Surely we must pay more taxes!?

David49

MaizieD

We still have the rich getting richer, 100 yrs ago it was idle rich, now it’s the business rich and they're much cleverer

It isn't only the 'business rich', though. There's a great deal of inherited wealth, too, we still have the 'idle rich'. But a large part of the problem is that the rich don't always invest in anything productive; they make very little contribution to society, to the extent of taking great pains to avoid taxation of their non productive wealth.

The old aristocracy that have still got the estates are very much working businesses these days, the great houses are either in trust or taken over by NT.
I’m not sure just who the idle rich are these days, those retired on fat pensions perhaps, or maybe Dyson or Ratcliffe who did “earn” their wealth.

Who?.

As I pointed out, Dyson and Ratcliffe are exceptions.

Norah

GrannyGravy13 Just because some folks will not get an inheritance doesn’t justify stopping others from inheriting.

Agreed.

Perhaps unfair council tax could be addressed.

www.economist.com/britain/2024/01/25/britains-council-tax-is-arbitrary-regressive-and-needs-fixing

Council tax does need to be extended so that high value properties pay according to their value

David49

Norah

GrannyGravy13 Just because some folks will not get an inheritance doesn’t justify stopping others from inheriting.

Agreed.

Perhaps unfair council tax could be addressed.

www.economist.com/britain/2024/01/25/britains-council-tax-is-arbitrary-regressive-and-needs-fixing

Council tax does need to be extended so that high value properties pay according to their value

Agreed.

Lots of others that aren’t everyday names, does it matter what happened in the past, in future any wealth transfer should be taxed whether it’s gifts, inheritance, business shares or property

I did mean lower the threshold so that IHT is paid on more estates, the bulk of inherited wealth is estates exempt from IHT

GrannyGravy13

Just because some folks will not get an inheritance doesn’t justify stopping others from inheriting or the punitive nature of IHT.

IGT has to be paid within a set time, before probate can be completed, which in many circumstances means bereaved families having to take out loans to pay taxes on money before they receive it.

That’s right - or pay a high rate of interest to defer payment until probate is granted and assets realised, probably by selling a house. We all know how long that can take.

I think that some of those who feel they may lose out if we try to rebalanced some of the inequality, muddle up being well off and being wealthy.

I think wealth implies a breadth of assets and financial security that extends beyond immediate comforts, whereas being well off refers to a solid yet more constrained financial position. Or as was suggested to me today, it's the difference between having to sell your parents home when they die to use the money to provide more security for you and your family and not having to do that but being able to make the choice to keep it or sell and re-invest the money.

Barleyfields

GrannyGravy13

Just because some folks will not get an inheritance doesn’t justify stopping others from inheriting or the punitive nature of IHT.

IGT has to be paid within a set time, before probate can be completed, which in many circumstances means bereaved families having to take out loans to pay taxes on money before they receive it.

That’s right - or pay a high rate of interest to defer payment until probate is granted and assets realised, probably by selling a house. We all know how long that can take.

While IHT is important topic on an individual level, this confuses the discussion focusing on how wealth distribution impacts the larger economy.

PoliticsNerd

Barleyfields

GrannyGravy13

Just because some folks will not get an inheritance doesn’t justify stopping others from inheriting or the punitive nature of IHT.

IGT has to be paid within a set time, before probate can be completed, which in many circumstances means bereaved families having to take out loans to pay taxes on money before they receive it.

That’s right - or pay a high rate of interest to defer payment until probate is granted and assets realised, probably by selling a house. We all know how long that can take.

While IHT is important topic on an individual level, this confuses the discussion focusing on how wealth distribution impacts the larger economy.

I don't agree. Inheritance is one of the main drivers of societal inequality, which is likely to widen in the future.

PoliticsNerd

I think that some of those who feel they may lose out if we try to rebalanced some of the inequality, muddle up being well off and being wealthy.

I think wealth implies a breadth of assets and financial security that extends beyond immediate comforts, whereas being well off refers to a solid yet more constrained financial position. Or as was suggested to me today, it's the difference between having to sell your parents home when they die to use the money to provide more security for you and your family and not having to do that but being able to make the choice to keep it or sell and re-invest the money.

I think both terms are meaningless. Well off/wealthy is a continuum, which can be plotted on a simple graph.

Well off, or wealthy.

If you have a house mortgage paid plus a good pension you are wealthy, that is well beyond “comfortable”. You have assets to pay for care for many years if needed, in addition the state pays you a pension and picks up any costs when your assets are depleted.

YOU are secure, the only issue is how much remaining should your heirs get, if you really want to rebalance wealth inheritances have to be reduced across the board.

I think both terms are meaningless. Well off/wealthy is a continuum, which can be plotted on a simple graph. (growstuff)

That's an interesting point about 'well off' and 'wealthy' being a continuum. It highlights how subjective perceptions of wealth can be. However, what's crucial to consider is how passive wealth, irrespective of where one personally stands on that continuum, can impact the economy as a whole.

