Is wealth inequality causing the big issues of our day?

keepingquiet

I don't think most people on Gransnet have any concept of how wealthy and exclusive the 'super-rich' really are.

I think they (we) do.

We can read!

The Times Rich List has recently been published, in addition Musk has been in the news in the last few days as it’s said he’s about to become a “trillionaire”.

My DH and I follow horse racing and F1, plenty of “super rich” in those areas too.

Little bit patronising to assume that because us Gransnetters don’t personally mix or know the “super rich” that we have “no concept”

My point was simply that £50m in either assets or income, is more than simply “wealthy”.

I would hazard a guess that we have a diverse mix of incomes on here, from those relying on pension credits with little savings, to those on new SP with modest private pensions, those still working with average and much higher than average incomes and those retired with extremely generous private pensions.

We are in the bracket of retired, full new SP and modest private pensions. We consider ourselves fortunate, we are mortgage free, can pay our bills and live a reasonably comfortable lives.

My vision would be for all people to enjoy this “privilege”, nobody needs to be a “billion” or “trillionaire”.

In my opinion, and it’s only my view, it’s utterly immoral for individuals to have that amount of wealth whilst people are struggling in our world with clean water, food and medical care, just my belief, not shared by all.

Whitewavemark2

Yes Piketty is almost certainly the foremost economist but Stiglitz (sp) is another and there are a few American economists which outline the way a wealth tax should and can be applied. But this isn’t an economics lecture😄😄

This is me arguing that the accumulation of wealth must be controlled because without doing so the world is going to hell in a handcart.

Your last sentence was a tad Unfortunate, but hey Ho.

What you are saying is clear Whitewave.

I only learned recently that in October 2021, over 130 countries and jurisdictions, members of the OECD and G20, agreed to establish a minimum corporate tax rate of 15%. This agreement aims to prevent large multinational corporations from shifting profits to low-tax jurisdictions (tax havens) and to ensure they pay a fair share of taxes globally.

Perhaps we should be discussing an international wealth tax.

cossy yes and my point is that the wealthy are becoming richer and richer, and the poor, poorer and poorer, that includes what we see as middle class.

There is nothing that is going to stop that trend.

Well, not quite true - we could suddenly find ourselves in the happy situation of economic growth that exceeds the ability of the super rich to hoover up the entire amount, but this hasn’t happened for decades and decades. We could I suppose have a Revolution or war - pretty undesirable. Which is why I am arguing that tax is the only way forward.

It will not be easy, as all of us understand. But the alternative is too awful to contemplate, particularly with AI breathing down our necks.

DaisyAnneReturns

Whitewavemark2

Yes Piketty is almost certainly the foremost economist but Stiglitz (sp) is another and there are a few American economists which outline the way a wealth tax should and can be applied. But this isn’t an economics lecture😄😄

This is me arguing that the accumulation of wealth must be controlled because without doing so the world is going to hell in a handcart.

Your last sentence was a tad Unfortunate, but hey Ho.

What you are saying is clear Whitewave.

I only learned recently that in October 2021, over 130 countries and jurisdictions, members of the OECD and G20, agreed to establish a minimum corporate tax rate of 15%. This agreement aims to prevent large multinational corporations from shifting profits to low-tax jurisdictions (tax havens) and to ensure they pay a fair share of taxes globally.

Perhaps we should be discussing an international wealth tax.

Yes international taxation seems sensible. The EU has been doing it since its inception in the form of VAT. It would be very easy to look at that system.

Whitewavemark2

cossy yes and my point is that the wealthy are becoming richer and richer, and the poor, poorer and poorer, that includes what we see as middle class.

There is nothing that is going to stop that trend.

Well, not quite true - we could suddenly find ourselves in the happy situation of economic growth that exceeds the ability of the super rich to hoover up the entire amount, but this hasn’t happened for decades and decades. We could I suppose have a Revolution or war - pretty undesirable. Which is why I am arguing that tax is the only way forward.

It will not be easy, as all of us understand. But the alternative is too awful to contemplate, particularly with AI breathing down our necks.

I do understand what you are saying.

I also think that the boat has well and truly sailed.

The really super rich will (and do) have ways of not paying tax, to bring in another tax they will no doubt find ways to off set their £££

It’s the squeezed middle earners which are hurting financially at the moment, those with hefty mortgages and families. Along with those not eligible for any state help, what ever age.

Whitewavemark2

cossy yes and my point is that the wealthy are becoming richer and richer, and the poor, poorer and poorer, that includes what we see as middle class.

There is nothing that is going to stop that trend.

