The issue isn't wealth tax.. it is tax.. there is a whole industry dedicated to assisting wealthy individuals hide their wealth... we need transparency laws as a starter. But primarily we need proper reform of the existing tax system which focuses on percentage tax takes across all earning/wealth bands... I am on PAYE as a nurse with no tax loopholes to exploit... I pay about 8% of gross pay tax per month... yet people I know who are self employed and earn substantially more pay next to no tax.. corporations pay less than 0.01% in many instances... fair, equitable and transparent tax laws are needed.
I'd like to see you Richard and Gary from Gary's economics have a discussion on tax and what to do, that would be a great video, great video's by the way
You yourself are ‘posturing’! Surely the answer lies with a combination of what you’ve suggested AND starting the process of reclaiming some of the vast infrastructure and property portfolios of the very wealthiest. We are on the same side - it’s not one or the other…
@@epicchess2021 He is not saying that. He is saying it will cost MORE to do it than it will raise because the hyper-wealthy will ABSOLUTELY ENSURE it does cost more in legal fees in order to get you to drop the scheme.
do the very wealthy tend to strenuously avoid selling their assets, opting instead to borrow against them in perpetuity ? (and writing off the interest paid)
Yes - which incidentally helps with the "how much is it worth" argument - oh, so you valued your Picasso painting at £10M when you used it as collateral for a loan, but now you're only valuing it at £10K on your tax return? Well isn't that interesting.
@@BittermanAndyThe wealth tax is ultimately based on net worth, or equity value, so if you have a painting that is worth $10 million and you use it as collateral to borrow $10 million against the painting's value, its valuation would technically be not even $10K, but in fact $0 as the loan would completely cancel out any value it had! On top of that, the interest paid on the loan could be used to offset income generated in the owner's other business ventures most likely.
@@stephfoxwell4620Agree completely. The problem in the UK is neither of the 2 establishment political parties that monopolise power is even interested in taxing wealth.
not 'difficult' per se, more 'highly impractical'...AND there are apparently far more effective ways of achieving the same , or better, desired result. So, why not choose those instead?
@@davegubbins4428 I don’t see what’s so difficult about implementing a higher rate of income tax for the highest paid employees. Even if some manage to avoid paying some of it, we’d get a return, especially if it was rigorously enforced. I’m certain any such proposal would be met with howls of derision from those that would be in the firing line. The poor things would be apoplectic telling us how hard up they’d be.
Isn’t the point that we should be taxing wealth more and less focus on salaries? Performance of high earners is directly linked to GDP whereas hoarders of wealth are a drag on the economy
Free market capitalism requires concentrated wealth for investment. Real wealthy people don't have gold or currency stacked up in their basements. If we take wealth from someone and then spend it to boost 'equality' there is a high chance that everybody suffers from the diversion of resources from investment that they would have made.
But taxation only exists to control inflation. You explained before that the government just prints money and taxation is just there to keep the lid on money supply. So if people decide to accumulate money and not spend it this will not fuel inflation. The problem since 2008 with QE is that by buying bonds the BoE pushed money into banks who used it on loans. This fuelled a house price inflation. Potentially we now have a bubble
Tax goods at a higher rate based on their cost. For example, VAT on a £15k car = 15%, VAT on a £70k car = 25% and a £200k car at 50%. Make people pay more tax based on what they are able to spend.
I’ve always thought that VAT should be reduced on everyday goods which the general public buy and increased on luxury goods eg yachts, Rolex watches, Ferraris.
Or a two tier vat band. 20% taxpayers pay 10% vat 40% taxpayers pay the full 20%? I mean if millionaire PM Rishy only pays 20% capital gains tax when in reality and fairness he should be paying 40% CGT....
How is it that those that have most of the nation's wealth get to NEGOTIATE with HM inspectors of taxes while the poorest in society get their taxes taken at source, before they even see their payments?
sadly, pure pragmatism. Their well-paid accountants are likely better than HMRCs at identfying loop holes/areas of interpretation in tax law and it saves the tax payer huge legal fees chasing them through the courts. Pretty damned horrible, but there it is.
I agree. My argument is. If we want a fair civil society then the same rules should apply across the board.. .. I understand wealthy peoples tax affairs are more complicated. But if we're having tax taken at Source then so should the wealthy. .. Perhaps as a flat tax ~10/15%. Were only a civil society because everyone abides by the laws of the land.. If people perceive an inherent unfairness this might or could lead to civil unrest or anarchy..
@@stuartd9741 Not exactly above the law - they still ave to comply. But when there is opportunity to interpret ambiguous wording on regulation, and you have the means to question poor wording, then there is opportunity for negotiation. Its basically tort law: i.e. access to redress proportional to the size of your wallet.
This is a pretty weak argument. The reason we struggle to determine wealth is because we have not invested in the state capacity to determine it. But minimum 30% capital gains on anything over 10mil. 2% tax on stocks and shares held. 50% tax on foreign owned properties bought above 5mil. 50% windfall tax on existing foreign owned properties above 10mil. Revenue tax for large corps. etc etc There's loads of things you can do
@@metallitech market gains in most instances have nothing to do with good decision making. The stock market is juiced up on massive tax payer transfers to asset holders - you'd simply be taxing that money back to the public who are currently subsidizing those gains. The only securities that shouldn't be taxed capital gains are SIPPs / pensions. You know what, let's do 90% tax on capital gains over 10mil. Why? Coz fk em, that's why.
