Wealth Tax - Is it time to try?

[WigstonWanderer]

The accumulation of wealth becomes dangerous to the rest of society once it allows super rich people to buy power. The super wealthy can game the system by buying politicians, controlling media, and litigating against any who stand in their way.

 

At this point there should be special internationally agreed rules that apply to cap their wealth and stop this from happening. Obviously there will always be tax havens that won’t enforce such rules, and these individuals may move their assets to such places, but they will still need to sell into markets that do cooperate, and their ownership of assets in cooperating nations can still be targeted.

 

At what point should such rules apply? I don’t personally know, but I’m surely there are academics who do. Maybe $100m?

 

Make no mistake, these are dangerous people and need to be reined in. Perhaps it’s already too late with narcissists like Musk and countless others like rogue elephants destroying our democracies.

 

My two pence worth.

Edited 18 August by WigstonWanderer

[Dahnsouff]

Quite so, this is why even Keynes, who was largely indifferent to capitalism, acknowledged that such a system could not operate without constraint or intervention. What we are seeing is what he termed laissez-faire capitalism and he foresaw serious problems in such a system.(due to the bad actors you describe)

[st albans fox]

6 hours ago, WigstonWanderer said:

The accumulation of wealth becomes dangerous to the rest of society once it allows super rich people to buy power. The super wealthy can game the system by buying politicians, controlling media, and litigating against any who stand in their way.

 

At this point there should be special internationally agreed rules that apply to cap their wealth and stop this from happening. Obviously there will always be tax havens that won’t enforce such rules, and these individuals may move their assets to such places, but they will still need to sell into markets that do cooperate, and their ownership of assets in cooperating nations can still be targeted.

 

At what point should such rules apply? I don’t personally know, but I’m surely there are academics who do. Maybe $100m?

 

Make no mistake, these are dangerous people and need to be reined in. Perhaps it’s already too late with narcissists like Musk and countless others like rogue elephants destroying our democracies.

 

My two pence worth.

I don’t think you can stop someone from accumulating wealth - human nature and politics just wouldn’t make it practical.  You can make sure that they pay their way though.  I mean even if that forces them at the very least to be philanthropic (with govt oversight to avoid it being self serving). paying effective tax rates on the accumulated wealth would obviously be the best way but not sure that’s ever going to happen. 

[leicsmac]

3 minutes ago, st albans fox said:

I don’t think you can stop someone from accumulating wealth - human nature and politics just wouldn’t make it practical.  You can make sure that they pay their way though.  I mean even if that forces them at the very least to be philanthropic (with govt oversight to avoid it being self serving). paying effective tax rates on the accumulated wealth would obviously be the best way but not sure that’s ever going to happen. 

It's pretty empirically shown that material conditions dictate human nature, not the other way round.

[st albans fox]

14 minutes ago, leicsmac said:

It's pretty empirically shown that material conditions dictate human nature, not the other way round.

Yes - my point was that people’s response to big wealth makes controlling it impractical. 

[leicsmac]

15 minutes ago, st albans fox said:

Yes - my point was that people’s response to big wealth makes controlling it impractical. 

Yeah, thank you for clarifying, I see that you agree with the above now.

 

I think WW is onto something regarding the necessary solutions, though.

Edited 18 August by leicsmac

[st albans fox]

5 minutes ago, leicsmac said:

Yeah, thank you for clarifying, I see that you agree with the above now.

 

I think WW is onto something regarding the necessary solutions, though.

But it’s not practical imo - in the end the money will always win 

eg communism - those near the top or involved in the party aren’t subjected to the same rules as the masses. It’s just another form of capitalism (and one where any meritocracy doesn’t really exist).  Sadly, Human nature will always have its say.  
 

even on the kibbutz where it’s said that true equality exists, I’m sure there are a few decision makers who exploit their position. 

[leicsmac]

8 minutes ago, st albans fox said:

But it’s not practical imo - in the end the money will always win 

eg communism - those near the top or involved in the party aren’t subjected to the same rules as the masses. It’s just another form of capitalism (and one where any meritocracy doesn’t really exist).  Sadly, Human nature will always have its say.  
 

even on the kibbutz where it’s said that true equality exists, I’m sure there are a few decision makers who exploit their position. 

Which is where peer pressure (of a sort) has to come in to keep those exploitative individuals in check, either regulatory or otherwise.

