Interview with the economist billionaires fear: this is how we get a wealth tax

The Nordic countries have small populations and are exploiting natural resources on a large scale, have low borrowings and a budget surplus. Norway in particular has a large surplus that it invests for the future as well as being a very high tax nation

The only way that a nation can successfully run with a budget surplus is if it is a result of a positive balance of trade; i.e if the country 'earns' more from its exports than it spends on its imports. If it has a negative trade balance it only achieves a budget surplus by spending less of its internal revenue than it receives.

The budget 'deficit' caused by government spending in excess of its receipts represents money held by its citizens and its private sector. Without this money being available to circulate in the economy for consumer spending and company investment there could be a recession. the only way recession can be avoided/deferred is through private borrowing. But even that can fail in the end, as the Global financial Crisis demonstrated.

Reducing 'the deficit' is not 'good housekeeping', it is economic madness.

The relevance of this to excessive wealth may seem a bit tenuous, but the relentless upward flow of money to the already wealthy which the current 'orthodox' economic model produces not only leads to increasing impoverishment in the lower percentiles but also to a surge in private debt as people borrow to cover basic living costs.

The UK definitely needs to do something different.

Burnham features on many front pages of newspapers today blasting back against Blair's recent statement. Making clear his view that "40 years of neoliberalism has not worked and Thatcherite policies have failed Britain and left main stream politics close to collapse".

I await the Makerfield by election results with interest....

LemonJam

The UK definitely needs to do something different.

Burnham features on many front pages of newspapers today blasting back against Blair's recent statement. Making clear his view that "40 years of neoliberalism has not worked and Thatcherite policies have failed Britain and left main stream politics close to collapse".

I await the Makerfield by election results with interest....

Well, if he can do it I'll be overcome with admiration because he'll do it in the face of the media, the Right and the Treasury!

Although it doesn't touch on excessive wealth (so deviating from our topic) Simon Wren Lewis's blog post from 19th May, while it doesn't go back 40 years, looks at the post GFC period and has a lot to say about the effect of the media and the Right (including the Labour Right) on the direction that UK economic policy has taken.

I don't always agree with him but I think much of it looks spot on.

Interesting analysis because he reckons that a significant number of voters are all for a change of direction.

mainlymacro.blogspot.com/2026/05/

(you may have to scroll down to find it. That's if you're interested, of course)

"The budget 'deficit' caused by government spending in excess of its receipts represents money held by its citizens and its private sector. Without this money being available to circulate in the economy for consumer spending and company investment there could be a recession. the only way recession can be avoided/deferred is through private borrowing."

A budget deficit means that the government has to borrow money and pay interest, currently the UK pays £100bn a year to do that.

If the money being flowing out of circulation was held within the UK it might be acceptable but it's not, it's flowing out of the UK into the coffers of the large multinationals. Reeves has taken some action to restrict cash hoarding, much more does need to be done so that UK growth can benefit.
Of course all that is useless unless the productivity of the UK doesnt improve

MaizieD

^I look at some of the Nordic countries and how they balance some aspects of the capitalist , market based economy and pairs that with strong labour unions, robust welfare systems and progressive taxation, with good public services. That would be my preferred direction of travel.^

You’re describing a model very close, if not identical, to the model Thatcher abandoned in the 1980s. It was a good model which was working.

Do you recognise that the Thatcher model, which we continue to follow is essentially very different from it?

Without going into detail at the moment I think that many of the challenges you listed earlier could be just as well, if not better, dealt with by the pre Thatcher Keynesian model.

LemonJam accurately describes the Nordic model, which combines market-based capitalism with strong labor unions, comprehensive welfare systems, progressive taxation, and high-quality public services. This approach is widely recognized as a successful social-democratic model.

However, MaizieD's claim that the Nordic countries' approach is very close or identical to the model associated with Margaret Thatcher is incorrect. Thatcher's policies in the UK (1979–1990) marked a shift away from the post-war Keynesian consensus, emphasising deregulation, privatisation, and reduced influence of unions. These policies differ significantly from the Nordic social-democratic model. While some Nordic countries have implemented market reforms over time, they continue to maintain extensive welfare states, which are not characteristic of Thatcher-era policies. Therefore, the assertion that the Nordic model and Thatcher's policies are closely aligned is historically inaccurate.

