Britain's Tax Con

Lambert doesn't seem to go into any great detail about how Council Tax or, as per his description, an annual Property Tax would be used Maisie. If you go with his comment about States, I would expect it to remain with the Council but, although his idea would be fairer for individual households, it would, as you say, mean some councils would become dramatically poorer and others richer.

He seems to be seeing it as a simple redistribution not a tax raising vehicle. He does say A proportional property tax would not raise revenue, but it would even the burden between poor and rich households. That would galvanise the economy, as the rich save and the poor spend. But Labour will also need to raise fresh revenues in order to cut taxes for those in work.

He also points out that the reforms he is suggesting are not radical and are accepted by many. His article seems to suggest Starmer does not "get" this, because he believes he can emulate Blair. I don't agree. I think Starmer is his own man, prepared to learn from anyone and everyone who knows what they are talking about in order to get things done.

So far he has suggested a change from Council Tax to a Property Tax. That seems to need a centralise and redistribution element and I don't feel that fits with Starmer's definate belief in the redistribution of power out of the centre and down to smaller entities. However, I wouldn't dismiss some change.

Another suggestion is on NI. Again, this would carry many people with him.

The third is reversing George Osborne’s 2016 capital gains tax cut. I doubt this would be in a manifesto, although to be sure it gets through Parliament it would have to be. I don't think I have enough in depth knowledge on this. Starmer always has to balance winning with what they can do once in power.

Lambert tells us Treasury analysis at the time had shown that 28 per cent was the revenue-maximising rate: a higher rate would deter entrepreneurs; a lower rate would cost Britain money. Osborne duly cut the rate to 20 per cent. Reversing that cut could raise £7bn. In 2018, before she disavowed change, Reeves went further, proposing to equalise capital gains rates with those on income tax, which could raise twice as much. Perhaps step one, the rise to 28%, could be in the manifesto?

I don’t think an annual property/wealth tax is practical although valuing property is not difficult it’s done routinely with probate and when property is sold.
It’s much easier to tax on sale or death when the cash is actually available, older homeowners living in a valuable property just don’t have the cash to pay an annual tax.

apologies for the many typos I've discovered once I posted

To return to your question about Lambert's suggestion of replacing council Tax with a property value tax, DAR.

As far as I can see it would firstly, need a revaluation of all properties which a liable for Council Tax at present. A revaluation which is long overdue anyway, because Council Tax is being paid on the property valuation which applied when the tax was introduced 30+ years ago and has never been revise. But it would be a costly and lengthy operation which I don't think any government has the courage to undertake.

Secondly, identical properties will have wildly differing values depending on which part of the country they are in. yet the occupants may well have more or less the same income and/or require similar services..

Which makes me wonder what the destination of this proposed tax would be. Would it go the central government to be redistributed among local authorities or would it be directly collected revenue for the LA? If redistributed by central government there would be the inherent unfairness of people in different areas paying different amounts for the same services. If the LA kept the money there would be big differences in income between LAs which would probably lead to differing levels of services.

I think it's a non starter.

GrannyGravy13

If the personal allowance was to be increased it would help a lot of people both young and old.

The squeezed middle income group are the ones with big mortgages, raising their families and in many cases not in receipt of child benefit payments. The last thing they need is an increase in taxes.

The elephant in the room is unscrupulous employers not paying their staff an adequate salary which the government then tops up with benefits.

In the source I suggested for this debate the author quotes Gary Stevenson, a man who grew from being beside a railway track in Ilford, east London, the son of a Post Office worker on £20,000 year to being extremely wealthy (it tells you more in piece) by betting against the stock market.

As a boy, Stevenson had thought of the rich as those on big salaries. In the public’s mind, taxing the rich meant taxing well-paid work. But as Stevenson became rich himself a reality dawned on him: among the wealthy, income was secondary, a sop to the taxman. The ownership of assets was the real game, and assets were taxed far more favourably than labour.

“It doesn’t matter what you do for a job,” he says today. “You can’t compete with wealth. It confers its own income, it compounds, and you don’t need to work for it.”

Raising the income tax personal allowance would help but, realistically, will it ever be enough iffthe income from wealth is not taxed with it and at the same (progressive) rates?

I don't quite understand how a thread about taxing wealth boils down to a defence of SMEs and 'middle income' earners.

Does no-one think that the fact that the people with the most wealth pay the least tax (apparently it works out at about 4% in most countries when asset wealth is included) is unjust and unjustifiable?

Oreo

Katie59

Income or wealth is like a pyramid with a few super rich at the top and a lot of low income at the bottom, the middle income group is large. They will likely have a wealth of £500k+ when their mortgage is paid off and still have an income either from employment or pension.

I guess many of us on Gransnet are in this group and of course we don’t want to pay more tax, I’m pretty sure Labour will find a way of taking more tax.

I’m not in that group Katie59 but would like to be.From what I’ve read Labour won’t be making many changes to taxation apart from tinkering round the edges, getting rid of non dom status and charitable status from private schools.
Both of which are good to get rid of in my view.I think middle income earners will be left alone at least for a good while.

Would you like Labour to make more changes Oreo? If so which ones? I've quoted two from the article. Are there any you think are more, or less important in the ones the author talks about?

If the personal allowance was to be increased it would help a lot of people both young and old.

