In the UK, Capital Gains Tax (CGT) is generally not the same as Income Tax. Why not?

I have no problem with that, Maisie . As I have said, I don't have an Economics vocabulary. I just think that the constant reliance on 'working people' to support everyone else is deeply unfair, and people are getting sick of it, with potentially dangerous consequences.

David49

Growstuff

You know very well that anyone with a mortgage paid off and a nice pension fund has considerable wealth, it’s this group that holds a major part of the wealth of the UK, 37% as Private Property, 43% as pensions.
The Average wealth of to top 20% in the UK is £1.2m currently, that wealth is unlikely to be taxed at all. There is little point in a wealth tax unless it taxes £1m and upwards.

Sorry replied to PN

Growstuff

You know very well that anyone with a mortgage paid off and a nice pension fund has considerable wealth, it’s this group that holds a major part of the wealth of the UK, 37% as Private Property, 43% as pensions.
The Average wealth of to top 20% in the UK is £1.2m currently, that wealth is unlikely to be taxed at all. There is little point in a wealth tax unless it taxes £1m and upwards.

Whether it raised huge amounts or not, I think that taxing wealth would introduce a sense of fairness that the UK has been lacking for a long time.

The problem as I see it is that 'wealth' is something of a nebulous concept. For instance, suppose someone has a large holding of highly valued shares in a company. Their 'wealth' would appear to be appear to be high. But if the company went bust their shares would become worthless, or practically worthless. One day this individual is 'worth' a few £million, the next day, they're not. How would taxation of that 'wealth' be calculated? How would the taxation of any assets which could increase or fall in value be calculated?

On the other had, a tax on the means of acquisition of wealth would be based on a tangible amount which couldn't be disputed as it wouldn't fluctuate in value. So, capital gains tax, dividend tax, taxation of company profits, windfall taxes, IHT... Taxation that equalises the taxation of the wealthy and the rest of the population could lead to a more equable distribution without the difficulties inherent in the valuation of actual wealth.

Whether it raised huge amounts or not, I think that taxing wealth would introduce a sense of fairness that the UK has been lacking for a long time. Too many people work long hours for wages that have to be topped up with means-tested benefits that prevent them from being able to (eg) save for a house deposit or anything that costs over £6000, as as soon as they hit that amount of savings their benefits are clawed back. Their employers, OTOH, who are able to pay low wages because of those benefits, can spend and invest and save as much as they like, and their profits on investment are taxed at a lower rate, if at all.

The sort of education that can lift people out of low wage work costs more than many can afford, so people are trapped that way, too. Childcare is ruinously expensive, and rents on houses owned by private landlords are extortionately high, so it is very difficult for 20-35 year olds to start families, and the population as a whole continues to age.

I'm not surprised there is so much resentment of older people and of those who profit from the work of others, as so many people can't see a way out of dependency and a life of scraping by, even though they work hard. When they see others with good pensions they could draw at 60, houses that cost far less than their equivalents today and the gap between rich and poor rises year on year, resentment is to be expected. It's not about envy, before someone leaps to that conclusion - it's about basic unfairness.

I fear for democracy in the UK, as the resentments are leading to a swing to the right. People are easily persuaded that immigrants are responsible for lowering wages (and there is some truth in that, particularly at the lower-skilled end of the market), when taxing billionaires would affect very few people but bring in money that could be redistributed to make life fairer for all.

^I expected you and most others on GN to defend their wealth, ...^(David49)

When you find this mythical "wealth" would you let me know please!

I expected you and most others on GN to defend their wealth, I agree that everyone should be taxed on UK assets.

It’s very attractive for a Labour government to be seen taxing the rich but I really don’t believe significant revenue is going to be gained from 0.01% of the population, or even 1% which brings the level down to around £2m. Over £2m most wealth is going to be small business related that are already under pressure

Rosie51

MaizieD

Rosie51

MaizieD What a sad pair. When AI rules the world you'll be in a state of distrust and disbelief of everything it does....

A simple google search with the question "can AI be wrong?" brings up a page of links illustrating exactly how AI can indeed be wrong. That it may have been correct in your example does not guarantee reliability in everything. You are of course entitled to believe absolutely everything it says, I'll join others in a degree of scepticism.

Jeez. I'm perfectly well aware that AI can get it wrong, but do people seriously think that it can't manage a simple calculation? Maths can easily be checked. Real live humans have done just the same exercise and reached just the same conclusion.