Capital gains tax should definitely be teird to the size of the transaction. .. But any taxes designed or targeted at higher earners/wealthy, have to be palatable or proportionate to the asset or transaction being undertaken.. .. What I'm saying is. In order for the wealthy to be on board with paying more tax then, as one of your examples of 30% capital gains tax, this is proportional to the transaction being undertaken so may be more likely to be paid. ... If we ratchet taxes up too much then we'll get push back.. .. and the inevitable claims of an exodus form the city...🙄
@@stuartd9741 truly wealthy people don't pay tax. That's the entire point. But the average high income person who owns stocks is not going to move country because tax went up on stocks 5%. Just imagine that conversation with the missus: "the government have raised tax 5% on stocks so in order to avoid paying an extra 10k on my Bitcoin ETF, boomer stocks and meme stocks, we are leaving the country taking out kids out of the school they're settled in, selling our family home, saying goodbye to our lives, friends, family and career here and we're moving to a no tax jurisdiction like Saudi Arabia." *Wife files for divorce. This is pure scaremongering that people will move and not pay it. They will pay. There is no choice.
Surely additional tax on ownership of houses and land is relatively straightforward? (of course that is just a portion of "wealth" - but a portion that we should be glad to disincentivise). This should be compensated by a reduction in stamp duty which would have many positive effects.
Gary Stevenson is concerned about the growing wealth inequality in the UK and the economic damage that arises from that. He believes that it's a problem that needs to be addressed but I didn't think that he was an advocate for any specific measure. I was probably in favour of a wealth tax but Richard's argument makes sense. It needs a more in depth scrutiny. Something needs to be done.
Gary's main argument is that the problem is 2 fold. Firstly the political will to do "anything" need to be made and this can only be done by teaching people about the problem and then having them demand change. And then second "how" to solve the problem. Gary have several times mentioned that the "how" is less important atm. and that several solutions can work and that he generally am in favor of all of them. But before we can even start thinking about this part, we NEED people demanding change and therefore we need people to know of the problem.
@@lonevoiceRichard’s argument doesn’t make sense at all. It assumes it’s an either or when there could be both. It assumes we can’t increase transparency in finance, which frankly needs to happen to aid income tax generation. Also, it assumes that we can’t tax wealth on specific items initially, and then expand the system as transparency increases. It could be a 15 year plan, not a day one objective. I like Richard’s plan, but the system needs to be looked at holistically.
Set up people's tax courts, with normal people on the panel, and the authority to determine whether somebody is trying to avoid tax contrary to what the people want. Make it so the court does not have to consider the letter of the law, but the intention. The court could then determine that such things as hiving of IP to a tax haven then renting it out in another tax environment, was a fiddle and grab the money it reckons should have been paid. The example of a private company or a racehorse: tell the person that we are valuing it at £X, and they can keep the company/horse if they pay tax on that, otherwise we'll sell it and tax on their actual return. Put the onus on the wealthy to prove that they have paid a fair contribution to society, and to our adherence to the laws that protect their property, rather than on the taxman to prove otherwise.
I don’t see why we can’t do both, Richard. Given the wealthy are getting obscenely more wealthy and the gap between rich and poor is now at Grand Canyon level we clearly have a problem that is getting progressively worse. Why? Why can’t we reverse the trend? So we would have to employ an army of tax inspectors? Fine..! Let’s employ them. After all each “soldier” in this army would be earning us money. Let’s start with a few divisions and see what the results are, if they fight the good fight and reverse this sickening trend of haves and have nots, reinforce them with a few more. We *must*, at the very least, try to stop the rich dictating to us what they’re prepared to contribute.
I think you have heard Richard’s argument, but not listened to it. He is saying that it is totally impractical to tax existing wealth with this proposal; there are too many components, and too many ways that the wealthy will be able to obfuscate and dodge any definition or valuation of wealth. Unemployment in the UK is low, so where are you even going to find the ‘soldiers’ needed? He is not saying to do nothing, as many in the comments section seem to think.
@@phosferrax Not me, I’m not suggesting he said do nothing, I’m saying yes, do what he’s saying, but we shouldn’t write off the “traditional” ways to tax either. I’d like to see a more concerted and enthusiastic effort to even *start* taxing them more. As I say, perhaps not with an “army” right away - build up capacity, hopefully on the back of positive results (more tax gained) from the first cohort. Implement a higher rate of income tax, at the same time as ensuring loopholes are plugged and other ways to avoid are tackled rigorously. Of course I totally realise I’ve more chance of flapping my arms and flying to the moon to expect the Tories to even contemplate such actions, but the self-termed “People’s Party” could at least pretend to be interested.
Hi Richard. There are already very experienced colleagues working in the NHS as consultants and due to tax on their pension contributions are retiring earlier than they intended to avoid hefty taxes. So taxing income alone may just drive out valuable people from the economy and leave a big hole in staff. Due to lack of staff a lot of juniour doctors are working as locums as they know they can work flexible hours and get paid more due to lack of experienced staff. What can be done for this?