 

It's entirely possible for such a system to exist - as long as enough people have "enough", they will be fine with necessary curbs on the people constantly wanting "more".

 

Edit: The middle part of the last century showed it can be done and showed how inequality shrank at least some, but now that gap is widening again - has done since the 1980's.

Edited 18 August by leicsmac

[Sly]

Unfortunately the super wealthy utilise that many loop holes for tax avoidance, that they’d just circumvent this as well. 

 

Also, what do you prescribe as wealthy, super wealthy etc ?  
 

If you look at the ONS survey done last year.

 

They considered property, assets, pensions and net financial position. 

 

Top 1% - Over £3.6m

Top 10% - Over £1.4m

Top 20% - Over £840k

Top 30% - Over £618k

Top 40% - Over £436k
Top 50% - Over £302k

 

I’ve come to the conclusion that the family with its XL Bully, Hot Tub, Land Rover, Louis Veeton Handbags and velvet tracksuits are at this stage, largely living on minimal disposable income. We’ve always had keeping up with the Jones and I know you joke about that stereotype, I think one of the more serious concerns we have, as that people aspire to live beyond their means. So much credit has been touted around, that people must be up to their eyes balls in debt. 

 

The wealthiest demographic I’d imagine will largely be the 55 - 70 (Gen C), as they were able to acquire property at the right time and it’s now sky rocketed. They’d have lived through an age where money was tighter, so have saved and made more modest purchases. This may be a bit stereotypical, however I think it’s a generational thing. 
 

Baby Boomers would have struggled.

 

Millennials might have got lucky if they purchased early enough! 

 

Edited 18 August by Sly

[Dahnsouff]

12 hours ago, Sly said:

Unfortunately the super wealthy utilise that many loop holes for tax avoidance, that they’d just circumvent this as well. 

 

Also, what do you prescribe as wealthy, super wealthy etc ?  
 

If you look at the ONS survey done last year.

 

They considered property, assets, pensions and net financial position. 

 

Top 1% - Over £3.6m

Top 10% - Over £1.4m

Top 20% - Over £840k

Top 30% - Over £618k

Top 40% - Over £436k
Top 50% - Over £302k

 

I’ve come to the conclusion that the family with its XL Bully, Hot Tub, Land Rover, Louis Veeton Handbags and velvet tracksuits are at this stage, largely living on minimal disposable income. We’ve always had keeping up with the Jones and I know you joke about that stereotype, I think one of the more serious concerns we have, as that people aspire to live beyond their means. So much credit has been touted around, that people must be up to their eyes balls in debt. 

 

The wealthiest demographic I’d imagine will largely be the 55 - 70 (Gen C), as they were able to acquire property at the right time and it’s now sky rocketed. They’d have lived through an age where money was tighter, so have saved and made more modest purchases. This may be a bit stereotypical, however I think it’s a generational thing. 
 

Baby Boomers would have struggled.

 

Millennials might have got lucky if they purchased early enough! 

 

All this is true, but it proliferates inactivity and I am unconvinced how much longer we can be ostrich's on this topic or rather the ramifications of doing nothing.

I do agree that a wealth tax is fraught with complexities and that closing the loop holes or perhaps more controversially, directing how and when taxes of this sort are gathered, is a massive headache but still think its one we have bear.

[Trav Le Bleu]

On 18/08/2024 at 02:07, WigstonWanderer said:

The accumulation of wealth becomes dangerous to the rest of society once it allows super rich people to buy power. The super wealthy can game the system by buying politicians, controlling media, and litigating against any who stand in their way.

 

At this point there should be special internationally agreed rules that apply to cap their wealth and stop this from happening. Obviously there will always be tax havens that won’t enforce such rules, and these individuals may move their assets to such places, but they will still need to sell into markets that do cooperate, and their ownership of assets in cooperating nations can still be targeted.

 

At what point should such rules apply? I don’t personally know, but I’m surely there are academics who do. Maybe $100m?

 

Make no mistake, these are dangerous people and need to be reined in. Perhaps it’s already too late with narcissists like Musk and countless others like rogue elephants destroying our democracies.

 

My two pence worth.

Just did a quick (and therefore possibly inaccurate) search on Google.

 

UK military spending per year is approx £75 billion. For all the complaints that we don't spend enough on this, in Europe, it's only surpassed by Russia.

 

Elon Musk receives a salary of £77 billion per year from his companies.