However, MaizieD's claim that the Nordic countries' approach is very close or identical to the model associated with Margaret Thatcher is incorrect.

I think you need to reread my post carefully, DAR, because that is absolutely NOT what I claimed.

I did exactly that before I wrote my post Maizie. I was very suprised with the view you put forward so, I copied what LemonJam and what you wrote over to an AI and simply asked what it thought of them factually. It's answer agreed with how I had read it. If that's not what you meant then perhaps you could have a second run at it?

DaisyAnneReturns

I did exactly that before I wrote my post Maizie. I was very suprised with the view you put forward so, I copied what LemonJam and what you wrote over to an AI and simply asked what it thought of them factually. It's answer agreed with how I had read it. If that's not what you meant then perhaps you could have a second run at it?

It just shows that AI isn’t the be all and end all.

What is so very difficulty to understand about

You’re describing a model very close, if not identical, to the model Thatcher abandoned in the 1980s. ?

Nordic states are not a good comparison, small population and an export surplus, they have invested far more in growth of course they have a better state support system.

Forget Norway they are way in front for all the reasons we know, look at Denmark they are far more productive as nation

Denmark pop 6m GDP per capital $88,000
UK pop 70m GDP per capital $68,000

The Danes have a much more productive economy

David49

Nordic states are not a good comparison, small population and an export surplus, they have invested far more in growth of course they have a better state support system.

Do you never stop to consider that a state support system puts money into circulation in the economy? That the money it puts into the economy contributes to growth? That the money it puts into the system contributes to the tax yield?

I doubt very much that even in the Nordic systems the state recoups all the money put into state support. It defies logic to assume that it does.

The only cost free money that citizens have is the money which comprises the deficit between what the state puts into the economy and what it takes out by way of taxation. Without that cost free money citizens would have to rely on private credit, with its associated cost in interest and the money supply would rapidly diminish.

Of course all state supports contributes to GDP but still leaves a deficit it cannot return all of its cost because drugs supplies and overheads have to be paid as well as wages.

The fact remains that Nordic countries have more efficient economies and much lower borrowings

Do the very rich use a lot of offshore accounts to avoid paying tax? I know that used to happen a lot, don’t know if they can still do this.

MaizieD

DaisyAnneReturns

I did exactly that before I wrote my post Maizie. I was very suprised with the view you put forward so, I copied what LemonJam and what you wrote over to an AI and simply asked what it thought of them factually. It's answer agreed with how I had read it. If that's not what you meant then perhaps you could have a second run at it?

It just shows that AI isn’t the be all and end all.

What is so very difficulty to understand about

You’re describing a model very close, if not identical, to the model Thatcher abandoned in the 1980s. ?

Critical, probably intended to be sarcastic with an element of frustration or impatience - why would I want to try and have that conversation Maizie?

nanna8

Do the very rich use a lot of offshore accounts to avoid paying tax? I know that used to happen a lot, don’t know if they can still do this.

Yes they do. So a shell/off shore company is set which accumulates an individuals wealth. There will certainly be more than one of these. The billionaire will draw down money from this company in the form of a “loan” - in practice no interest is charged and eventually the “debt” is written off.

Do you remember Rees Mogg - I think he had a “loan” of 12 million from a shell company that he had set up.

British Revenue have long considered this an “illegal” tax avoidance, but despite a couple of tries have yet to deal with this successfully. But now that the banks are exchanging information etc, I have no doubt they are working on it.

DaisyAnneReturns

MaizieD

DaisyAnneReturns

I did exactly that before I wrote my post Maizie. I was very suprised with the view you put forward so, I copied what LemonJam and what you wrote over to an AI and simply asked what it thought of them factually. It's answer agreed with how I had read it. If that's not what you meant then perhaps you could have a second run at it?

It just shows that AI isn’t the be all and end all.

