Outstanding private I mean
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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.
Dyson moved his manufacturing abroad well before Brexit.
Despicable man.
Ronib the choice will still be there for your GS to go to private secondary school, should his parents wish. I don’t think they will need to be oligarchs to afford it!
But, who knows, they may decide to choose state provision, which may be outstanding by then. State schools are not always second best … in the same way that private schools are not necessary ‘the best’.
ronib
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…..
Not all State schools are wonderful. Some are bog-standard or worse.
necessarily
Agreed Allira; not all private schools are wonderful!
Fleurpepper
Despicable man.
It depends if he wanted his goods to be competitive in an increasingly competitive market I suppose.
Dyson cleaners are made in Malaysia, most other vacuum cleaners are made in China, even top-of-the-range vacuums.
I believe the only British made ones are Henry and Hetty.
Fleurpepper
Despicable man.
Why?
Don’t you think people should have the freedom to operate their business in any way they choose, so long as it is legal?
Personally I think it poor form, but I don’t think anyone is despicable for doing this. Richard Branson and a multitude of pop stars refuse to live in Britain under any government because of draconian tax regimes here. If we want these people to spend their money and pay their taxes in Britain, we shouldn’t make it totally unacceptable for them to do so. They have made their money and they have paid their taxes as they have done so.
LizzieDrip of course my son and his family can always move abroad which is another option.
The two very academic private schools near his home are market leaders and have been for a long time. I think the fees will be roughly £24k at today’s prices so for 2 children that is a cool £335k approx. I am glad you think my son can afford it as he is moving to his first family house soon and even that is a stretch around here. Take 20 percent off the school fees and it might be possible.
Obviously I don’t know your son’s financial situation - it was you that mentioned the ‘oligarch’ term.
Perhaps your grandchildren may have to attend a state school then.
Fees at schools in question are £28k
Fleurpepper
Despicable man.
Why exactly?
Dyson employs 3,500 people in the UK, has started up an innovative research centre and an Institute of Engineering and Technology to give young people the opportunity to train as world-class engineers of the future. There was obviously a gap in training for young engineers and technologists, an indictment of our attitude towards engineering in this country.
Dyson also pays his due personal and corporate taxes in the UK, unlike many, and is amongst the top taxpayers in this country.
ronib
Fees at schools in question are £28k
And that is relatively very reasonable.
Add on 20% too.
LizzieDrip of course there may be a change of government in the next 7 years although whoever is in charge is unlikely to bother about making private education vat free.
Other private school fees are much cheaper. Locally around £16k a year. Still a massive commitment for families and it's striking that almost 25% of children locally go to private schools. LA schools will be swamped if children have to leave the private schools. Of course they could keep the fees the same after the VAT increase but only if they cancel all the bursaries and free places they currently offer. It's not a straightforward situation.
Allira if there are two high incomes then it’s possible to pay for one child but my granddaughter is to be given the same educational opportunity as her brother. So looking at £60k annually from 11 years.
How does the State manage to pay only £8k a year to provide the same educational services when the cheapest private schools are £16k rising up?
Absolutely no evidence of high earners leaving Scotland. This is a myth perpetuated by the Tories. The free prescriptions, University education, bus passes for youth and older citizens etc etc more than make up for the marginal extra tax
ronib
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.
This may be of interest:
chorusfinancial.es/general-taxes-in-spain/are-taxes-higher-in-spain/#:~:text=Wealth%20Tax%3A%20Spain%20has%20a,have%20a%20comparable%20wealth%20tax.
Jane43 The real attraction of moving to Spain is possibly the weather and the fact that it has a smaller population by 20 million over the Uk. I don’t know for sure….
How does the State manage to pay only £8k a year to provide the same educational services when the cheapest private schools are £16k rising up
Perhaps private schools are ripping people off!
LizzieDrip that’s one thought but private schools pay staff more than State schools?
Maybe the State needs to go for full equality and pay teachers more?
Richard Branson and a multitude of pop stars refuse to live in Britain under any government because of draconian tax regimes here.
There really isn't a draconian tax regime for the wealthy in the UK, maddyfour. When the millionaire former UK PM paid only 22% of his income in taxes, as opposed to (government figures) the very poorest percentile in the UK paying about 34% of its income in taxes there is something sadly awry.
MaizieD the very poorest percentile don’t pay tax to my knowledge?
Of course the very riched should be taxed more than the poor. The gap between the rich and the poor is getting wider daily.
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