I'm sure that if some of the 'super rich' leave the UK there will be people ready to take their place.
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Taxing the wealthy, point of discussion.
(297 Posts)This is the view of the guardian - I thought it worth a discussion.
Taxing the rich: essential for economic fairness and growth
Powerful vested interests are trying to stop the wealthy from paying their fair share.
Denis Healey is often misquoted as saying he wanted to “squeeze the rich until the pips squeak” in the 1970s. He never actually used that phrase. What Labour’s finance spokesman did predict, however, was that his proposed top tax rate would spark “howls of anguish from the 80,000 people” wealthy enough to pay. With Labour in power again, it seems plus ça change, plus c’est la même chose. On Thursday this newspaper reported that Rachel Reeves, Healey’s successor in the Treasury, was looking at taxing the rich more by increasing capital gains tax. That would be a very good idea. Yet “howls of anguish” fill the airwaves and can be found on newspaper front pages. Ms Reeves should ignore them.
For decades the rich have projected ideas that support their interests, notably by reframing political language to valorise “wealth creators”. Post the financial crisis, this has been a harder sell. But plutocrats won’t easily give up their muscle, privileges and wealth. In Britain, the grossly unfair distribution of power fuels the effort to protect 3,000 individuals in private equity from Labour’s plan to make them pay their fair share in tax. It’s absurd to think that successful capitalists require an annual state subsidy of £188,000 just to perform their roles. However, this is probably only the beginning of Labour’s efforts. On paper, Britain’s tax system seems relatively progressive, with a headline rate of 47% for those earning over £3m. In reality, nearly a quarter of this ultra-wealthy group pays less than 12% in taxes.
The true scale of income inequality in the UK has been obscured by the methods the wealthy use to generate income. Current measurements exclude the capital gains from selling or shutting down businesses – one of the primary ways the rich earn money and benefit from lower tax rates. A 2020 study found that the top 1%’s share of total income had stayed steady at 14% since 1997. However, when capital gains were included, that figure rose to 17%, with the bulk of the increase concentrated among the ultra-wealthy.
Ms Reeves should act to make Britain more productive. This week, the Institute for Fiscal Studies highlighted how the current tax system discourages investment, undermines productivity, and ultimately makes the country poorer. To reform capital gains tax the chancellor should look at the work of researchers from the Centre for Analysis of Taxation (CenTax). Their latest paper provides a blueprint for necessary reforms. It proposes aligning capital gains tax rates with income tax rates, introducing allowances to incentivise productive investment, taxing the increase in an asset’s value when it is inherited, and implementing an exit tax (common in major economies) to prevent individuals from dodging British taxes on gains made while residing in the UK. In total the package would raise £14bn.
Capital gains tax has morphed into a driver of inequality. The top 5,000 taxpayers account for over half of the taxable gains, receiving an average of nearly £7m each. In fact, the benefits per capita are four times higher in London compared with poorer UK regions. Creating a low-poverty, low-inequality society requires, as the Beveridge report declared in 1942, much more than “patching”. But powerful vested interests are pushing to make opposition to taxing the rich a key element of UK economic policy. Ms Reeves must remain committed to building a fairer and more productive economy, and taxing the rich is essential to achieving that goal.
I suspect that when a 'super-rich' person leaves the UK, s/he creates a vacancy. Sometimes people consider themselves so much more important than they really are.
Snap, Maisie! I somehow missed your post before posting mine 
Great minds think alike, Dd😆
I'm neither in the super rich set, nor part of the great minds club, but isn't it counterproductive to chase people with successful businesses abroad?
The situation always was, in my experience, that you can roll the proceeds of that enterprise forward to a new one in the country you are joining without paying any tax to the government of the country you are leaving?
escaped
I'm neither in the super rich set, nor part of the great minds club, but isn't it counterproductive to chase people with successful businesses abroad?
The situation always was, in my experience, that you can roll the proceeds of that enterprise forward to a new one in the country you are joining without paying any tax to the government of the country you are leaving?
I think it is highly unlikely that there will be a mass exodus of the wealthy from the UK. Their threats are part of lobbying to keep a status quo that is highly advantageous to them. An ability to maintain a taxation level of 22% isn't to be sneezed at.
Nor do I think it likely that there will be a mass exodus of children from private schools if VAT is implemented. It's all part of the same determination to maintain the status quo.
ronib
The richest people in the Uk are highly mobile and have the ability to jump ship if financial advantages are removed. Is Spain the country of first choice?
There is a wealth tax in Spain.
Anytime governments in this country set out to tax the rich they end up taxing the not so rich and then the middle income group until eventually everyone is taxed to the hilt. If we stopped obsessing about very rich people and created a system that was just we’d all be better off in the long run.
maddyfour
What I suggest Fleurpepper is that we, and the government, stop pretending that the super rich will be paying more (a very few might, but the majority will not.) We need to stop pretending and we need to start being honest and say it how it is. The moderately wealthy and the comfortable but not wealthy, will be paying the extra taxes. For some of us on GN, that means you. That’s the only thing we can do because we can’t do anything else. It doesn’t matter what I (or anyone else) might ‘suggest,’ the only thing that matters is that most of us on GN, and our relatives, will be doing the paying, not the super rich!
