Should we be more open to a wealth tax?

I suspect that for economists who have been studying this subject for 10s of years - it will all be a deal more complex than we realise.

This discussion has been had on GN multiple times.

Shares, gold, art works, properties and even jewellery along with other assets of the rich can down as well as up.

Are they going to fix a day every year and assets will be assessed for all?

This has more holes than your average colander, and would be unwieldy along with extremely expensive to implement in both time and money.

Plevey08

Rich incomes trickle down through structured philanthropy and Grants. Social enterprise, start up, microfinance institutions. Systemic change by financing grassroots. Policy research and economic systems...to name but a few MollyNew

That idea was blown out of the window years ago.

Tomas Piketty, amongst other economists I think talks about 2% on total wealth. The level at which this starts is not clear to me at present.

But when consideration is given to the current level, of total tax paid by the ultra wealthy, 2% seems very generous.

Rich incomes trickle down through structured philanthropy and Grants. Social enterprise, start up, microfinance institutions. Systemic change by financing grassroots. Policy research and economic systems...to name but a few MollyNew

Hmmmm. People are very happy to tax other people's money or cut other people's benefits. It's not a straightforward situation

The suggested wealth tax is a tax on assets (land, property, stocks etc.), NOT on income. Working people are already taxed up to their eyeballs on their income. A high earner doctor or TV presenter pays almost half of their salary in tax and NI contributions. While the super rich typically earn little income; instead they borrow against their assets, being able to have a lavish lifestyle while paying minimal income tax.

The wealth tax suggested in the video is 2% on assets over £10 million. According to estimates, 99% of the UK population owns less than £3 million, the median being a couple of hundred thousand (including their home and depending on age, region etc.) A wealth tax like this would apply to about 0.1% of the population.

I think it's a no-brainer that we have to start closing the loopholes and make the super wealthy pay their fair share. The only question is how it can be done.

Plevey08

That is so right Monica. I'm not at all rich but the fact is taxing the rich does not have the desired outcome which some might expect ie the poorer will be better off. The rich incomes trickle down to communities. You tax them big and they will leave which would not benefit this country.

In what way do "rich incomes trickle down to communities"?

If this were true, our roads would be well maintained and our schools and hospitals wouldn't be falling to pieces. The super rich make sure nothing "trickles down" by squirrelling most of their money away in offshore bank accounts so they can maintain their spot on the Sunday Times Rich List.

That is so right Monica. I'm not at all rich but the fact is taxing the rich does not have the desired outcome which some might expect ie the poorer will be better off. The rich incomes trickle down to communities. You tax them big and they will leave which would not benefit this country.

I am not prejudiced towards the wealthiest in society. However, I do object to a tiny minority accruing extreme wealth whilst many live on the breadline.

According to Oxfam, the combined wealth of the richest 56 people in the UK is more than the total wealth of the poorest 27 million (roughly 39% of the population). This cannot be good for society as a whole.

If the wealthiest rely on the poorest to work for them, clean for them, operate public services etc then they should pay more tax. They would not miss it and the poorest would have a better quality of life and be less reliant on benefits to top up their low salaries.

ordinarygirl

I'm open but my question is why are people encouraged to earn more money and buy bigger houses if it only to be taxed more?

I've never seen any campaigns encouraging people to do either of those things. It's what people want to do + peer pressure and there aren't any circumstances where you'll not be better off financially for earning more (except if benefits are involved).

I think a wealth tax is a good idea. Yes, the level would have to be set carefully, but as for most people that probably means 'as long as it's set a bit above my own circumstances', I'm not sure that it would ever be a vote winner .

I think it has to be far enough above average that it doesn't penalise ambition and it shouldn't be possible to opt out. I'm not sure what average wealth is, but maybe a tax should start at something like three times whatever it is, including investments, property, savings and pensions, and go up from there?

I wouldn't weight it to account for geographical house price differentials, as not doing so might contribute to the 'levelling up' that keeps being promised to areas outside of London and the SE. It should, probably, be weighted to take account of age, however, as older people are sure to (and need to) have more in savings and pensions than the young, and less (if any) ability to earn more.

It would be great if the Welfare bill could be cut, but the only way to do that would be to have strict rent controls, a realistic minimum wage and free, or heavily subsidised childcare. With those in place, people could be expected to support their families through work, and could do so with dignity.

If they are capable of work but then choose not to, that's up to them, but there is, IMO, no need for the rest of us to have to do so if everyone can afford to pay for housing and childcare. As things are, there is little incentive, as wages are so low, rents are so high and childcare so expensive that people can be better off on benefits than working.

Btw, I’d happily pay 1p in the £ extra on my own income, if everyone else pays theirs too!