What is so very difficulty to understand about

You’re describing a model very close, if not identical, to the model Thatcher abandoned in the 1980s. ?

Critical, probably intended to be sarcastic with an element of frustration or impatience - why would I want to try and have that conversation Maizie?

I don't particularly want a conversation, DAR.

You said that I had made an incorrect statement.

I said that I hadn't.

Neither you or AI appear to be able to comprehend English so I reposted my original sentence which completely disproves your assertion.

That is the end as far as I am concerned.

nanna8

Do the very rich use a lot of offshore accounts to avoid paying tax? I know that used to happen a lot, don’t know if they can still do this.

I think that is getting more difficult for them now, but the fact remains that they are in a position to pay people to manage their wealth in a way that enables them to pay minimal tax. Which usually turns out to be a far smaller percentage of their total income than the percentage paid by ordinary people whose tax is mainly collected through PAYE, which they cannot avoid and through indirect taxation (VAT) on the goods and services they purchase; gain, they cannot avoid this,

Gosh that is an interesting concept

“Encouraging the billionaires to use their wealth for the public good”

And

“Preventing accumulation in the first place”

MaizieD

DaisyAnneReturns

MaizieD

DaisyAnneReturns

I did exactly that before I wrote my post Maizie. I was very suprised with the view you put forward so, I copied what LemonJam and what you wrote over to an AI and simply asked what it thought of them factually. It's answer agreed with how I had read it. If that's not what you meant then perhaps you could have a second run at it?

It just shows that AI isn’t the be all and end all.

What is so very difficulty to understand about

You’re describing a model very close, if not identical, to the model Thatcher abandoned in the 1980s. ?

Critical, probably intended to be sarcastic with an element of frustration or impatience - why would I want to try and have that conversation Maizie?

I don't particularly want a conversation, DAR.

You said that I had made an incorrect statement.

I said that I hadn't.

Neither you or AI appear to be able to comprehend English so I reposted my original sentence which completely disproves your assertion.

That is the end as far as I am concerned.

You could have said that in a straight forward manner, pointing out the error. I could have then apologised. It's not a problem.

DaisyAnneReturns

MaizieD

DaisyAnneReturns

I did exactly that before I wrote my post Maizie. I was very suprised with the view you put forward so, I copied what LemonJam and what you wrote over to an AI and simply asked what it thought of them factually. It's answer agreed with how I had read it. If that's not what you meant then perhaps you could have a second run at it?

It just shows that AI isn’t the be all and end all.

What is so very difficulty to understand about

You’re describing a model very close, if not identical, to the model Thatcher abandoned in the 1980s. ?

Critical, probably intended to be sarcastic with an element of frustration or impatience - why would I want to try and have that conversation Maizie?

I feel I'd like to add that I also feel some of MaizieD's comments towards my posts are either sarcastic, impatient or condescending or perhaps a combination of all three - as she infers in her posts that she has a superior understanding of what I am posting about. Such an approach stifles debate. I sometimes reflect whether it is worth posting on economic matters as such threads increasingly become dominated between MaizieD and David49, with other posters seemingly batted away. I could be wrong but that's how it comes across on occasion. For example, I understand the Thatcher model is different from the economic comments I have put forward on this thread, in context of Burnham's recent comments. Yet MaizieD feels the need to condescendingly question me. Here is an example on this thread:

MaizieD: 28/5 “I don't think you understand how all embracing and widely implemented the neoliberal, free market, small state ideology was (and still is). Brown did what was accepted economic 'truth' at the time. It was what was taught for economic degrees and what was needed to obtain employment as an economist. 

Even now it is the widely accepted model for running an economy. Brown cannot be blamed for following it. He wasn't even an economist, he had a degree in history”.

David49: “As you say it's still the economic model today and still it doesn't work so why are we slaves to it.”

Lemondrop: "There's no guarantee an alternative economic model would fare any better? That is, what economic model would fare better in the face of the same constraints, that have grown even more post Brexit as well as ever changing geopolitical forces…..Not all of the above risks and forces are entirely as a result of a Neoliberalism. But on the other hand alternative economic models may be better- Foundational Economy? A Wellbeing Economy?"