 

Ergo, Musk (or elsewise) could fund a considerable standing army.

 

Could be another billionaire, I just went for the obvious one

[hejammy]

I always find this an interesting topic and most people join the bandwagon of "the richest must be taxed more"

 

So - 

 

The majority of public spending by the UK government goes on public health (£211.6 billion) and welfare (£208.8 billion). A significant portion also goes on interest payments for national debt (£128.4 billion), state pensions (£110 billion) and education (£105.5 billion).

Source: https://www.finder.com/uk/stocks-and-shares-isas/tax-statistics
 

Let's break these down, Public Health - it is a well known fact that generally speaking the "richer" you are the better your health - so traditionally the wealthy are a lower burden to the NHS, both because they are generally heathier but also some go down the privatised route which then takes away any burden to NHS spend. Welfare - this is fairly obvious - the "wealthy" do not burden this part of the spend. National debt - now this should be shared amongst everyone rightly so. State pensions - my view on this is that actually the wealthy probably have private pensions which they are more reliant on. Why not just scrap the state pension for those who have personal pensions. Education - again some of the wealthy tend to send their children to Independent schools, so again alleviating the tax burden they contribute to. 

 

So now research has shown that the top 10% of income taxpayers contribute around 60% of income tax. The top 50% of income taxpayers contribute the vast majority of income tax payments (90.5%).

 

So it begs the question - why should the "wealthier" contribute more tax? - I hear arguments like "but they are so rich they can" etc etc. 

 

If someone works hard their entire life to get to that "wealthy" bracket and another is happy to sit at home and not entertain the thought of hard work and lives of welfare, why is it fair that the 1st person has to fund the lifestyle of the 2nd - I know these are two extremes but you get my point. I understand that their are millions in between these 2 people. 

 

So let's take a look at the 2 biggest spends - health and welfare - one of the "easiest" ones to reduce is welfare, get more people into work, there are 1000s of jobs but a lot of people don't want to work (for various reasons, including them seeing the job as beneath them, not feeling like they will get paid enough, health reasons, etc etc) BUT the concept of needs must, have to be drilled into people. At the moment it's far to easy to say - sod it I won't work and live off welfare as it's "easier" and sometimes more lucrative. - this in a lot of occasions leads to unhealthy lifestyles and then further burdens the NHS. The government need to work on this. 

 

No offence intended by my post and I understand that there are people who really do need the welfare system to survive, but it's those "abusing" the ease of the welfare system which need to be looked at before we start asking for more and more tax from the wealthy. 

 

 

[leicsmac]

1 hour ago, hejammy said:

I always find this an interesting topic and most people join the bandwagon of "the richest must be taxed more"

 

So - 

 

The majority of public spending by the UK government goes on public health (£211.6 billion) and welfare (£208.8 billion). A significant portion also goes on interest payments for national debt (£128.4 billion), state pensions (£110 billion) and education (£105.5 billion).

Source: https://www.finder.com/uk/stocks-and-shares-isas/tax-statistics
 

Let's break these down, Public Health - it is a well known fact that generally speaking the "richer" you are the better your health - so traditionally the wealthy are a lower burden to the NHS, both because they are generally heathier but also some go down the privatised route which then takes away any burden to NHS spend. Welfare - this is fairly obvious - the "wealthy" do not burden this part of the spend. National debt - now this should be shared amongst everyone rightly so. State pensions - my view on this is that actually the wealthy probably have private pensions which they are more reliant on. Why not just scrap the state pension for those who have personal pensions. Education - again some of the wealthy tend to send their children to Independent schools, so again alleviating the tax burden they contribute to. 

 

So now research has shown that the top 10% of income taxpayers contribute around 60% of income tax. The top 50% of income taxpayers contribute the vast majority of income tax payments (90.5%).

 

So it begs the question - why should the "wealthier" contribute more tax? - I hear arguments like "but they are so rich they can" etc etc. 

 

If someone works hard their entire life to get to that "wealthy" bracket and another is happy to sit at home and not entertain the thought of hard work and lives of welfare, why is it fair that the 1st person has to fund the lifestyle of the 2nd - I know these are two extremes but you get my point. I understand that their are millions in between these 2 people. 