MaizieD

I'm up for taxing wealth, but to think it's possible to tax the apparent wealth of the rich is a bit naive because the wealthy carefully distribute their wealth in assets (land and property) which it would be hard to value, in networks of companies in a way which make it difficult to identify just who ultimately benefits from the wealth, in trusts, in offshore accounts, in tax havens and in equities (stocks and shares) which continually vary in value. A prime example of the latter would be Elon Musk who was recently declared to be a trillionaire on the strength of the initial sale of shares in his company, but who is no longer a trillionaire because the share price dropped once trading them started.

All in all, it might cost so much to establish the amount to be taxed, and time, as lengthy appeals to the tax law would inevitably arise. The actual tax take could be quite underwhelming.

While some unhidden wealth could be taxed fairly easily it would be better to concentrate on a progressive tax regime which prevents them acquiring so much in the first place. It was done post WW2 and significantly caused progress to a more equitable distribution of wealth, progress which has, with the implementation of different economic policies, been almost reversed, we could usefully look to the post WW2 policies for ideas.

I appreciate that with the growth of the 'global economy' with foreign corporate bodies sucking so much wealth out of individual nations which they carefully arrange to be taxed in low tax jurisdictions, rather than in the jurisdiction where it is 'earned', this has added a level of complexity, but there is still much that could be done domestically.

Actually I completely agree. What I call, “on paper wealth” ie property and assets not easily “dissolved” is not quite the same as having £3m in the bank and a large annual (it’s all relative, but for me a large income would be anything over £200,000 before tax) sadly no where near that income when working ourselves haha. But I do believe that both individuals and companies should not hide behind tax loopholes, so why not tighten those first?

I absolutely believe that if everyone did pay their “correct” taxes we might not need “wealth tax”, but that is only my view.

Cou;d someone please define what they mean as wealthy. House worth over £500k? £1, million, £2 million? £5 million?

Income over £100k a year? £500k? £1 million?

You need to remember that 60% of income tax paid comes from the top 10% of income tax payers already. That is people earning excess and the top 1% of income tax payers account for 30% of tax revenue.

If you earn £67,500 a year you will be in the top 10%. Earn over £200,000 and you are in the top 1%.

There are 34.5 million tax payers in the UK. that means 345,000 in the top 1%, 3.45 million in the top 10%.

The amount of income to gained by adding 5% on income tax for the top1% will be an insignificant amount. You will probably raise far more income by putting 1p on income tax for everybody. If you think they should look at the top 10%, is an income of £67,500 really wealthy, and most of the top 10% earn less than £100,000.

The problem s that so much discussion on taxing the 'wealthy' is based purely on personal prejudice and grudge politics and entirely devoid of any facts or knowledge of the figures.

My figures come almost entirely from the following two government documents
commonslibrary.parliament.uk/research-briefings/cbp-8513/

www.gov.uk/government/statistics/income-tax-liabilities-statistics-tax-year-2022-to-2023-to-tax-year-2025-to-2026/bulletin-commentary

If people want to have a really informed discussion on taxing the 'wealthy' I suggest they read and thoroughly digest the contents of these documents or perhaps look at this Youtube video
www.youtube.com/watch?v=RNzSLQYyYao

I am offering no personal opinions on this subject, but if it is to be discussed it should be discussed fro knowledge not just prejudice. So let us reach an agreement as to what combination of income and capital makes someone wealthy. Will it vary depending on where you live? Property prices seem to be cheaper the further north you go, for example and housing costs eat more deeply into your income in the south.

Once we know and agree on the facts we will be able to have a reasoned discussion.

ordinarygirl

I'm open but my question is why are people encouraged to earn more money and buy bigger houses if it only to be taxed more?

I think most people would much prefer the opportunity to earn more and buy bigger properties even if they had to pay more tax. And we are talking wealth tax on those with many millions which percentage wise would not be punitive.
Have you watched the video?

I'm open but my question is why are people encouraged to earn more money and buy bigger houses if it only to be taxed more?

eazybee

No.
Cut the Welfare Bill.

Not sure that penalising those at the bottom of the pile whilst those at the top get richer would be the right way to go about it.

eazybee

No.
Cut the Welfare Bill.

Why? To “raise more money”

GrannyGravy13

Totally depends on the definition of wealth.

Absolutely!!

Yes to a wealth tax from me.

If 75% of millionaires say they think it's fair to pay more tax, why do many of them pay accountants to squirrel it away to reduce their tax liability? Surely fairness starts with not exploiting the loopholes...

Yes, yes, yes, to a wealth tax.

eazybee

No.
Cut the Welfare Bill.

What has wealth tax to do with welfare?

No.
Cut the Welfare Bill.

Richard Murphy explains this more succinctly than me.

Short video clip

www.youtube.com/watch?v=Iir0GP40_vw&t=2s