Cost of living crisis.

[Innovindil]

17 minutes ago, dsr-burnley said:

Link?

 

I don't know how many people have been asked if they were willing to remain Australian citizens if it would cost them a basic $50 million fee each year before other taxes were brought into account; but I reckon those that said that's fine, were lying.

Sounds like loads of money til you remember musky just lost close to 200billion dollars and it had exactly zero effect on his quality of life. 

 

Think people tend to forget when it's all just numbers, a billion is a lot. 

[grobyfox1990]

5 hours ago, dsr-burnley said:

You're assuming that the billionaires would be happy to pay 5% pf their wealth every year and wouldn't move abroad.  I think you'd find that the primary effect would be that there would no longer be any Australian billionaires, they'd all be American billionaires or Singaporean billionaires or billionaires who are citizens of anywhere but Australia.  Which of course would affect tax downwards, not upwards.

One of the biggest conjob assumptions going, 'there is nothing so mobile as a millionaire and his money' is proper claptrap. It stands up to absolutely no scrutiny. Yeh maybe if you're a 20 year crypto bro, but not in the real world. Billionaires largely reside where they made their fortunes because they've got those annoying things like families, schools  lives and businesses to run. The cost of moving all of your activities abroad will far outweigh Captain socialists de minims wealth tax that can probably be offset away anyway. The likes of Branson going to the BVI is a one off compared to the majority of billionaires who live where they were born or where they made their fortune....because that environment allowed them to make their fortune!! The Forbes list will show this. This is an interesting book on the topic as well - https://www.amazon.com/Myth-Millionaire-Tax-Flight-Inequality/dp/1503603806

 

You see it in the UK, the FS sector constantly screaming 'we will leave if you introduce the levy!!!!!' HSBC have been threatening to go back to Hong Kong forever, they didn't and they won't. At a time when the WEF risk report states the breakdown of social cohesion as a major global risk, having the 'powers' threatening to leave if they're forced to pay their fair share isn't a credible or serious top 20 threat, it's a very funny joke, because we all know they won't

 

[fox_up_north]

As above - I've met a few very, very well off people (likely in the millions). It's all well and good to think that they'd bugger off if we imposed a 70% tax on wealth over, say, £5 million.

 

But you've then got to convince their kids, their mates, their staff etc. If we're talking Elon Musk mentality, it's like asking him to move to Bermuda but he won't be able to just walk into his office, swing his weight around and "check" people are working.

[dsr-burnley]

1 hour ago, grobyfox1990 said:

One of the biggest conjob assumptions going, 'there is nothing so mobile as a millionaire and his money' is proper claptrap. It stands up to absolutely no scrutiny. Yeh maybe if you're a 20 year crypto bro, but not in the real world. Billionaires largely reside where they made their fortunes because they've got those annoying things like families, schools  lives and businesses to run. The cost of moving all of your activities abroad will far outweigh Captain socialists de minims wealth tax that can probably be offset away anyway. The likes of Branson going to the BVI is a one off compared to the majority of billionaires who live where they were born or where they made their fortune....because that environment allowed them to make their fortune!! The Forbes list will show this. This is an interesting book on the topic as well - https://www.amazon.com/Myth-Millionaire-Tax-Flight-Inequality/dp/1503603806

 

You see it in the UK, the FS sector constantly screaming 'we will leave if you introduce the levy!!!!!' HSBC have been threatening to go back to Hong Kong forever, they didn't and they won't. At a time when the WEF risk report states the breakdown of social cohesion as a major global risk, having the 'powers' threatening to leave if they're forced to pay their fair share isn't a credible or serious top 20 threat, it's a very funny joke, because we all know they won't

 

So if James Dyson was told that if he stayed in the UK and if Dyson plc stayed UK registered, unless he paid £1 billion per year, he would be forced to pay the £1 billion?  I think you'd be surprised.  He's already moved Dyson for a lot less than £1 billion saving.  And Jersey is not so very far away.

 

If you have that sort of money, you don't have to move your activities.  You just have to move the ownership of your activities.  They can't do a wealth tax on the assets of a foreign national whose companies are all registered abroad.  The Hinduja family are often quoted as Britain's richest family, but it isn't because they couldn't bear to leave their native country.