However would a land tax affect normal people when buying houses? .. Inevitably when the governments crack down on unpaid taxes they tend to enforce laws across the board rather than focusing on the single area that need reform...
@@stuartd9741 Not if set at a level to only affect the 3% of the population which own something like 70% of the land. They have done since William the Conqueror. See Duke of Westminster. 😊
It's absolutely right that captial gains should be equalised with income tax (including NI) but that serves a different function to wealth tax. The point of taxing wealth directly is not to raise funds for the government but to devalue the wealth itself. This will reduce inequality. Hhe fact that wealthy poople would hire lawyers and accountants in greater numbers and that the government would have to counter may be a waste of lobour resources, but where is the money coming from? The administration of the wealth tax becomes a distribution method for money raised, even if it never gets to the government because the wealthy are paying their service workers. The problems of valuation are severe though. Many assets, like art and horses would be a waste of time to value. They are not being used to extract rents from others anyway. We could target wealth taxes only at specific areas where an additional purpose exists. For example, a Georgist unimpreved land value tax could be levied in place of council tax (councils recieving a near flat rate of funding per capita to replace their revenue). This makes low density housing, empty housing and disused land more expensive to keep.
The reason the rich invest in art and such is because they can write the buying costs off of their taxes. So stop allowing any tax write offs and the problem is solved. If the tax law says that losses don't matter, then a large part of their bag of tricks doesn't work anymore.
For me, the main argument against taxes is that, for the amount I am taxed, above a threshold, I do not believe the government can make better decisions about how to spend my money than I can.
Well done that man. Fashion politics and twitter have addled so many people's brains it is refreshing to hear someone still capable of having a reasoned thought process. You just have to read some of the comments to see that there are people out there that don't actually care about making society better, they just want to say stuff that they think makes them sound good on social media. Sure the tax reforms you suggest aren't a cure all, but they would be a positive change.
I can see a lot of tax dispute lawyers making a mint, where the wealthy dispute the valuations HMRC might propose. There would need to be some legal framework in place to limit the legal back and forth. That would be a huge drain of HMRC resources. HMRC also seem to have a fair grasp on what artworks are worth, when they accept their display in the Tate Modern, in lieu of the owner paying tax.
In Switzerland, the tax tables have rates which change every CHF 1000 or so. It seems fairer to me than our rather limited levels of income tax and national insurance. Has anyone studied this in the peer-reviewed literature?
The government have started down the road to transparency regarding company ownership but they do love to drag things out and have failed to chase down refuseniks. However, let’s make a start with the Royal Family who are exempt from all taxes. We could probably pay off the national debt if they paid inheritance and capital gains taxes.
One of the driving reasons for some wealthy proponents of Brexit seems to be to be delaying this kind of transparency 🤷♂️. Sir Mogg, I’m looking at you…
There's no way a single family has enough money to pay off national debt, not even the royal family. And especially not if you're just taxing inheritance and capital gains.
Reform the voting system so that all our votes count and not just those that perpetuate this rotten system. As Galloway said "2 cheeks of the same a****".
I believe inheritance should be regarded as income beyond a fairly generous limit (as for the limit... say, enough to buy a modest standard family home, something in that area). Much like your argument for capital gains tax normalizing with income tax and national insurance. A single, simplified tax system, for all forms of income. And if there are going to be tax breaks, it would seem these should be given to those who make their income by their hard work- which is the ideal that every politician claims they uphold...
An excellent analysis and proposed solution of/to this appalling situation. A simplified and progressive tax regime would indeed be good. A lot of able people currently engaged in 'tax efficiency' could then find useful jobs to do.
Am I correct in saying that the basic difference as you see it is taxation on current assets versus taxation on transaction of those assets? That might be what Labour are planning, I don't know. It would certainly be a better income stream than a one-off, probably clumsy, almost certainly ineffective cash-grab. That said, the political parties have to word things in such a way as to appeal to people's hearts as well as their heads, so a phrase like 'wealth tax' could be more eye-catching. After all, what is wealth but the power to sell stuff (because you've got loads of it) to fund yourself? It's not wealth until it's transacted. It would seem fairer, to me at least, to tax income from trading stuff higher than income from selling your time and energy, i.e. working.
Richard, I agree with you the difficulties in making a wealth tax work. However, I’m not sure your proposed solutions are the answer either. Tax relief on pension contributions are there for valid reasons as are tax reliefs on business assets. Let’s be frank, the problem is collecting tax on multinational corporations that have a presence in the UK - UK individuals and businesses are already taxed heavily. The top rate of income tax is already 45% and tax on pension contributions is restricted for them. The priority a UK Government should have is not to bleed taxpayers further but actually take more responsibility to deploy and spend the taxes they do collect in a more responsible and less wasteful manner. The state of the nation isn’t down to not collecting enough tax but rather squandering a lot of what is already collected. It is too easy to spend other people’s money in ways that you wouldn’t spend if it was your own money.
