Should we be more open to a wealth tax?

AB has talked this week of rejecting Thatcher’s “no such thing as society” and individualism, which has brought us to the poor level of care, health care, education we are seeing now.

When I read comments like “ I have saved for my health care, and see no reason to contribute towards society providing care for the most vulnerable and poor” I realise what an uphill battle we face. The exact same arguments were used when the NHS was proposed.

Farzanah

True MaizieD. The “household budget” analogy was employed with effect by Thatcher and has continued ever since.
Although false it means that the government can justify spending cuts, and manage public expectations.

The household budget is spending what you have, banks dont lend you money to feed the family, ( loan sharks might)

A government works like a business it can borrow or create money to meet whatever spending is needed if taxation does not produce enough revenue, it then has to repay borrowing with interest. It can NOT borrow/create unlimited money because lenders fear inflation and currency value losses, so increase interest rate.

At 100% of GDP we are already at that point, Burnham has already stated he aims to reduce the borrowing. If he can do that he reduces interest payments by £10 billion for each 10% reduction, a worthwhile aim. If he achieves a 10% reduction in lending while improving services it will be a major victory he can build on.

You notice lots of "Ifs" other PMs have ignored economic reality and spent too much and borrowing increased

David. As GDP is not a particularly accurate figure, some of it being completely made up, e.g A rental figure is calculated on houses in private ownership when no rental ever takes place, the figure of 100% of GDP is a bit meaningless.

'Borrowing' is not the right term to apply to government bond sales. It's the safest investment that any individual or institution can make, because the government will always pay the interest on its bonds and the principle if the bond owner wants their investment back. But most bondholders don't want the principle back Just ask the folks on the Premium Bond threads if they want the government to repay them the money they've invested in them!

The UK government has never, in 300 years, reneged on payment of interest or principle. There's no reason why it should, it can always create the money to pay it.

The 'yield' is an artefact of the secondary bond market, which is just a vehicle for speculation, the same as stocks and shares. The interest payable on a bond is different; the government pays only whatever interest it put on the bond when it sold it.

Any attempt to cut the 'debt' is pointless.

Of course, the government, instead of issuing bonds 'could' just run up a theoretical overdraft at the BoE, but convention and practice (and when we were in it, the EU) doesn't allow it.

When I read comments like “ I have saved for my health care, and see no reason to contribute towards society providing care for the most vulnerable and poor” I realise what an uphill battle we face. The exact same arguments were used when the NHS was proposed.

And when they go for their private treatment and it goes wrong it is the NHS which will pick up the pieces. Private hospitals don't have emergency facilities...

Yes, and the private doctors and nurses are trained by the NHS, too.

Maizie you know perfectly well that those who lend us money use GDP and borrowings at indicators of a nations creditworthiness. Whether we like it or not money created is counted as borrowings that is not going to change so there is no point mentioning it.

The UK is creditworthy but the currency has lost a great deal of value over the years, lenders don't want to be repaid in currency of a lower value, they loose money if that happens. Despite the uncertainty of a change of leader exchange rate has been remarkably stable, Burnham has been very careful not to give any reason for investors loose confidence in his future policy.

Banks and investors dont care about the comfort of the population, they just want their investment back plus interest, Truss made the fatal mistake of announcing plans that did not add up. Burnham will suffer the same fate if he does not "Balance the Books"

Sorry to be negative, but I think this is impossible. Rich people have entire buildings filled with accountants whose responsibility is to ensure that the rich person's money is not seen or touched by anyone snooping around and trying to find out.

Opening an offshore bank account or company is very easy to do and there are agents in these places that can help you do this inside 24 hours.

And the rich have stayed rich for hundreds of years. Nothing can really touch them.

I know this may not be a popular opinion, but I think once we are aware that this is a hard and fast truth we can then think about creating other ways to try to improve the world.

That is why, NathanaelWest, it is better to use taxation to prevent such a large accumulation of wealth than to attempt to tax it once it has accumulated.

MaizieD

That is why, NathanaelWest, it is better to use taxation to prevent such a large accumulation of wealth than to attempt to tax it once it has accumulated.

Agreed. But that would require an agreement with all nations around the world. There could always be one tiny little island that decides to turn their place into a tax haven in order to make money.