 

People do move, you know, often for quite a lot less than 5% of their capital.  Children change schools, people make new friends.  If a family will move to the other end of the country for a new job, then a billionaire will move to a different country to save tens and hundreds of millions of pounds.

[dsr-burnley]

31 minutes ago, fox_up_north said:

As above - I've met a few very, very well off people (likely in the millions). It's all well and good to think that they'd bugger off if we imposed a 70% tax on wealth over, say, £5 million.

 

But you've then got to convince their kids, their mates, their staff etc. If we're talking Elon Musk mentality, it's like asking him to move to Bermuda but he won't be able to just walk into his office, swing his weight around and "check" people are working.

If you take 70% of their capital, they won't have any staff.  And I think Elon Musk has quite good internet connections.

[nnfox]

I don't really get the whole wealth tax thing.  Surely it's unworkable?

 

If I was deemed to be worth £10 million and that carried a wealth tax levy of say £200k then an immediate problem I'd have would be getting hold of the extra £200k cash on top of my existing living expenses and tax liabilities.  Rich people are rich because they own assets, they don't sit on cash because cash sitting under a matress is guaranteed to lose value.  And if I did have £200k sitting under the matress, how would anyone know it was there to calculate my "wealth" in the first place? I'd have to sell some of my assets to get my hands on the cash.  If I make a gain on selling those assets, do I have to pay capital gains tax in addition to the wealth tax?  And who will buy my assets?  There's a very real danger that whoever purchases those assets would increase their tax liability, so it's hardly an attractive incentive.

[grobyfox1990]

16 minutes ago, dsr-burnley said:

So if James Dyson was told that if he stayed in the UK and if Dyson plc stayed UK registered, unless he paid £1 billion per year, he would be forced to pay the £1 billion?  I think you'd be surprised.  He's already moved Dyson for a lot less than £1 billion saving.  And Jersey is not so very far away.

 

If you have that sort of money, you don't have to move your activities.  You just have to move the ownership of your activities.  They can't do a wealth tax on the assets of a foreign national whose companies are all registered abroad.  The Hinduja family are often quoted as Britain's richest family, but it isn't because they couldn't bear to leave their native country.

 

People do move, you know, often for quite a lot less than 5% of their capital.  Children change schools, people make new friends.  If a family will move to the other end of the country for a new job, then a billionaire will move to a different country to save tens and hundreds of millions of pounds.

Jersey isn't that far away at all, I moved here two months ago!!!!! And the bloomin wind and unbelievable flash downpours make any tax efficiencies not worth it all. Joking obvs it is quite nice here.

 

There are of course one off examples like Dyson and the Hindujas I would guess moved to be in a friendlier legal environment rather than anything tax related. but that's not the trend. The research and evidence overwhelmingly proves this. It's not as easy as moving your HoldCo offshore and continuing your operations onshore as normal anymore, overwhelmingly if you market activities in a jurisdiction there will be liabilities, or costly to get out of those liabilities. 

[grobyfox1990]

5 minutes ago, nnfox said:

I don't really get the whole wealth tax thing.  Surely it's unworkable?

 

If I was deemed to be worth £10 million and that carried a wealth tax levy of say £200k then an immediate problem I'd have would be getting hold of the extra £200k cash on top of my existing living expenses and tax liabilities.  Rich people are rich because they own assets, they don't sit on cash because cash sitting under a matress is guaranteed to lose value.  And if I did have £200k sitting under the matress, how would anyone know it was there to calculate my "wealth" in the first place? I'd have to sell some of my assets to get my hands on the cash.  If I make a gain on selling those assets, do I have to pay capital gains tax in addition to the wealth tax?  And who will buy my assets?  There's a very real danger that whoever purchases those assets would increase their tax liability, so it's hardly an attractive incentive.

Well if you are not accurately declaring your wealth you are committing fraud and you've got bigger issues than a tax bill. You are right in that UHNW's are 'paper' rich but of course they have a source of liquidity to pay for things like tax bills and tables at park Chinois. Borrow against your assets, interest rate payable is cheaper than a prevailing tax rate from cash drawings.