The problem with wealth taxes is that it's the little people they go after - not the very rich. The very rich can offshore their wealth so its untraceable. Like you said really. I think close the tax loopholes - what you make in the UK you get taxed on in the UK. Simplify it - We could go a long way in having more income if the politicians didn't waste taxpayers money either. The amount of politicians could be reduced by a long way and they need to be better audited as to how gets contracts - much more control over Governments. NI was the one tax employers of huge companies couldn't avoid. But I confess I am not a tax expert - but it seems to me to be extremely complicated. Then - you have council tax which is not income related
If we take back the private sector banks ability to create money, hold treasury bond sales and vote for a government that directly spends/invests to prevent the needed use of the rentier economy such as housing etc, bring needed infrastructure and natural resources back in house to lower the public cost of use and lowering the need of taxation levels, it would be a start. Capital income is heavily reliant on government policy support.
Money is too easy to game. Tax transactions and property. The rich can stop making transactions, and that would reduce the speed at which their wealth is growing. The rich can sell their property, but then just tax the new owner. The tax income cannot leave the country if you tax property. Also, instead of taxing profit, tax revenue (i.e. a type of transaction). The rich can't hide revenue the way they can hide profit. i.e. stop counting losses as corrections for taxation.
The administrative consideration is a large one in the short term. Indirect taxing the riches would certainly be a good start. There are something that the rich could weasel out of over time whereas directly taxing the rich is clear in it's intention to all but, as you imply, less likely to happen
Company taxes are paid on money held within the company. Companies need profits. I suspect you are more interested in taxing the wealth held by individuals when company profits get transferred.
@@alanrobertson9790 I mean kinda, but why is there not like a "company gains tax" for company revenue not just holdings. Like why is it all focus on individual capital gains?
He's right though... its just that he front loads it by rubbishing other ideas and alienating everyone with his attitude. Almost nobody thinks you should be taxed on the value of your wealth as 'you own that already'. You should get taxed on what you *make* from your wealth. Even Gary's economics says the same thing. Oh, and that 'army of tax inspectors' is not required. You only have to set very long sentences and catch one or two. 10 years in jail for any tax evasion over a certain threshold will make everyone think twice. He's also right that you should tax most heavily on inheritance as it is an easy choke point, although taxing businesses heavily on death of the owner is a rubbish idea as it will kill a going concern. Make inheritance tax huge specifically so that the rich leave wealth in trusts and companies. Remember, the core problem is always 'personal wealth is not required to be published', but companies and trusts do have to publish, and that makes them easier to tax. The only other issue apart form the very rich is the large companies who choose a base of operation purely for tax reasons, and actually conduct their business elsewhere. Large companies should be forced to set up a base for tax purposes in each country they have more than a set number of transactions in. So none of this 'Amazon is based in Luxembourg'. It should be forced to have subsidiaries in the UK and France and Germany, so that those countries can collect tax. Again, that may be difficult to police, but you fix that by catching one or two and fining them heavily (which will be easy as there's so few of them - pick two of Google, Facebook, Microsoft and Amazon to catch out, and watch everyone else fold). The rest will think twice.
We need to encourage the ultrawealthy to sell, not discourage it. If captial gains taxes are too high they'll never sell. If their assets are taxed, then they'll be forced to sell. The ultrawealthy must give this country back to the people that live and work there, which reuqires more radical action than adjusting existing taxes
Love getting these insights. Makes sense. Would love to have you, Gary and Rachel on a channel together. Maybe 'The Rest is Supporting Your Fellow Man For A Better, Happier, More Equal Society'. I'm not a marketeer.
The Government has been trying to reduce inequality for 500 years (first poor law 1536). People only lift themselves out of poverty by their own bootstraps. If wealth taxes didn't work, how come all the rich people emigrate from countries that impose them?
I was building a modicum of respect for your content, until this. Just because the remedies to rectify a grossly unjust and immoral situation will be difficult, doesn't mean we should roll over and let this situation continue. Do you agree this situation is immoral?Unjust? Untenable? If so, say so. If not, say so. Plant your flag so we can decided to give you our further time and attention.
Aren’t you missing the point? A wealth tax isn’t just a revenue raising exercise - the point is to force unproductive asset holders to sell, which will finally put a desperately needed brake on asset price inflation. Capital gains tax does the opposite - it encourages the super-rich to continue the unproductive hoarding of assets that’s currently strangling productivity in the uk (e.g. by reducing liquidity for ordinary people / potential entrepreneurs etc. because they can’t secure a loan, because they don’t own anything, because asset ownership is increasingly out of reach to all but the existing wealthy - who often may not be the most productive people). What you’re suggesting might raise more money in the short term but it’s a failed strategy that’s been demonstrated not to work in the long-term. Yes, a wealth tax might be a bit fiddly to implement, but none of the issues you’ve raised are really that challenging to solve - they just seem hard because they’ve had so little political attention, because politicians are almost all landowners and landlords and are never going to devote any energy to this unless they’re forced to by the electorate.
Who’s talking about taxing their assets in the short term? It’s taxing their income (from all sources) we’re all calling for and that would help massively and in a very short space of time too 🤨
Wealthy people don’t participate in the same system, so indeed wealth taxes would not hit those targets - real wealth is hidden in trusts, companies and through offshore structures. There would need to be a more universal approach and agreement between many countries - but this would not happen.
Interesting explanation. You have to be very suspicious of any idea (like a wealth tax) that's touted as being the solution - likely its being touted by those with the most to gain.