I am still waiting for someone to tell me what was wrong with the exercise in question. Rubbishing AI isn't exactly debate, is it? It's just evading acknowledging that a result that some posters don't like could be correct. Or failing to state what could be wrong with it.

Goodness, I acknowledged AI was correct in your example, but your earlier post said AI has no biases. In a straightforward mathematical calculation that's true, as a blanket statement which is what yours appeared to be that's obviously untrue. Coupled with What a sad pair. When AI rules the world you'll be in a state of distrust and disbelief of everything it does.... your absolute faith in it seemed unquestioning. Don't shoot the messenger!

For clarification. I was responding with ‘what a sad pair’ to this extremely rude post from PN and the one agreeing with it.

Just in case anyone believes this silliness of course AI can be wrong. It basically depends on data used in the training, which may reflect historical inequalities, stereotypes, or incomplete information.

I will repeat, I am perfectly well aware of the deficiencies of AI. Far from having absolute faith in it I am deeply concerned about the enthusiastic and unquestioning reception it gets in many quarters. The ‘when AI rules the world’ comment was meant sarcastically, not seriously. A tool which (hallucinates) makes up events and citations is not one to be wholly trusted. I actually fear that it will be trusted too much.

However, it’s useful when asked a completely neutral question to which one already knows the answer, to summarise articles or to do a straightforward calculation… And I’m happy to declare when I’ve used it.

David49 Most, if not all of those people you describe, will not fall into the tax bands I, and others are talking about. They are the very people we need to maintain. This "middle income" group -often referred to as the middle class as a shorthand - is seen as important for both economic and social reasons.

They choose where they live and will change if it doesn’t suit them ...

We don't need too. They are and should be taxed on UK assets, not on where they live.

PoliticsNerd

David49

It’s not AI we should fear it’s the malicious use of AI that may be the problem.

Automation and robotics has deskilled many jobs, workers are often only slaves feeding robots. How we are going to earn wages to feed and house ourselves as well as pay taxes I’m not sure

The malicious use of industrialisation was a problem David49 but, due to people, from all walks of society, working together, they were able to improve life for those effected by it.

This time round we are, hopefully, more aware of the super-rich and their tendency to disregard the rest of humanity.

The super rich (over £10m wealth) have and will continue to live in their own world. They choose where they live and will change if it doesn’t suit them, they are less than 0.1% of the population we are not going to change that.

The real division is between the “haves” and “have nots”. Opinions here on GN from those with mortgages paid off and nice pensions are not willing to give up one penny of that wealth. They may talk the talk about helping the poor but do very little and insist all their wealth goes to their children

MaizieD

Rosie51

MaizieD What a sad pair. When AI rules the world you'll be in a state of distrust and disbelief of everything it does....

A simple google search with the question "can AI be wrong?" brings up a page of links illustrating exactly how AI can indeed be wrong. That it may have been correct in your example does not guarantee reliability in everything. You are of course entitled to believe absolutely everything it says, I'll join others in a degree of scepticism.

Jeez. I'm perfectly well aware that AI can get it wrong, but do people seriously think that it can't manage a simple calculation? Maths can easily be checked. Real live humans have done just the same exercise and reached just the same conclusion.

I am still waiting for someone to tell me what was wrong with the exercise in question. Rubbishing AI isn't exactly debate, is it? It's just evading acknowledging that a result that some posters don't like could be correct. Or failing to state what could be wrong with it.

Goodness, I acknowledged AI was correct in your example, but your earlier post said AI has no biases. In a straightforward mathematical calculation that's true, as a blanket statement which is what yours appeared to be that's obviously untrue. Coupled with What a sad pair. When AI rules the world you'll be in a state of distrust and disbelief of everything it does.... your absolute faith in it seemed unquestioning. Don't shoot the messenger!

I'm interested Sueki. Where did you get the misleading information that had you worrying? News sources really ought to be governed by law to ensure the information isn't misleading.

David49

It’s not AI we should fear it’s the malicious use of AI that may be the problem.

Automation and robotics has deskilled many jobs, workers are often only slaves feeding robots. How we are going to earn wages to feed and house ourselves as well as pay taxes I’m not sure

The malicious use of industrialisation was a problem David49 but, due to people, from all walks of society, working together, they were able to improve life for those effected by it.

This time round we are, hopefully, more aware of the super-rich and their tendency to disregard the rest of humanity.

