Surely we must pay more taxes!?

Norah

Doodledog, Most people are happy enough to contribute their share if they see it as fair. The question is - what is fair for everyone.

There is never going to be an agreement on that! Everybody thinks that what they have was gained fairly and they fight tooth and nail to hang on to it.

Doodledog

Yes, everyone earning over £12.5k would get a tax cut if the nil rate rose to £20k.

Yes, and that would need to be factored into changing rates.

Perhaps actually explain why changing all rates isn't feasible.

growstuff

Norah

Doodledog, Most people are happy enough to contribute their share if they see it as fair. The question is - what is fair for everyone.

There is never going to be an agreement on that! Everybody thinks that what they have was gained fairly and they fight tooth and nail to hang on to it.

Precisely.

The middle class are loosing their wealth and disappearing. Governments are effectively bankrupt- spending more than their income each year, going debt and having to sell assets.

So both British workers and the British Government are going increasingly into debt. Where has all the wealth gone?

The rich are growing their wealth rapidly and sucking the wealth from low and particularly middle income families and the government. Passive income grows but does not recycle because it isn't spent. Once you have a group in society with very large passive income, unless you have a rapidly growing economy, they have nothing the can do with that income other than buy the rest of the available assets. The value of assets that would be bought by the middle income, e.g., housing, then becomes out of reach to those on middle incomes.

and disappearing

PoliticsNerd

The middle class are loosing their wealth and disappearing. Governments are effectively bankrupt- spending more than their income each year, going debt and having to sell assets.

So both British workers and the British Government are going increasingly into debt. Where has all the wealth gone?

The rich are growing their wealth rapidly and sucking the wealth from low and particularly middle income families and the government. Passive income grows but does not recycle because it isn't spent. Once you have a group in society with very large passive income, unless you have a rapidly growing economy, they have nothing the can do with that income other than buy the rest of the available assets. The value of assets that would be bought by the middle income, e.g., housing, then becomes out of reach to those on middle incomes.

One person's debt is somebody else's wealth.

growstuff

PoliticsNerd

The middle class are loosing their wealth and disappearing. Governments are effectively bankrupt- spending more than their income each year, going debt and having to sell assets.

So both British workers and the British Government are going increasingly into debt. Where has all the wealth gone?

The rich are growing their wealth rapidly and sucking the wealth from low and particularly middle income families and the government. Passive income grows but does not recycle because it isn't spent. Once you have a group in society with very large passive income, unless you have a rapidly growing economy, they have nothing the can do with that income other than buy the rest of the available assets. The value of assets that would be bought by the middle income, e.g., housing, then becomes out of reach to those on middle incomes.

One person's debt is somebody else's wealth.

It seems more relevant to understand that one person's wealth creates another person's debt, the country's debt and, at some point, depreciating assets.

I seem to have fat fingers today more. I think it's when I edit. Sorry!

It seems more relevant to understand that one person's wealth creates another person's debt, the country's debt and, at some point, depreciating assets.

If you are taking the ‘more’ out of that statement it then becomes the reverse of growstuff’s (apart from the ‘depreciating assets’)

The problem is that the ‘country’s debt’ is people’s and institutions’ savings and investments. Do you not want the country to offer a safe vehicle for these?

Land tax is problematic because a value has to be established before it can be taxed. We know that land values have been inflated because of wealthy people buying land to evade full IHT. But if it’s taxed at these inflated values where do farmers who are land rich but cash poor stand?
There is also the problem that not all land is registered, so tracing owners could be costly. Also, it could be difficult to trace the beneficial ownership of land when it is held in a network of shell companies. Who is then taxed?

I can’t see a problem with equalising tax rates on earned and unearned income and vastly increasing the range of rates.

P.S I’ve been quiet this weekend because I’ve been away with very little opportunity to spend time on line. The little maizie hatefest shocked me a bit. I feel more like an early christian martyr, reviled for my faith, than a Pharisee, but of course, everyone is free to speak, and to ignore posts they don’t like..

I know Richard Murphy isn't exactly flavour of the month on GN (according to some posters). However, he is very good at explaining quite complex issues in simple terms. This video explains why the national debt is necessary and not the huge curse people seem to think it is:

www.taxresearch.org.uk/Blog/2024/05/08/why-we-have-a-national-debt/

“We know that land values have been inflated because of wealthy people buying land to evade full IHT. But if it’s taxed at these inflated values where do farmers who are land rich but cash poor stand?”

Be accurate Maisie “avoid” not evade, no IHT on farmland and woodland is a deliberate concession to help the industries concerned, both very low profitability.
That has now been distorted because landowners can now hold land without actually producing food or timber, just claiming the environmental payments.

MaizieD

P.S I’ve been quiet this weekend because I’ve been away with very little opportunity to spend time on line. The little maizie hatefest shocked me a bit. I feel more like an early christian martyr, reviled for my faith, than a Pharisee, but of course, everyone is free to speak, and to ignore posts they don’t like..