[Zear0]

We all moving to Bosnia as they've got a lower tax rate then?

[fox_up_north]

1 hour ago, dsr-burnley said:

If you take 70% of their capital, they won't have any staff.  And I think Elon Musk has quite good internet connections.

I said their wealth. As in, everything you earn over £5 million per year, it's got a 70% tax. To put pure numbers on it.

 

Person A earns £8 million per year (let's pretend he's a footballer on £153k per week) 

 

Currently, he'd take home £4.22 (ish) million of that. You telling me he can't spare another million or so? Christ, other than buying an expensive house in Kensington, I don't think I'd be able to spend £4 million in my lifetime. 

[dsr-burnley]

2 hours ago, fox_up_north said:

I said their wealth. As in, everything you earn over £5 million per year, it's got a 70% tax. To put pure numbers on it.

 

Person A earns £8 million per year (let's pretend he's a footballer on £153k per week) 

 

Currently, he'd take home £4.22 (ish) million of that. You telling me he can't spare another million or so? Christ, other than buying an expensive house in Kensington, I don't think I'd be able to spend £4 million in my lifetime. 

That's income.  Wealth is the total of your assets, income is how much comes in.  

 

If you went to 70% tax on income, some would leave, others wouldn't.  When Denis Healey was Chancellor, the top rate was 98% and it was said that James Herriot was the only high earner left in the country; other successful authors, singers, international sports stars, went abroad for lower taxes.

 

A lot of us could afford to pay more taxes, and could choose to as well - but we don't.  Millionaires and billionaires are the same.

[leicsmac]

3 hours ago, dsr-burnley said:

That's income.  Wealth is the total of your assets, income is how much comes in.  

 

If you went to 70% tax on income, some would leave, others wouldn't.  When Denis Healey was Chancellor, the top rate was 98% and it was said that James Herriot was the only high earner left in the country; other successful authors, singers, international sports stars, went abroad for lower taxes.

 

A lot of us could afford to pay more taxes, and could choose to as well - but we don't.  Millionaires and billionaires are the same.

If what you're arguing here is true, and it could well be, then again it just makes the case for a global, unified taxation solution so that these people would have nowhere to run to - as unlikely as that may be to actually happen.

[ozleicester]

9 hours ago, dsr-burnley said:

Link?

 

I don't know how many people have been asked if they were willing to remain Australian citizens if it would cost them a basic $50 million fee each year before other taxes were brought into account; but I reckon those that said that's fine, were lying.

Bloomberg - https://www.bloomberg.com/news/articles/2016-06-29/when-do-taxes-cause-millionaires-to-move

Stamford - //efaidnbmnnnibpcajpcglclefindmkaj/https://inequality.stanford.edu/sites/default/files/media/_media/pdf/pathways/summer_2014/Pathways_Summer_2014_YoungVarner.pdf

https://www.sup.org/books/extra/?id=27987&i=Chapter 1.html

Forbes - https://www.forbes.com/sites/patrickwwatson/2018/05/10/high-taxes-dont-make-rich-people-move/

But yeh keep on with the lies misinformation, trickle down works, etc etc

[Jon the Hat]

4 hours ago, leicsmac said:

If what you're arguing here is true, and it could well be, then again it just makes the case for a global, unified taxation solution so that these people would have nowhere to run to - as unlikely as that may be to actually happen.

Countries use tax rates to make them more attractive to talent and business.  It would wrong imo to try to remove that capability, as long as it is genuine.  Even then your assumption is we want to tax people a lot more on their personal wealth.  I have no issue with someone who creates something brilliant, or who invests a lot at high risk gaining reward for that.  There should of course be restrictions (and there are) on being able to avoid tax by moving assets / income around at will.  I have also rather come around to the idea that windfall tax makes some sense when events completely outside your control create huge profits. What I do have a problem with is people not doing their research - eg when someone pointed out that Chevron paid little tax in Australia for 3 years - and some simple research showed that is becuase they are depreciating a huge investment, and will pay billions over the coming years.