Sueki44

What about the 40% tax from 2027 that will be imposed on any money left in pension pots upon death? I was expecting to inherit my spouses pension pot which he paid in with money that had already been taxed ( and vice versa). I have very little pension and we both contributed to a pension to try to try to safeguard our future independence but now stand to be taxed 40%. Seems unfair to savers.

It will be used for calculating inheritance tax if his estate is more than £1,000, 000. if it's less than that it won't be touched.

Do stop this 'double taxation' thing. It's nonsense, as I've already pointed out.

Norah

To your question - because income is different to gains.

No need whatsoever to equalise tax rates on gains and income.

Please explain how money which becomes part of your income, however transitorily, is different from income?

Rosie51

MaizieD What a sad pair. When AI rules the world you'll be in a state of distrust and disbelief of everything it does....

A simple google search with the question "can AI be wrong?" brings up a page of links illustrating exactly how AI can indeed be wrong. That it may have been correct in your example does not guarantee reliability in everything. You are of course entitled to believe absolutely everything it says, I'll join others in a degree of scepticism.

Jeez. I'm perfectly well aware that AI can get it wrong, but do people seriously think that it can't manage a simple calculation? Maths can easily be checked. Real live humans have done just the same exercise and reached just the same conclusion.

I am still waiting for someone to tell me what was wrong with the exercise in question. Rubbishing AI isn't exactly debate, is it? It's just evading acknowledging that a result that some posters don't like could be correct. Or failing to state what could be wrong with it.

Doodledog

Why not, Norah? If anything, I'd rather see earned income attract less taxation, as there is also an output that benefits society as a whole, whilst 'gains' only benefit the individual.

I'd like income tax bands changed, personal allowance and rates. I think as rates are people who make little are too heavily taxed. I don't see CGT as an answer.

What about the 40% tax from 2027 that will be imposed on any money left in pension pots upon death? I was expecting to inherit my spouses pension pot which he paid in with money that had already been taxed ( and vice versa). I have very little pension and we both contributed to a pension to try to try to safeguard our future independence but now stand to be taxed 40%. Seems unfair to savers.

Why not, Norah? If anything, I'd rather see earned income attract less taxation, as there is also an output that benefits society as a whole, whilst 'gains' only benefit the individual.

To your question - because income is different to gains.

No need whatsoever to equalise tax rates on gains and income.

It’s not AI we should fear it’s the malicious use of AI that may be the problem.

Automation and robotics has deskilled many jobs, workers are often only slaves feeding robots. How we are going to earn wages to feed and house ourselves as well as pay taxes I’m not sure

MaizieD What a sad pair. When AI rules the world you'll be in a state of distrust and disbelief of everything it does....

A simple google search with the question "can AI be wrong?" brings up a page of links illustrating exactly how AI can indeed be wrong. That it may have been correct in your example does not guarantee reliability in everything. You are of course entitled to believe absolutely everything it says, I'll join others in a degree of scepticism.

PoliticsNerd

Poverty, and even living on a middle income doesn't make actually surviving all that "efficient" David49.

The basics of being able to buy, or rent a home at an affordable level have been stripped from those of low and middle income. The ownership of assets has been stripped from government and those on middle incomes. Like you Doodledog it is the politics of wealth I'm interested in.

Ways of moving in any direction can be found if the will is there. The treatment of great wealth and the movement of assetts from those on low and middle incomes has been moving further to the right since the 70's. All I am suggesting is that we find ways to bring it back to the middle.

It’s business efficiency that pays all the taxes, suppress that profits fall, industries collapse, we’ve seen this over the decades, failure to modernize, handicapped many industries. No more than the renewable and EV industries we are so far behind the investment curve it’s hard to be optimistic.

Housing IS affordable all the new houses built ARE selling the problem is the aspiration of lower income workers is too high and supply of social housing is inadequate, yet governments refuse to encourage more private or LA provision.

Poverty, and even living on a middle income doesn't make actually surviving all that "efficient" David49.

The basics of being able to buy, or rent a home at an affordable level have been stripped from those of low and middle income. The ownership of assets has been stripped from government and those on middle incomes. Like you Doodledog it is the politics of wealth I'm interested in.

Ways of moving in any direction can be found if the will is there. The treatment of great wealth and the movement of assetts from those on low and middle incomes has been moving further to the right since the 70's. All I am suggesting is that we find ways to bring it back to the middle.