Well, not quite true - we could suddenly find ourselves in the happy situation of economic growth that exceeds the ability of the super rich to hoover up the entire amount, but this hasn’t happened for decades and decades. We could I suppose have a Revolution or war - pretty undesirable. Which is why I am arguing that tax is the only way forward.

It will not be easy, as all of us understand. But the alternative is too awful to contemplate, particularly with AI breathing down our necks.

Do agree, and I think I “misunderstood” a couple of your posts earlier in this thread.

Whitewavemark2

david49

So at the moment, the U.K.s growth is roughly 1% GDP. The super wealthy’s growth is say between 20-50% pa, and that wealth has come from the likes of me and thee, the less well off and middle classes as well as governments, in the form of stocks, property and debt. So it doesn’t take much imagination to understand where the wealth is flowing.

I've been saying this for what seems like years!

The responses always end up like Sago's, telling us how wonderfully benevolent the wealthy are, or how we depend on the wealthy for jobs and their spending. Or quibbles about how 'wealth' is defined. Some people even seem to think that the wealthy somehow create money.

It's always about wriggling out of talking about how and why the wealthy get their wealth, and looking at the corrosive effect inequality has on society.

This is what makes discussion of taxing wealth so futile. IMO

gg13 I sort of am in agreement about the boat, but I’m sure that once people understand the consequences of doing nothing, they will demand that governments do something, and in a way that is what is happening.

At the moment it is at grass roots level with the so called left behinds looking for who to blame and voting for party who seem to be offering them help.

But it will never happen. Their plight will eventually become the countries plight as I can’t see it ever changing.

So maizie are you simply going to lie back and think of England whilst all our assets are raped?

twaddle

Sago

We have just been away in Jersey to stay with dear old friends who are in the super wealthy league.

One of the main reasons they are on Jersey is so they can continue their Family Foundation which is a social enterprise helping many people.
UK tax system would make this very difficult.

They employ hundreds of people in the UK, spend money wisely to benefit the local economy, are incredibly altruistic and of course are giving back to society.via their foundation.

Why should they give more and more, IMO they contribute enough as it is, if it wasn’t for the spending power of people like this a lot of businesses would suffer.

What would happen to their money if they didn't own it?

As it happens, I know somebody who is in and out of the UK top 100 rich list. He lives and is domiciled in the UK and has no problem paying UK tax. He also gives away a huge chunk of his wealth every year.

"What would happen to their money if they didn't own it?

As it happens, I know somebody who is in and out of the UK top 100 rich list. He lives and is domiciled in the UK and has no problem paying UK tax. He also gives away a huge chunk of his wealth every year."

He has the same rules as the rest of us what he donates to his/her pet charity is done on gift aid and tax deductible. Most rich do give away a good deal of their wealth, Bill Gates funds vaccination programmes, even Warren Buffet aims to donate most of his billions to charity.

Whitewavemark2

So maizie are you simply going to lie back and think of England whilst all our assets are raped?

Until such times that someone/any government comes up with a workable wealth tax that actually catches the mega rich and not just the low hanging fruit (PAYE and upfront tax payers) I am not sure if I could back it.

Yes, I know that, David. What I'm saying is that he doesn't moan about it nor about paying tax and he still lives in the UK and has no intention of emigrating.

Whitewavemark2

So maizie are you simply going to lie back and think of England whilst all our assets are raped?

That's exactly what the majority of the population do they are seduced by the easy credit availability to buy a larger house than they need, a better car, more holidays and a thousand other things they want but don't need.

A wealth tax is not going to address the flow of money out of the UK we have got to stop borrowing and importing to keep more wealth in the UK . Do I expect that to happen, NO, because most of the population want instant gratification.

If we really want to improve equality change the inheritance tax rules so that ALL estates pay some IHT, £1m tax free for a couple perpetuates the wealth divide. Which has nothing to do with money going out of the UK.

Whitewavemark2

So maizie are you simply going to lie back and think of England whilst all our assets are raped?

More or less, Yes.

I will continue to make my futile attempts on Gnet to show how the current economic orthodoxy is harming us and how the much despised MMT insights into the workings of a national economy could be harnessed to effect a change .

And I am thinking of changing my user name to Cassandra.

I agree with, David, but wait for the squeals.

Yes I do agree that the logic of MMT holds up as a description of how the system works, but at the moment it sits outside mainstream economic theories, which arguably goes to serve the neo liberal agenda. But the trouble is the government regardless of the fact that it can print its own money is operating in a system that behaves as if the neoliberal agenda is the only horse in the running. So the market can simply withdraw its support by selling government bonds etc.

But the trouble is the government regardless of the fact that it can print its own money is operating in a system that behaves as if the neoliberal agenda is the only horse in the running.

I know that.