Think the hole in your argument lies in property assets. Property assets (buildings and land) cannot be moved off-shore. They are the number one investment for so many wealthy individuals. Sometimes these are rented out, but many stand dormant accruing paper value (easily calculated), and others with an army of caretakers to look after them for when the wealthy owner visits 2-3 times per year. Doesnt matter if its in an offshore trust, company whatever, it still taxable.. And the easiest way to raise substantial income from these is to add 5-6 extra bands onto the Council Tax banding. If that makes the luxury end of the properly market de-value itself as the overseas dark money pulls out, then this would, in some way, go towards a much needed 'market adjustment' in property values to help the less affluent own their own homes.
Only if law reform where tax havens trust banned it would work but risk if did lot would leave uk problem with tax system keeps wages down state subsidizing buisnes if limit interest on QE reserves by bank of England that raise 35 billion year but labours budget isn't inheritance tax which is problem rise in national insurance on employers as could slow down growth small buisnes just stop recruiting or put prices up
Sorry, your argument that it is difficult is not good enough. And then: while these tax inspectors are busy on the rich, they won't be going after the poor for pityful amounts of fraud, spending weeks spying on them. I remember about 15 years ago, reading about a mother of 3 kids on benefit, who had managed to get 20 000 more than she was entitled to from the government, in 3 years. The judge gave her a suspended sentence. his summation was something like: she actually needed the money.
As others have said we can put people on the moon. That cost a lot of time and money but the technological advances paid for the information revolution that followed. AI agents maybe employed to snoop out asset ownership from sources like the Panama Papers. You did hit the nail on the head with what is something actually worth? That leads into a Pandora's box of price fixing, previously exaggerated valuations and so on; but using your painting analogy why not allow for a -20% safety allowance? That'll bring up a conservative estimate of value, lowering the final tax on the owner. A 2% tax on that would probably pay for the UK's green transition and you get a payback via the energy generated. Win-win. Indeed, it maybe possible to reimburse those afflicted over time via price per KWh.
The Islamic wealth tax, zakat, doesn't rely on calculating the value of property. Every horse is valued the same whether it's a race horse or a farm horse, unless it's a foal. Wealth tax isn't paid on paintings or land, but instead on: . gold and silver (nowadays it's fiat cash) . livestock . produce such as wheat and dates I can't remember what else is subject to wealth tax.
I don't think your insurmountable problems are as difficult as you make out: rules for transparency of company ownership could and should be reformed for many reasons and tax havens abolished; rules for defining the beneficiaries of trusts, and hence how they are taxed; there are already people who regularly value all sorts of assets, including art; private companies don't seem to have a problem valuing their assets when they want to get a loan. All these things are assessed for the purposes of death duties so I don't see why it can't be done for a wealth tax.
What about an entreneur who has built a modest business over many years, paying tax on the income that it has provided along the way. If CGT is brought in line with Income Tax, he will lose 45% on the sale of that business; talk about a disincentive to build a business and employ staff - who by the way, also pay taxes, including VAT on everything they buy. There is a huge difference between such a small business owner and say, Rishi Sunak who may be living off the proceeds of a diversified share portfolio. In the past, there was such a thing as Entrepreneurs Relief, which capped CGT at 10% on the first £10 million, subsequently reduced to £1 million. With CGT rates at 20% for higher earners, this did not seem particularly unfair but 45%!!!!! How would this be in line with Labour's stated aim of encouraging growth, what would be the point of taking risks, missing your kids growing up because you were putting in 60 hours a week to make the business work?
If Banks can establish the value of rich people’s assets every time they use it as collateral for a loan to do a leveraged buyout, why do you believe that those same accountants and underwriters wouldn’t be able to determine the value of those same assets while working as tax auditors for the government?
It appeals to those who believe a billionaire is so because they have 1 billion pounds in a bank account lol and get paid tens of millions a year via bank deposits to their debit account.
What ? You want to decrease pension contribution allowances for 'higher rate' taxpayers ? Surely you understand how low the thresholds for that have become ? Just £50K or so now. A £50K income where there is only one income earner in a household will pay the bills but nothing more. Hardly a hint of any 'wealth'. I've nothing against the concept, but you have to set the threshold in the right place. Probably at least double the currently pitiful 'higher rate' tax threshold.
Making wealth is not immoral. Wealth is an unlimited resource - for all practical purposes - the fact that one person has vast wealth is no barrier to the next person creating the same. Undermining property rights has been bad for prosperity throughout history and rulers wasting resources is the norm - that really is immoral.
Much common sense. Except that taxation is a means to fund community expense; equality is idealogy. Equality before the state is the only equality baked-in to democracy and politicians or even voters deciding to confiscate specific people's stuff with discriminatory taxes is tyranny - we might as well have targeted taxes on 'Jews' or 'Londoners'. Progressive tax bands are also arbitary discrimination and entirely superfluous in a welfare state -- so it's a bit odd advocating them in a common-sense case - flat taxes are all we need. Although accountants will be in far less demand if everything is simplified!
Are these flat taxes going to apply to all forms of income, not just wages? Are these flat taxes going to be over revenue or over profit? Because the rich shaped the system so it primarily taxes wages and what little taxes they have to pay, they pay over profit so they can fudge the numbers by making it look like they made a loss.