 

So let's take a look at the 2 biggest spends - health and welfare - one of the "easiest" ones to reduce is welfare, get more people into work, there are 1000s of jobs but a lot of people don't want to work (for various reasons, including them seeing the job as beneath them, not feeling like they will get paid enough, health reasons, etc etc) BUT the concept of needs must, have to be drilled into people. At the moment it's far to easy to say - sod it I won't work and live off welfare as it's "easier" and sometimes more lucrative. - this in a lot of occasions leads to unhealthy lifestyles and then further burdens the NHS. The government need to work on this. 

 

No offence intended by my post and I understand that there are people who really do need the welfare system to survive, but it's those "abusing" the ease of the welfare system which need to be looked at before we start asking for more and more tax from the wealthy. 

 

 

In an ideal system/ world based on a straight meritocracy and correlation between hard work and personal profit all or even most of the time, this argument would have a lot more merit.

 

Do we have a system like that, or indeed anything close to it?

Edited 19 August by leicsmac

[hejammy]

50 minutes ago, leicsmac said:

In an ideal system/ world based on a straight meritocracy and correlation between hard work and personal profit all or even most of the time, this argument would have a lot more merit.

 

Do we have a system like that, or indeed anything close to it?

Hard work both in an educational factor and a working environment does have merit. Otherwise what is the point. I understand, there are those who work hard but do not see the merit but they are few and far between, the merit isn't always extreme hard work = billionaire, but for those who work hard it most definitely means for the majority that they will not be in poverty or relying on welfare. 

Edited 19 August by hejammy

[leicsmac]

11 minutes ago, hejammy said:

Hard work both in an educational factor and a working environment does have merit. Otherwise what is the point. I understand, there are those who work hard but do not see the merit but they are few and far between, the merit isn't always extreme hard work = billionaire, but for those who work hard it most definitely means for the majority that they will not be in poverty or relying on welfare. 

The vast majority of Africa, Asia and Latin America would disagree with that sentiment.

 

I know this was being approached from a UK perspective only, but seeing as the overall topic is a worldwide issue (today, borders for money and work are far more porous), perhaps a worldwide sight is needed.

[hejammy]

7 minutes ago, leicsmac said:

The vast majority of Africa, Asia and Latin America would disagree with that sentiment.

 

I know this was being approached from a UK perspective only, but seeing as the overall topic is a worldwide issue (today, borders for money and work are far more porous), perhaps a worldwide sight is needed.

I agree with that if we are talking worldwide, however none of our tax (or a very negligible amount does) - so now if the welfare spend in the UK goes down perhaps our government can help those less fortunate in the 3rd world countries. My point is that some of those who benefit from the welfare system here should take a look at those countries you mentioned and realise what real poverty is and yet how hard some of those actually work. That is the real injustice, not the fact that the wealthy are not "taxed enough" in my opinion. (just on a side note I can almost bet my house on the fact that a very high percentage of donations to those countries and people come from the "wealthy", so again in my opinion trying to squeeze more from them when the system here is broken seems unjust)

[leicsmac]

3 minutes ago, hejammy said:

I agree with that if we are talking worldwide, however none of our tax (or a very negligible amount does) - so now if the welfare spend in the UK goes down perhaps our government can help those less fortunate in the 3rd world countries. My point is that some of those who benefit from the welfare system here should take a look at those countries you mentioned and realise what real poverty is and yet how hard some of those actually work. That is the real injustice, not the fact that the wealthy are not "taxed enough" in my opinion. (just on a side note I can almost bet my house on the fact that a very high percentage of donations to those countries and people come from the "wealthy", so again in my opinion trying to squeeze more from them when the system here is broken seems unjust)

Better to not play too fast and loose with the safety net that guards people from "real poverty" and inequality and laissez-faire go hand in hand on this matter in my own opinion, but fair enough.

[hejammy]

3 minutes ago, leicsmac said:

Better to not play too fast and loose with the safety net that guards people from "real poverty" and inequality and laissez-faire go hand in hand on this matter in my own opinion, but fair enough.

However we voice our opinion on this forum doesn't really matter in the grand scheme of things anyways!  - honestly though the safety net for most doesn't exist I feel. It's all a fabrication.

Edited 19 August by hejammy

[Trav Le Bleu]

17 minutes ago, leicsmac said:

The vast majority of Africa, Asia and Latin America would disagree with that sentiment.

 

I know this was being approached from a UK perspective only, but seeing as the overall topic is a worldwide issue (today, borders for money and work are far more porous), perhaps a worldwide sight is needed.