David49: "Excuses, excuses, excuses",

Lemondrop: Excuses no- the constraints and geo political forces exist. …..

*I’m with DAR that a wealth tax is a good first step to dealing with some of our issues in the UK- and closing the massive disparity gap between taxes on wealth and taxes on work*. I support strategic state intervention. I don't support the long years of austerity we have endured or the decimation of our public services and thats what needs to change. 

I look at some of the Nordic countries and how they balance some aspects of the capitalist, market based economy and pairs that with strong labour unions, robust welfare systems and progressive taxation, with good public services. That would be my preferred direction of travel.

MazieD “Do you recognise that the Thatcher model, which we continue to follow is essentially very different from it?”

Sorry, LemonJam why are you quoting this? Are you supporting me or backing up DAR?

MazieD “Do you recognise that the Thatcher model, which we continue to follow is essentially very different from it?”

The comparison was with the Nordic model, which is completely different from the Thatcher model.

MaizieD

Sorry, LemonJam why are you quoting this? Are you supporting me or backing up DAR?

MazieD “Do you recognise that the Thatcher model, which we continue to follow is essentially very different from it?”

The comparison was with the Nordic model, which is completely different from the Thatcher model.

I repeat the reason for my pos again:

"I feel I'd like to add that I also feel some of MaizieD's comments towards my posts are either sarcastic, impatient or condescending or perhaps a combination of all three - as she infers in her posts that she has a superior understanding of what I am posting about. Such an approach stifles debate. I sometimes reflect whether it is worth posting on economic matters as such threads increasingly become dominated between MaizieD and David49, with other posters seemingly batted away. I could be wrong but that's how it comes across on occasion. For example, I understand the Thatcher model is different from the economic comments I have put forward on this thread, in context of Burnham's recent comments. Yet MaizieD feels the need to condescendingly question me. Here is an example on this thread".....

If I might add my two-pennorth worth.

I think that although many posters might not say so, some will have degrees in economics or other related subjects which involved a reasonable understanding of economics - so many on threads such as these will have a good working knowledge of the different economic theories, how they have affected society and how they have brought changes over time, and more importantly how they will affect the future.

I think this should be accepted as read.

So could I make a request for less assumption about a persons knowledge or lack of, and taking each post at its face value and not try to second guess a persons knowledge of the subject.

If that makes sense?

Lemon jam

The core problem is that for 50 yrs governments have not invested in increasing growth or infrastructure, their economic gains has almost all been given away in social enhancement to gain more votes in elections.

It's a problem all democracies face the need to win an election is first and foremost on all polititians agenda. Whether is more benefits or lower taxes there simply hasn't been money for growth, we are now at a stage where we are hopelessly behind on all modern technology.

Even today borrowing to increase real productivity in the economy is fine in my book, I have little confidence that it will be done with a GE in 2 yrs time give aways to voters will again get get priority.

Whitewavemark2

If I might add my two-pennorth worth.

I think that although many posters might not say so, some will have degrees in economics or other related subjects which involved a reasonable understanding of economics - so many on threads such as these will have a good working knowledge of the different economic theories, how they have affected society and how they have brought changes over time, and more importantly how they will affect the future.

I think this should be accepted as read.

So could I make a request for less assumption about a persons knowledge or lack of, and taking each post at its face value and not try to second guess a persons knowledge of the subject.

If that makes sense?

MaizieD what you are requesting of me is what I was requesting from you, so thank you. That is, I was highlighting that your questioning of my knowledge and posts does on occasion came across as condescending etc.

Fingers crossed it will now stop.

As an aside, I would doubt that there are any posters that have a degree in economics and politics and medicine and law, etc etc which cover some usual, topical core posts. Many posters have interests in those various topics and would like to post- but feel shut down when other posters respond in a dismissive way or have their knowledge questioned. You have no idea what qualifications or degrees at bachelor, masters or PHD level I may hold and that should not matter.

Further, all posters have experienced the impact of economic models on their daily lives over the years also, not just those that have degrees in economics.