@@bramvanduijn8086 - Business taxes are anti-democratic and inefficient; they make the tax code ludicrously complex because they are based on ideology. Politicians skim profits from business so they can claim voters are getting a free ride - but if the profits are left in the business they provide more jobs, wages and dividends to those tax-paying voters who are the only democratic source of (income) taxation revenue anyway. Any income tax should be as simple as possible - as well as broad and low. It is complex taxation that creates loop-holes. Simple taxation would massively increase tax revenue as everyone stopped worrying about the complexity of taxes and just started and expanded their enterprises. Corporate Tax Accountancy would disappear.
@Colinturner- I am old enough to remember the rates system where it was the size of the property that determined how much was paid for your local amenities. Then Thatcher🤮 came along and introduced the poll tax, then everyone paid an extra tax not the household. Guess which sections of society that benefitted and which lost out.
Taxation is a story just like money. What we need to focus on is power, in our communities, and specifically ending the ecocidal power of the white western elites and their partners. Realtors and developers and car dealers are committed to the death of both the planet and authentic human culture, materially and philosophically. Everything they do is destructive to the past and the future. All of these debates over the mechanics of managing a system that kills life as a core imperative, they are useless time wasting, worse than misguided.
@@fburton8 OK, tell us how much pension debt the state has accumulated. I'm sure that based on what you say, that Murphy has stated how big that is. Surely you can find it. Talking about debt without the numbers, leaving off the big debts, its just economic fantasy.
By reducing inequality do you mean the rich become poorer or the poor become richer? Giving extra handouts to the poor only make them richer for a short period of time. If the rewards are not there for entrepreneurs to take risks to become rich, then they won’t bother. This makes everyone poorer.
This doesn't reflect real world behaviour The biggest inhibitor on entrepreneurship is prohibitive risk, not lack of reward. We need to give people a stronger safety net (but not a luxurious one) At the moment, only people with generational wealth feel they can be adventurous. Everyone else has to play ultra-cautious as they know they could easily end up destitute if a high-stake idea goes wrong
Warren " Mosler supports eliminating the income tax and replacing it with a real estate tax to "anchor the currency". He also supports eliminating tax advantages for any savings accounts, since he states savings do not increase investments necessarily. " I think you no longer deserve the attention of the youth... You become a conservative bone-head of the old system which is unattainable . Not only Mosler, But Gary Stevenson / Scott Galloway do voices similar arguments like this : " The currency is only as good as the government’s ability to enforce tax payment. Some taxes are easier to enforce than others, which is why I keep coming back to a real estate tax as the base case. If you don’t pay the tax, the government sells the house. They don’t even have to know who owns it. I don’t like income tax because of the high compliance cost. I know it sounds high, but those costs might be 10-15% of GDP when you include all of the time spent in record keeping, laws, contracts, and enforcement. And the fact that there is so much money in tax law means that the brightest and the best gravitate to those positions. So instead of having our brightest and best cure cancer, they are working in difference places in tax law and, of course, other places in the financial sector. It is the biggest brain drain in human history, and it’s getting larger everyday. Also to your question, if we legalize most of the drugs and take the money out of that sector, there should be plenty of room in the jails at least for the near future. But with the real estate tax, of course, there is not jail, apart from the odd case of fraud; the property just gets sold if the tax isn’t paid. One last thing, we already have a national real estate tax at the local level. So, switching over from all the federal taxes to a federal real estate tax should be relatively simple and add substantially to our real standard of living." Sources link is in the comment...
The UK used to have a kind of wealth tax. A tax on the windows of houses, which more wealthy people had. People immediately began boarding up or bricking the windows to reduce the tax.
Tax *unearned income.* Do not allow *economic rent* to be appropriated by private concerns. Income tax is a method to push the tax burden onto the poor. A temporary tax that comes from funding Napoleonic wars. Richard is just moving same the balls around on the table, with none removed. We should get down to basics and not allow commonly created wealth to be privately appropriated. Then remove stealth and bad taxes like Income Tax and VAT. Income Tax is a penalty on production with VAT a penalty on trade. The last things we should be penalizing. We should not view land as a capital item - this is a big problem. Charging for all commonly owned resource and using Land Value Tax as the prime tax is the only way. Look at Hong Kong, Singapore and Taiwan who tax land, not income so much.
Capital gains tax is based on illusory gains because it doesn't allow for the effects of inflation. Averaged over the last few year's unless you made close to 10% per year you were actually losing money. Bringing back indexation allowance is possible, but also requires a large bureaucratic work force to police it if CGT was widely applied, so overall I'm not convinced that CGT is the best alternative either.
Wealth taxes were never about raising tax revenue. As you point out, there are far more effective ways to raise taxes from the wealthy. Wealth taxes were always about making the wealthy less wealthy and so reducing inequality. Whether that's a good thing or not is open to debate, but lets not fool ourselves as to why most people support wealth taxes.
@@BGcam Punishing the most economically productive people for being economically productive is certainly not going to cause problems with overall economic productivity in the economy.