It’s not a “hatefest” you have an academic view of economics, I pretty much agree with the economic theories, I profoundly disagree with the way polititians apply the resources they have.
In the case of the UK there has been almost no investment in productive infrastructure for decades.

It was well known before the GE that Sunak had engineered a big pile of debt due in 2025-26. Starmer knew that, yet ruled out tax rises in almost very field to win votes, now the pigeons have come home to roost he is faced with cutting benefits to balance the books.

Locally we have had a lot of pubs and restaurant closing since Christmas, other service providers are seeing reduced spending, customers are sitting on what cash they have, the outlook seems pretty gloomy

It was well known before the GE that Sunak had engineered a big pile of debt due in 2025-26.

You need to read growstuff’s link, David 😆

I agree with David49 👍🏻

Furret

Of course we must all pay more taxes. I’m sick of the moaners who think the NHS, Education, Police etc run on air. That potholes heal themselves and the bins empty themselves.

This is why we are in the mess we are in. Everyone needs to pay up; the wealthy too. They are often paying less pro-rata.

The Numpties that have replaced the Totally Incompetents who in turn replaced The Good Old Boys need to get to grips with reality. The majority of the public know taxes must increase - especially in view of the idiot(s) in the WH and the Mad Man in the Kremlin .

Love it😄
Just what I think too Furret

Unless you were exceedingly rich MaizieD you would not be paying the higher level. I thought I had made that clear; I apologise if it wasn't.

I'm not wedded to land tax (LT), but haven't seen anything better so far and council tax needs sorting out. One plus with LT is that it is a simple tax on the owner of the property.

PoliticsNerd

Unless you were exceedingly rich MaizieD you would not be paying the higher level. I thought I had made that clear; I apologise if it wasn't.

I'm not wedded to land tax (LT), but haven't seen anything better so far and council tax needs sorting out. One plus with LT is that it is a simple tax on the owner of the property.

I'm not aware that I was expressing any concern about paying a 'higher level'. Though I'm not sure what 'higher level' of what tax you are referring to?

I took your post as being concerned with the top 1 (or5) percentile, which I'm nowhere near being apart of. 'Nor, I suspect, would anyone posting on this forum be.

It's the wealthy in this percentile group who are absorbing our country's wealth, isn't it? That's who the Economics article you talked about was concerned with (and I think they're possibly influenced by Pikety.)

I just don't think that a land value tax is simple or straightforward. I think it would still bear more heavily on the 'ordinary' citizen than on the super wealthy.

(And apologies to David for my misnaming 'avoidance' as 'evasion' )

Mollygo

Barleyfields

That question never gets answered MOnica.

Wealthy is anyone who doesn’t need the WFA,
who can leap into an EV unconcerned about the life of the battery,
who will be unworried by the discussions about future banning of gas boilers and obliging people to have a heat pump.

How does a government decide who 'needs' the WFA?

That sounds like you are advocating the worst kind of means-test, whereby someone who may have saved from an average or low income so that they could travel in retirement (or buy a harp, or rescue donkeys), but because they have some money in the bank as a result of planning for their dreams are deemed not to 'need' something that those who 'spent as they went' get free. Basically, keeping them in their place.

I don't know about EV batteries - why would some worry and not others? Doesn't that depend on the length of the journey?

Heat pumps - yes, I think the idea that people might be expected to pay £30k+ for a heat source is bonkers. Something will happen between now and the deadline (if the deadline ever comes), as that is an unrealistic demand. But again, someone might have that £30k in hard-won savings - should they be obliged to spend it on a heat pump instead of the harp or donkeys, when grants are given to others who haven't saved? Is such a blunt measure of 'wealth' remotely sensible?

To me, 'wealth' is unearned income. Inheritance, trust funds, that sort of thing. It is not the same as savings from earned income, although when it comes to interest on those savings I suppose anything that increases their value above inflation could be counted as wealth. It's not about a figure, it's about source.

I appreciate that it would be difficult to separate it out without giving very intrusive access to people's accounts and affairs, though, and even then, some things would come down to subjective assessment.

I was talking about an economics article? My post was about an addional tax, a special levy, on passive income earned by the very, very rich which could be the top 1% or 5% but should not be on those on middle incomes.

Sorry. The above was a reply to MaizieDs post. (Distracted by phone call)

To be in the top 5% of earners you need to earn £87,012 pa. That might seem a huge amount to some but it really isn’t.

Your definition of ‘wealth’ is interesting Doodledog and one with which I would be happy to agree.

This is not about earned income Barleyfields.

The top 5% of earners aren't necessarily in the same group as the wealthiest 5%. The wealthiest 5% have assets which are just as likely to have been inherited as earned.

PoliticsNerd

I was talking about an economics article? My post was about an addional tax, a special levy, on passive income earned by the very, very rich which could be the top 1% or 5% but should not be on those on middle incomes.

Oh, I am sorry to have baffled you, PN.

You were talking about having seen an article in The Economist (not an 'economics article) about how the super wealthy were accumulating more and more of the nation's wealth.

I think it was on another thread somewhere because I can't find it on this one. 🙁