[leicsmac]

14 minutes ago, Jon the Hat said:

Countries use tax rates to make them more attractive to talent and business.  It would wrong imo to try to remove that capability, as long as it is genuine.  Even then your assumption is we want to tax people a lot more on their personal wealth.  I have no issue with someone who creates something brilliant, or who invests a lot at high risk gaining reward for that.  There should of course be restrictions (and there are) on being able to avoid tax by moving assets / income around at will.  I have also rather come around to the idea that windfall tax makes some sense when events completely outside your control create huge profits. What I do have a problem with is people not doing their research - eg when someone pointed out that Chevron paid little tax in Australia for 3 years - and some simple research showed that is becuase they are depreciating a huge investment, and will pay billions over the coming years.

May I ask why? Out of some sense of stifling competition, or some other idea?

[Jon the Hat]

2 minutes ago, leicsmac said:

May I ask why? Out of some sense of stifling competition, or some other idea?

Mainly because some countries are seen by the markets as higher risk - sometimes for good reasons and sometimes not, and tax rates / incentives are one of the few ways countries can attract investment.  Same for talent - some countries have far better ability to develop their own talent, and if you fix tax rates, they cannot attract talent so easily internationally, which can limit their ability to develop their capability and economy.  If you want a closed shop where the rich and powerful countries are forever dominant, then fine, but if not then I would think very hard about trying to impose some kind of global tax regime.  Much like FFP or the Eurozone, it tends to help the rich much more than the poorer.

[leicsmac]

1 minute ago, Jon the Hat said:

Mainly because some countries are seen by the markets as higher risk - sometimes for good reasons and sometimes not, and tax rates / incentives are one of the few ways countries can attract investment.  Same for talent - some countries have far better ability to develop their own talent, and if you fix tax rates, they cannot attract talent so easily internationally, which can limit their ability to develop their capability and economy.  If you want a closed shop where the rich and powerful countries are forever dominant, then fine, but if not then I would think very hard about trying to impose some kind of global tax regime.  Much like FFP or the Eurozone, it tends to help the rich much more than the poorer.

Thanks. 

 

Personally, I see those risks and incentives coming back to the same root cause - inequality of life between these nations which leads to unrest. Addressing that inequality, of which global tax enforcement might be one part, would also remove or reduce those risks.

 

I can understand the argument from advocates of lasseiz-faire that such command based solutions end up stratifying such inequalities, but it's quite clear the present system where such things are "freer" does precious little for such inequality either. Not across a lot of the world and not fast enough, anyway.

[Jon the Hat]

Just now, leicsmac said:

Thanks. 

 

Personally, I see those risks and incentives coming back to the same root cause - inequality of life between these nations which leads to unrest. Addressing that inequality, of which global tax enforcement might be one part, would also remove or reduce those risks.

 

I can understand the argument from advocates of lasseiz-faire that such command based solutions end up stratifying such inequalities, but it's quite clear the present system where such things are "freer" does precious little for such inequality either. Not across a lot of the world and not fast enough, anyway.

It comes back to whether you think equality or improving quality of life is more important.  It is hard to argue against the fact that those worst off in the world are in countries which reject free market capitalism; North Korea, Myanmar, China.  If the price of most of us being way better off is the 1% being insanely rich (and then usually creating further wealth through investment, and giving away most of it in the end) then who cares?  Notwithstanding the need to look after those less fortunate with fair taxation.

[leicsmac]

1 hour ago, Jon the Hat said:

It comes back to whether you think equality or improving quality of life is more important.  It is hard to argue against the fact that those worst off in the world are in countries which reject free market capitalism; North Korea, Myanmar, China.  If the price of most of us being way better off is the 1% being insanely rich (and then usually creating further wealth through investment, and giving away most of it in the end) then who cares?  Notwithstanding the need to look after those less fortunate with fair taxation.

I think a fair few African countries and some other Asian nations where free markets are the norm would take issue with that fact.

 

The general standard of life worldwide increasing is dubious imo, so while I'd agree with the second part of this in principle I'm not sure it's happening in practice.

 

Put simply, I don't think the present system improves quality of life fast enough or well enough, so we disagree on its reach and "success" there which would be the fundamental reason to keep using it.