Many people work very hard and receive little reward for their effort.

 

As I've often said, we pride ourselves that we don't have slavery in this country, but the reason for that (to some extent at least) is we don't need slaves when stuff can be made cheaply in sweatshops abroad.

 

So the next time you (impersonal-plural) buy something for half the price from Cambodia, just look on it as E-slavery.

 

Every click of the mouse is a crack of the whip.

[Greg2607]

Here's an idea....maybe the UK Could increase it's tax take, by actually making a difference to people's salary..... 

 

Want to guess the growth of the AVERAGE UK wage between 2010 -2022????  20%? 15% 10%??

 

It's 0.1% so essentially nothing

 

EVERYTHING in that time has become more expensive but our tax take is going to broadly similar UNLESS.... Population grows.... Might give you an idea why we've relaxed migration so much.

[hejammy]

I am just not sure how this is possible, if you look at the increase in minimum wage since 2010 it's gone from £6 an hour to £11.44 (more than double) - so the only theory is that those who were on minimum wage have had their pay increase at a much higher percentage than those on higher wages and quite possibly those on higher wages have seen a decrease in percentage terms. So on your point with immigration is really not applicable either.

 

 

 

17 hours ago, Greg2607 said:

Here's an idea....maybe the UK Could increase it's tax take, by actually making a difference to people's salary..... 

 

Want to guess the growth of the AVERAGE UK wage between 2010 -2022????  20%? 15% 10%??

 

It's 0.1% so essentially nothing

 

EVERYTHING in that time has become more expensive but our tax take is going to broadly similar UNLESS.... Population grows.... Might give you an idea why we've relaxed migration so much.

 

[Greg2607]

1 hour ago, hejammy said:

I am just not sure how this is possible, if you look at the increase in minimum wage since 2010 it's gone from £6 an hour to £11.44 (more than double) - so the only theory is that those who were on minimum wage have had their pay increase at a much higher percentage than those on higher wages and quite possibly those on higher wages have seen a decrease in percentage terms. So on your point with immigration is really not applicable either.

 

 

 

 

You are making assumptions that everyone's wages are linear here for a start.  Over a 12 year period, there will be lots of people who have been made redundant and struggled to find a role at the same salary again. 

 

lots of people also now on things like zero hours contracts, so have variable incomes versus a salary and childcare has become so expensive that lots of people do part time work, reducing average income as well. 

 

I absolutely do see it across many job families.   Businesses paying the same salary for a role that they were 5 or 10 years ago.  

 

[hejammy]

3 hours ago, Greg2607 said:

You are making assumptions that everyone's wages are linear here for a start.  Over a 12 year period, there will be lots of people who have been made redundant and struggled to find a role at the same salary again. 

 

lots of people also now on things like zero hours contracts, so have variable incomes versus a salary and childcare has become so expensive that lots of people do part time work, reducing average income as well. 

 

I absolutely do see it across many job families.   Businesses paying the same salary for a role that they were 5 or 10 years ago.  

 

My point is this, if someone is on minimum wage (let's for a minute assume that the majority of people who are struggling with the cost of living etc are on minimum wage or close to it) how can that business be paying the same salary as 5 or 10 years ago. National minimum wage has gone up considerably. 

[Robo61]

2 hours ago, hejammy said:

My point is this, if someone is on minimum wage (let's for a minute assume that the majority of people who are struggling with the cost of living etc are on minimum wage or close to it) how can that business be paying the same salary as 5 or 10 years ago. National minimum wage has gone up considerably. 

The Chart shows the average salary increase on a constant price basis i.e. after inflation is taken into account. 

 

You can debate how that figure is made up but what we should be asking is why it is so lagging so far behind other simlar economies.

[Daggers]

On 19/08/2024 at 12:22, hejammy said:

 

If someone works hard their entire life to get to that "wealthy" bracket and another is happy to sit at home and not entertain the thought of hard work 

 

 people don't want to work (for various reasons, including them seeing the job as beneath them, 

 

it's far to easy to say - sod it I won't work and live off welfare as it's "easier" and sometimes more lucrative. -

 

 it's those "abusing" the ease of the welfare system which need to be looked at before we start asking for more and more tax from the wealthy. 

 

 

You're building an entire approach on exceptional extremes that are wholly unrepresentative of the vast majority of circumstances. This isn't a fair point to start from.