Exactly!
We've discussed the super rich all hading abroad endlessly, and famous examples are brought forward , but unless I am unaware of anything, we have no actual stats. In this scenario MaizieD is as likely to be right as others are in saying "they'll call go".
heading not hading
Jane43 it’s true there’s a wealth tax ranging from 1.7 to 3.5 percent on the richest. We would have to look at total wealth burden in Spain as compared to here.
I meant total tax
Doodledog
I suspect that when a 'super-rich' person leaves the UK, s/he creates a vacancy. Sometimes people consider themselves so much more important than they really are.
So do you think thst someone moving a company abroad is unimportant?
So many companies which started in the UK moved their manufacturing overseas.
I do think that is concerning.
Definitely concerned about that - it's been happening for a long time because labour is cheaper abroad.
Its different from the discussion about the super rich apparently emigrating with all their personal assets?.
maddyfour
I don’t think anyone is worried about the super rich. They’re just saying that the super rich will move their money, and so those paying extra taxes will be those who are certainly not super rich!
And we all know that. That is me/us, and my children and family. All done very well, high income, very good living, private schools for the kids, nice holidays, etc, etc, but NOT super rich. And yes, we, they, you are the ones who will always pay. Fair? Not it is not. BTW if your son pays 'eye watering' amounts of tax, he must be getting a VERY good income! But yes, I get what you mean.
So, again, Labour has inherited a diabolical situation from 14 years of disastrous Toryism and privatisation, and devaluation of education, NHS and social services, and utilities. And humongous amounts of extortionally expensive debts, with Sterling values so low that it makes all imports and repayment of debts even more diabolically expensive.
So, where do they get the money to invest as needed to boost the country and economy? If, as you say, they can't tax the VERY rich, as they will escape or find ways not to pay, and they can't tax the 'poor' for obvious reasons. Where, oh where, will they find the money. Just too simple to say 'not for me to suggest' - WHERE, HOW?
MaizieD what do you mean by “It’s all part of the same determination to maintain the status quo.”? Re Vat on school fees. The determination seems for poorer families, who have multiple reasons for choosing a private eduction, to be forced into State schools. Private boarding schools won’t stop - the number of pupils from abroad will increase and the major schools will thrive and the small ones go out of business.
GrannyRose15
Anytime governments in this country set out to tax the rich they end up taxing the not so rich and then the middle income group until eventually everyone is taxed to the hilt. If we stopped obsessing about very rich people and created a system that was just we’d all be better off in the long run.
The wealthy have their money tied up in business assets, property, shares and goods, you tax them when they are sold.
Wyllow3
Definitely concerned about that - it's been happening for a long time because labour is cheaper abroad.
Its different from the discussion about the super rich apparently emigrating with all their personal assets?.
I suspect that when a 'super-rich' person leaves the UK, s/he creates a vacancy.
That made it sound as if the super-rich person moving abroad was creating a vacancy for another entrepreneur to start a UK business; many people prefer to use home-produced toiletries, for example, as so many f the 'household names' started in the UK are now produced overseas.
Yes, more cheaply of course.
But otherwise what vacancy? 🤔
I don't know why I should worry.
Children went to the local comp, grandchildren go to the local comp, children all seem to have done ok despite that 😀
Same here.
Why should the tax payer support private education for the minority?
… to be forced into State schools
In the same way that 94% of children are currently ‘forced’ into state schools. State schools are not prisons; they’re actually pretty decent places.
Having worked in them, my daughter educated to a very high standard in one (not a grammar), and my GG currently receiving excellent education in one (again, not a grammar) … I speak from three generations of experience.
Ronib I wonder when you last went into a state school?
Wyllow3
Definitely concerned about that - it's been happening for a long time because labour is cheaper abroad.
Its different from the discussion about the super rich apparently emigrating with all their personal assets?.
James Dyson is a case in point- he left because of Brexit which he supported.
Wyllow3
Same here.
Why should the tax payer support private education for the minority?
Well, the jury's out for me.
VAT is a stealth tax as far as I'm concerned.
If it is increased in this budget it could cause a lot of problems for industry and for the economy.
If we decide to have a new kitchen why should the government get one-fifth (or, as is rumoured), one-quarter of the cost of the materials and labour?
The situation with taxes in the UK is far too complicated and needs an overhaul.
LizzieDrip I go to pick up my grandson from his local State school every week. It’s a great learning opportunity for him at the age of 4 and has a large field with plenty to engage him. At the moment he’s very happy however if he wants to move at 11 to an outstanding private State school as opposed to mediocre State provision, and that’s the choice around here, I don’t see he shouldn’t. I don’t expect my son to become an oligarch in the next 7 years but…..
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