@@marcusmoonstein242 People beyond a certain level of wealth don't care about taxes, because they intend to make money for fun, not for buying things. Otherwise, they'd retire as soon as the become millionaires.
I see you have the scammers back in again; AIIG-zd5dx is not a real person and neither are the people answering his comment so please don’t be daft and follow their ‘advice’ 😂
I think your all or nothing pov on wealth tax is weak. If the assets have a market value, say publicly traded shares, they could be taxed easily without lawyers/tax auditors. Let's start with that first. To totally dismiss the notion of wealth tax is imprudent.
Let’s not have a wealth tax, let’s have a tax on income from wealth?? Kinda splitting hairs a bit there. Something tells me he doesn’t like the young upstart Gary Stevenson lol.
You assume government is better at spending our money than we are which is nonsense. We have seen continual tax rises and greater government spending over the past 25 years and everything is getting worse and not better. Taxing capital simply means it moves offshore and/or doesn't get invested but either way that results in less jobs and/or reduced productivity. What's allowing the rich to to become ultra wealthy is the cost of borrowing which has been artificially kept at zero via ZIRP central bank policies allowing the rich to convert debt into assets with inflation eroding the former and inflating the latter. It's not the income from assets we need to tax but the inflation bonus from debt.
I think a asset tax is a disgusting idea in all honesty but then capital gains tax should be inline with earnings also stop the trusts avoiding inheritance tax or scrap that also. Fiscal drag is also destroying real term wages, up the 40% bracket to 100k and equalise capital gains
The issue isn't wealth tax.. it is tax.. there is a whole industry dedicated to assisting wealthy individuals hide their wealth... we need transparency laws as a starter. But primarily we need proper reform of the existing tax system which focuses on percentage tax takes across all earning/wealth bands... I am on PAYE as a nurse with no tax loopholes to exploit... I pay about 8% of gross pay tax per month... yet people I know who are self employed and earn substantially more pay next to no tax.. corporations pay less than 0.01% in many instances... fair, equitable and transparent tax laws are needed.
I'd like to see you Richard and Gary from Gary's economics have a discussion on tax and what to do, that would be a great video, great video's by the way
Yes, that would be interesting.
Agreed
I’d watch that
Excellent idea.
That would be a class collab!
Don’t forget that the people in charge of introducing a wealth tax are themselves by and large wealthy ……… don’t hold your breath!
No - they are not properly wealthy. Think Bezos, Buffet, Branson, Gates, Musk - that's wealthy.
You yourself are ‘posturing’!
Surely the answer lies with a combination of what you’ve suggested AND starting the process of reclaiming some of the vast infrastructure and property portfolios of the very wealthiest.
We are on the same side - it’s not one or the other…
💯 agree so stupid to say it’s hard to do so let’s not do it
If you want to reclaim property, then tax property.
@@epicchess2021 He is not saying that. He is saying it will cost MORE to do it than it will raise because the hyper-wealthy will ABSOLUTELY ENSURE it does cost more in legal fees in order to get you to drop the scheme.
do the very wealthy tend to strenuously avoid selling their assets, opting instead to borrow against them in perpetuity ? (and writing off the interest paid)
Yes - which incidentally helps with the "how much is it worth" argument - oh, so you valued your Picasso painting at £10M when you used it as collateral for a loan, but now you're only valuing it at £10K on your tax return? Well isn't that interesting.
@@BittermanAndyThe wealth tax is ultimately based on net worth, or equity value, so if you have a painting that is worth $10 million and you use it as collateral to borrow $10 million against the painting's value, its valuation would technically be not even $10K, but in fact $0 as the loan would completely cancel out any value it had! On top of that, the interest paid on the loan could be used to offset income generated in the owner's other business ventures most likely.
Countries like the Netherlands run a wealth tax just fine, why don’t you ask them how they do it
Also see Spain.
Yeah, bizarre take on wealth tax
"It's difficult so we shouldn't do it". JF Kennedy would be proud.
@@stephfoxwell4620Agree completely. The problem in the UK is neither of the 2 establishment political parties that monopolise power is even interested in taxing wealth.
@@229andymon 💯👍
Do you walk everywhere?
not 'difficult' per se, more 'highly impractical'...AND there are apparently far more effective ways of achieving the same , or better, desired result. So, why not choose those instead?
@@davegubbins4428 I don’t see what’s so difficult about implementing a higher rate of income tax for the highest paid employees. Even if some manage to avoid paying some of it, we’d get a return, especially if it was rigorously enforced.
I’m certain any such proposal would be met with howls of derision from those that would be in the firing line. The poor things would be apoplectic telling us how hard up they’d be.
Isn’t the point that we should be taxing wealth more and less focus on salaries? Performance of high earners is directly linked to GDP whereas hoarders of wealth are a drag on the economy
💯
How are hoarders of wealth a drag on the economy? Their money is in banks, not gold bars at their home.
Free market capitalism requires concentrated wealth for investment. Real wealthy people don't have gold or currency stacked up in their basements. If we take wealth from someone and then spend it to boost 'equality' there is a high chance that everybody suffers from the diversion of resources from investment that they would have made.
@@stephfoxwell4620 Is keeping money in a bank account hoarding, though? That deposit should help the bank to lend.