The squeezed middle income group are the ones with big mortgages, raising their families and in many cases not in receipt of child benefit payments. The last thing they need is an increase in taxes.

The elephant in the room is unscrupulous employers not paying their staff an adequate salary which the government then tops up with benefits.

Katie59

Income or wealth is like a pyramid with a few super rich at the top and a lot of low income at the bottom, the middle income group is large. They will likely have a wealth of £500k+ when their mortgage is paid off and still have an income either from employment or pension.

I guess many of us on Gransnet are in this group and of course we don’t want to pay more tax, I’m pretty sure Labour will find a way of taking more tax.

I’m not in that group Katie59 but would like to be.From what I’ve read Labour won’t be making many changes to taxation apart from tinkering round the edges, getting rid of non dom status and charitable status from private schools.
Both of which are good to get rid of in my view.I think middle income earners will be left alone at least for a good while.

I should add that the article comments in greater depth on their (knowledgeable) result of this possible tax change.

Their next suggestion is:

... Labour will also need to raise fresh revenues in order to cut taxes for those in work. There is a compelling way to do so: by applying National Insurance, a tax paid by workers, to landlords and speculators, the primary beneficiaries of QE, who profit without working.

Again, what are the pros and cons of this? If you read on in the article, from my quote on this, you can see the author's suggested outcomes and his research.

One point made in the article - which talks about Labour's tax options when in power, is "By raising taxes on wealth, Labour could, crucially, cut taxes on income."

One of the taxes the author looks at is Council Tax.

It is regressive by design and labyrinthine in complexity. Labour could abolish council tax and stamp duty, a tax that only serves to freeze the property market. Every property owner in the UK would instead pay 0.5 per cent on the value of their home. That would raise as much revenue while cutting taxes for three in four people, according to the Institute for Public Policy Research. Proportional property taxes such as these are commonplace in US cities. Britain is the aberration.

To those who know about these things could you explain why this is a good idea? Why a bad one?

Income or wealth is like a pyramid with a few super rich at the top and a lot of low income at the bottom, the middle income group is large. They will likely have a wealth of £500k+ when their mortgage is paid off and still have an income either from employment or pension.

I guess many of us on Gransnet are in this group and of course we don’t want to pay more tax, I’m pretty sure Labour will find a way of taking more tax.

IIRC from last time I looked it up, it is the poorest who have the greatest percentage of their income taken up by direct and indirect taxation.

Oreo

Ok so your feathers are ruffled Varian just move on hey?

I have never, in something like 7 years, known varian to lose her cool. I don't think her feathers are in the least bit ruffled.

Grantanow

The reality of the UK is we don't pay enough tax to provide the public services we all want. It's true that there is waste but it's trivial compared with the overall costs. The question of how the tax burden is distributed is obviously contentious but essentially we should tax the super rich much more (yes, I know they contribute by spending but they have massive tax mitigation schemes) and the rich more. In both cases we should tax their non-monetary benefits. And the middle income earners need to pay a bit more too.

The super rich and the rich could pay higher taxes, but in my opinion anyone middle income need not pay any more tax. Middle income people are paying too much tax already.

Everyone?

Anyone?

It really isn't my decision to make Callistemon. I gave you a whole article of information and a podcast, that could be discussed.

That didn't create debate but did cause a pile-on, criticising someone for the structure of their sentence rather than debating it's content.

If you want to debate then I suggest you do so. Attacking first varian and then me, won't achieve that. It can be achieved unless, as it appears, some would rather attack people than debate the arguements put forward by people whose views they don't like.

The floor is yours Callistemon.

You wanted to continue the debate, DAR.
There is no reason not to, is there?

🙂

Or do you want to continue berating other posters?

You mean take a leaf out of your book Callistemon?

Oh, do continue 🙂

You are not the only one, Dinahmo. Sadly, there is no debate.

Perhaps another time, another day.

I did too 😁, thanks varian

But I can see that it might need clarifying.

The whole debate is getting silly. I cannot be the only one who understood what Varian was saying.

GrannyGravy13

I am neither left wing or right wing, I consider myself to be a centrist who is currently politically homeless.

Nobody will agree with any one poster on everything on N & P threads.

But they don't have to pile on about how a sentence was written GrannyGravy, just because the have no answer to that person's view of the facts.

Oreo

varian

Oreo

Dinahmo

Germanshepherdsmum

It seems she thought that if you earn above £50,284 you pay 2% NIC on your total income.

Strnge. Varian's post was quite clear to me.

No it wasn’t clear at all, it simply read that those earning over
£50,284 were only paying 2%.
That’s how it reads to most people.

It is a common assumption made by rightwingers that they speak for "most people" with no evidence whatsoever of that being true!

Since I’m a left winger that makes a nonsense of your claim.
Your comment about taxation wasn’t clear at all, take the shame girl😂

I am not a "girl", and the pile on, to which you appear to be trying to add, was not about me making an unclear claim about taxation, but about varian's clear comment which was jumped on.

It has long been seen as a reasonable politeness that people don't criticise how people write but they certainly have on this thread.

What no one has done is post why the NI system should be so regressive or why the more wealth should have greater privilege in the tax system.

It appears that no one had a reply to varian's point of discussion so they, and you it seems, just piled on to tear her sentence structure apart.

Just as many understood the sentence as those who decided who misread it and then blamed the writer for their lack of comprehension.

I have reported the whole thread to GN and asked them to read through it all.