Edited 17 January 2023 by leicsmac

[Jon the Hat]

1 hour ago, leicsmac said:

I think a fair few African countries and some other Asian nations where free markets are the norm would take issue with that fact.

 

The general standard of life worldwide increasing is dubious imo, so while I'd agree with the second part of this in principle I'm not sure it's happening in practice.

 

Put simply, I don't think the present system improves quality of life fast enough or well enough, so we disagree on its reach and "success" there which would be the fundamental reason to keep using it.

Fair points and a lot of those countries you see government interference in the market, often very significant bribery and corruption.  We are finally starting to see the west punishing people for corruption which occurs overseas.  I never said capitalism was perfect, just better than everything else.  It needs structure around t of course.

[ozleicester]

2 hours ago, Jon the Hat said:

eg when someone pointed out that Chevron paid little tax in Australia for 3 years - and some simple research showed that is becuase they are depreciating a huge investment, and will pay billions over the coming years.

Perhaps if paye tax payers could claim depreciation on their expenses they wouldnt have an issue with corporations avoiding tax with this kind of back handed government subsidies.

Corporate socialism



 

Edited 17 January 2023 by ozleicester

[grobyfox1990]

6 hours ago, leicsmac said:

If what you're arguing here is true, and it could well be, then again it just makes the case for a global, unified taxation solution so that these people would have nowhere to run to - as unlikely as that may be to actually happen.

You can’t realistically have a global tax solution because each jurisdiction carries different threats and opportunities. A baseline tax rate with varying interest rates across the world is one example, arbitrage will still be possible

 

anyway what the conspiracy theorists get wrapped up in when ‘wealth tax!!!’ is mentioned is some belief that this means we want billionaires to hand over all their money. Incorrect. We want them to pay their fair share like the rest of us suckers do without using borrowing or carry profits etc etc 

 

 

[Jon the Hat]

12 minutes ago, ozleicester said:

Perhaps if paye tax payers could claim depreciation on their expenses they wouldnt have an issue with corporations avoiding tax with this kind of back handed government subsidies.

Corporate socialism

If you as an individual have significant expenses which relate to your income you can claim them against tax (very easy in AU).  Most PAYE employees have everything they need to work provided by their employer.

[ozleicester]

16 minutes ago, Jon the Hat said:

If you as an individual have significant expenses which relate to your income you can claim them against tax (very easy in AU).  Most PAYE employees have everything they need to work provided by their employer.

Chevron Funding Corporation in Delaware borrowed $US2.5 billion at an interest rate of between 1 and 2 per cent in 2003, lending the money to Chevron Australia, in Australian dollars, at a rate of between 8.8 per cent and 10.5 per cent.

The ATO argued those terms were not at arm’s length and alleged the arrangement generated excessive interest deductions, slashing the amount of tax Chevron owed in Australia.

Not sure individuals can do that.... or the other bazillion crooked practices...

just for interest sake...

Edited 17 January 2023 by ozleicester

[dsr-burnley]

8 hours ago, ozleicester said:

Bloomberg - https://www.bloomberg.com/news/articles/2016-06-29/when-do-taxes-cause-millionaires-to-move

Stamford - //efaidnbmnnnibpcajpcglclefindmkaj/https://inequality.stanford.edu/sites/default/files/media/_media/pdf/pathways/summer_2014/Pathways_Summer_2014_YoungVarner.pdf

https://www.sup.org/books/extra/?id=27987&i=Chapter 1.html

Forbes - https://www.forbes.com/sites/patrickwwatson/2018/05/10/high-taxes-dont-make-rich-people-move/

But yeh keep on with the lies misinformation, trickle down works, etc etc

You might be right, but of course there is a vast difference in scale.  For example, suppose someone has $100m in assets and $3m in income, all based in his home state of Oregon.  The "millionaire's rate" income tax of 11% means he pays about 5% extra on $2m of his income, or about $100,000, and the evidence says this isn't enough to make him move.

 

Can that be taken as definitive proof that a 5% wealth tax on all his assets, $5m per year, wouldn't make him move either?  I don't think it could.  It's far too much of an extrapolation.