But it's not only the government which operates in this system, it is the electorate and its opinion formers that believe it to be the only system possible which perpetuates it.

So the market can simply withdraw its support by selling government bonds etc.

We have to kick back against 'the market'. It's one of the ways that wealth perpetuates itself. We don't have to depend on it for our finances, we have a bank, the BoE which, as has been proven through various rounds of QE, can produce the money we need at no cost to the country. Unfortunately we also have a tax system which overwhelmingly favours the wealthy, enabling them to speculate with their extra money in the secondary bond market (which is the market which is feared) to amass more wealth.

richardjmurphy.substack.com/p/richard-murphys-views-on-government

Murphy is not the only economist saying this...

The only way for MMT to work as it suggests it should is to change the rules under which the U.K. government has to work. At present Reeves has no legal choice. It would be an interesting if not brave experiment, as we would certainly be ploughing our own furrow in a world field of neo-liberalism.

I’m in the garden really (coffee) so hopefully I’ll pick this up later.

What do you mean by Reeves has no legal choice'?

The BoE belongs to the nation. Its independence is is constrained by law. It should be working for the good of the nation, not just the wealthy.

Did you read Murphy's piece?

We're away this weekend so chances to continue this are limited for me.

MaizieD

Whitewavemark2

So maizie are you simply going to lie back and think of England whilst all our assets are raped?

More or less, Yes.

I will continue to make my futile attempts on Gnet to show how the current economic orthodoxy is harming us and how the much despised MMT insights into the workings of a national economy could be harnessed to effect a change .

And I am thinking of changing my user name to Cassandra.

All those that are more or less going to simply lie back and think of England whilst all UK assets are raped are entitled to their view and position and most likely are not a poorer member oof society that is struggling and would like things to change and get a little bit easier for them on a day to day basis.

However there are many others that are not happy about this disparity, ever widening between the rich and the poor. Therefore we are much more likely to support a government that has wealth tax plans in its manifesto, as outlined by OP.

I'm not sure if you have alternative approach to wealth taxes MaizieD to stop this growing disparity.

You keep saying we have to "kick back against the market"
(which has frightening echos of Liz Truss and look how that worked out!) but don't actually say how or what a plan would look like as an alternative to wealth taxes.

LemonJam

You keep saying we have to "kick back against the market"
(which has frightening echos of Liz Truss and look how that worked out!) but don't actually say how or what a plan would look like as an alternative to wealth taxes.

Read the link to Murphy's substack that I gave Whitewave

Kicking back against the market has nothing to do with wealth taxes. It could be one way of reducing the accumulation of wealth because 'the market' is a secondary market. Its function is mainly speculation, just like the stock market. It doesn't fund government spending in any way, It was primarily the Bank of England announcing Quantitative tightening (i,e selling the QE bonds, quite unnecessarily) which did for Truss. Not 'the market'. The BoE's QT and Truss' budget between them would have flooded the secondary market, which terrified the speculators. Also, I understand, pension funds had a liquidity problem, so they needed to sell bonds. It was a perfect storm.

'Investors' are behaving completely irrationally. Stocks are well overpriced and the bubble will burst sooner or later. As forecast not only by heterodox economists but by the BoE and the FT. Those who have any money left when it bursts will be flying to buy bonds because they are guaranteed to get the face value of their bonds back on redemption. This is not some mad MMT 'theory. This is reality. The UK government has never reneged on bond redemption in 300+ years...

As it happens, I too know someone in the top 100.
They live and are domiciled in the UK and also apparently have no problem paying UK tax, but since I don’t live with them, I have no idea whether they moan about it. They’ve certainly never done so in our meet-ups.
They also give away a huge chunk of their wealth every year, but they also have a financial adviser.
They have no intention of emigrating.
How lucky they are, and how lucky we are to know people like that.

LemonJam

You keep saying we have to "kick back against the market"
(which has frightening echos of Liz Truss and look how that worked out!) but don't actually say how or what a plan would look like as an alternative to wealth taxes.

You can't buck the market Lamont found out about that, a government has to manage the economy property and live within its means, This has been Starmer s policy but his loony MPs won't support him, so far our creditors are supporting that policy, if that changes just watch them run for the hills.

We are borrowing too much so MMT is not relevant any increase will result in a fall in sterling and higher inflation. That doesn't mean we are broke as a country, we have other options

Increase GDP, desirable but difficult in the short term
Increase Taxation , an easy short term fix
Reduce spending, cut out benefits to those that dont need them

It must be the heat but… according to AI the Uk has 157 billionaires who hold £670 billion in assets.
The mansion tax from April 2028 will cost £380 million to set up and is expected to raise around £430 million annually.
Peanuts?