rich and poor had resulted in a widening prosperity gap with France, Germany, Australia, Canada and the Netherlands, the report from the Resolution Foundation said.

The thinktank said that if the UK matched the average income and inequality levels of those countries, typical household incomes in Britain would be a third higher and those of the poorest households two-fifths greater.

www.theguardian.com/business/2022/jul/13/average-uk-household-8800-a-year-worse-off-than-those-in-france-or-germany

Note that this article was first published in July, so does not take account of the damage inflicted on our economy by Truss and Kwarteng.

After the plague years in England, the artisan class was severely depleted and this resulted in economic decline for a prolonged period.The very wealthy were still in place at that time with a rigid societal hierarchy .
Just a thought that the equivalent of a broad artisan class now might increase the general pot of wealth for the whole society rather than expecting trickle down economics or very high taxation for the very wealthy.

After the plague years in England, the artisan class was severely depleted and this resulted in economic decline for a prolonged period.The very wealthy were still in place at that time with a rigid societal hierarchy .

Which 'plague years' are you thinking of, ronib?. 'Plague'' was endemic throughout the world for centuries (I believe it still is in some countries) with varying severity .

If you're talking about the mediaeval 'Black Death' episode in Britain, though it may have depressed the economy it also spelled the end of the feudal system as the 'labour' that survived was able to transfer itself, relatively unhindered, to where it was needed and better rewarded. Or so I've always understood.

Just a thought that the equivalent of a broad artisan class now might increase the general pot of wealth for the whole society rather than expecting trickle down economics or very high taxation for the very wealthy.

Talk of 'increasing the pot of wealth' is all very well, but without an explanation of the source of the 'wealth' how can one explain just how they are going to achieve it?

This was part of the problem with the Truss budget. It offered no coherent explanation of how growth was going to happen as a result of her policies. Magical thinking doesn't impress everyone.