The hollowing out effect, where capital is concentrated among a small percentage of the population, can stifle innovation, create barriers to entry for new businesses, and lead to increased economic inequality. I was trying to help set people's mind's at rest as I cannot imagine any suggested tax surcharge affecting any of our members.

I apologise if I lead this subject off topic. Perhaps we could focus on how passive wealth accumulation by a few is influencing broader economic opportunities for everyone, rather than getting bogged down in definitions.

I'm not sure I really understand what you mean by "passive wealth"?

David49 I agree with * if you really want to rebalance wealth inheritances have to be reduced across the board.*

Perhaps I've been talking too much to the generations after ours, but it's a term in regular use. If I explain it I am sure you will contradict me growstuff as you don't really seem interested in discussing the concept. It would be better for you to look it up as I have a busy morning ahead.

growstuff

David49 I agree with * if you really want to rebalance wealth inheritances have to be reduced across the board.*

I agree with it, too. It also works, as evidenced by Piketty’s data from the post WW2 era.

The other mechanisms that reduced the concentration and accumulation of wealth were high taxation of incomes (remember the Beatles song ‘Taxman’?) and capital controls which prevented capital being siphoned off abroad.

I would interpret ‘passive wealth’ as either being wealth which is unproductive or wealth that is increasing faster than the country’s rate of growth because the return on its investment is higher than the growth rate. But perhaps PN can clarify?

I’ll reference Richard Murphy again, I’m afraid, because I think his Taxing Wealth Report sets out some practical suggestions that would be simple to implement.

taxingwealth.uk/wp-content/uploads/2024/04/Taxing-Wealth-Report-2024-Shorter.pdf

The rationale is making taxation progressive by removing the differentials between taxation of capital and labour income which favour capital income.

The point which I think that people ignore is that a great many wealth accumulators are dependent on both workers and consumers to acquire their wealth, both of whom are relatively more heavily taxed.

There’s no need to be aggressive, PN. Defining terms is helpful to discussion.

PoliticsNerd

Perhaps I've been talking too much to the generations after ours, but it's a term in regular use. If I explain it I am sure you will contradict me growstuff as you don't really seem interested in discussing the concept. It would be better for you to look it up as I have a busy morning ahead.

Why on earth do you think I'm not interested in discussing the concept? On the contrary! I'm trying to understand what you mean precisely. Do you mean unearned income! I'd love to know what you mean because I genuinely am not sure.

MaizieD

There’s no need to be aggressive, PN. Defining terms is helpful to discussion.

Thank you Maizie.

I have just Googled "passive income" and it doesn't mean anything like I thought it did, so a precise definition from you would have been very helpful.

Maizie Your definition isn't the same as I found from Googling either. No meaningful discussion can take place without precise definitions.

MaizieD

There’s no need to be aggressive, PN. Defining terms is helpful to discussion.

I think you like to describe everything thst doesn't fit your well worn point of view as aggressive MaizieD. In this instance it's just a case of being in a hurry. I have never met anyone yet it's worth being aggressive towards.

^If you have a house mortgage paid plus a good pension you are wealthy, that is well beyond “comfortable”.
I'm not sure I agree with that. If it were the case, then a third of my generation would be wealthy, which is not really surprising considering that that same number were home owners nationwide, not just in the south-east, by the time they were 23 years old.

With so many improvements in health, education, technology and so many employment opportunities over the past 50+ years, I can't see how people in this day and age are still living in such poverty when previous generations managed with far less.

It wasn't a definition, it was speculation as to what it might mean. Anyway, I’ve looked it up, too, so now we both know what it means.

It puts me in mind of the story of the US woman whose wealth is so vast that it increases faster than she can spend it.

PoliticsNerd

MaizieD

There’s no need to be aggressive, PN. Defining terms is helpful to discussion.

I think you like to describe everything thst doesn't fit your well worn point of view as aggressive MaizieD. In this instance it's just a case of being in a hurry. I have never met anyone yet it's worth being aggressive towards.

There you go again. Perhaps you don’t realise you’re doing it?

Incidentally, it was nothing at all to do with my ‘well worn point of view’ as you must be well aware. The point was about a definition of a term.

Oreo

Whitewavemark2

I notice with no surprise whatsoever, that the VAT on school fees has made no discernible difference to state #school numbers.

It’s very early days.Parents won’t want to take children from a private school and put them in a state school, but those who were considering a private school for this September or next September for their child may well have to reconsider. I think this measure will take several years to know if it was actually worth doing or not.

That is correct , Oreo.
It is still very early days. Not just for the parents, but for the independent schools themselves, many of whom are currently offering "assistance" to pupils already attending their school. (Not assisted places as such).