@andyinsuffolk More like they go and hoard it onthe Treasure Islands! 😏
But taxation only exists to control inflation. You explained before that the government just prints money and taxation is just there to keep the lid on money supply. So if people decide to accumulate money and not spend it this will not fuel inflation. The problem since 2008 with QE is that by buying bonds the BoE pushed money into banks who used it on loans. This fuelled a house price inflation. Potentially we now have a bubble
Tax goods at a higher rate based on their cost. For example, VAT on a £15k car = 15%, VAT on a £70k car = 25% and a £200k car at 50%. Make people pay more tax based on what they are able to spend.
So you skipped the maths lesson where they taught percentages.
I’ve always thought that VAT should be reduced on everyday goods which the general public buy and increased on luxury goods eg yachts, Rolex watches, Ferraris.
Or a two tier vat band.
20% taxpayers pay 10% vat
40% taxpayers pay the full 20%?
I mean if millionaire PM Rishy only pays 20% capital gains tax when in reality and fairness he should be paying 40% CGT....
@@stuartd9741 yes this absolutely!
This is an excellent UA-cam channel. Thanks for getting clarification of economic issues out to the public. Keep up the good work.
How is it that those that have most of the nation's wealth get to NEGOTIATE with HM inspectors of taxes while the poorest in society get their taxes taken at source, before they even see their payments?
sadly, pure pragmatism. Their well-paid accountants are likely better than HMRCs at identfying loop holes/areas of interpretation in tax law and it saves the tax payer huge legal fees chasing them through the courts. Pretty damned horrible, but there it is.
@@kevinwells768
You are essentially saying wealthy people are above the law?
Because they can pay lawyers to circumvent regulation?
I agree.
My argument is.
If we want a fair civil society then the same rules should apply across the board..
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I understand wealthy peoples tax affairs are more complicated.
But if we're having tax taken at Source then so should the wealthy.
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Perhaps as a flat tax ~10/15%.
Were only a civil society because everyone abides by the laws of the land..
If people perceive an inherent unfairness this might or could lead to civil unrest or anarchy..
@@stuartd9741 Not exactly above the law - they still ave to comply. But when there is opportunity to interpret ambiguous wording on regulation, and you have the means to question poor wording, then there is opportunity for negotiation. Its basically tort law: i.e. access to redress proportional to the size of your wallet.
@@stuartd9741 I think we both agree. The issue is complexity with tax, which offers up opportunity for tax evasion.
This is a pretty weak argument. The reason we struggle to determine wealth is because we have not invested in the state capacity to determine it.
But minimum 30% capital gains on anything over 10mil. 2% tax on stocks and shares held. 50% tax on foreign owned properties bought above 5mil. 50% windfall tax on existing foreign owned properties above 10mil. Revenue tax for large corps. etc etc
There's loads of things you can do
More tax on foreign-owned property sounds good. The rest just sounds like a tax on good decision-making.
@@metallitech market gains in most instances have nothing to do with good decision making. The stock market is juiced up on massive tax payer transfers to asset holders - you'd simply be taxing that money back to the public who are currently subsidizing those gains. The only securities that shouldn't be taxed capital gains are SIPPs / pensions.
You know what, let's do 90% tax on capital gains over 10mil. Why? Coz fk em, that's why.
@@paulbo9033 Would be better to stop transferring tax-payer money to asset holders in the first place.
Capital gains tax should definitely be teird to the size of the transaction.
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But any taxes designed or targeted at higher earners/wealthy, have to be palatable or proportionate to the asset or transaction being undertaken..
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What I'm saying is.
In order for the wealthy to be on board with paying more tax then, as one of your examples of 30% capital gains tax, this is proportional to the transaction being undertaken so may be more likely to be paid.
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If we ratchet taxes up too much then we'll get push back..
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and the inevitable claims of an exodus form the city...🙄
@@stuartd9741 truly wealthy people don't pay tax. That's the entire point. But the average high income person who owns stocks is not going to move country because tax went up on stocks 5%. Just imagine that conversation with the missus: "the government have raised tax 5% on stocks so in order to avoid paying an extra 10k on my Bitcoin ETF, boomer stocks and meme stocks, we are leaving the country taking out kids out of the school they're settled in, selling our family home, saying goodbye to our lives, friends, family and career here and we're moving to a no tax jurisdiction like Saudi Arabia."
*Wife files for divorce.
This is pure scaremongering that people will move and not pay it. They will pay. There is no choice.
A lot of these problems can be worked around by taxing the value of land.
Surely additional tax on ownership of houses and land is relatively straightforward? (of course that is just a portion of "wealth" - but a portion that we should be glad to disincentivise). This should be compensated by a reduction in stamp duty which would have many positive effects.
Sounds like it'll take a long time. Let's get started today.
Gary Stevenson argues it's a countervailing measure to combat wealth inequality. Are you saying his premise is incorrect?
No. I am just saying there are better ways to deal with the issue.
Gary Stevenson is concerned about the growing wealth inequality in the UK and the economic damage that arises from that. He believes that it's a problem that needs to be addressed but I didn't think that he was an advocate for any specific measure. I was probably in favour of a wealth tax but Richard's argument makes sense. It needs a more in depth scrutiny. Something needs to be done.
Gary's main argument is that the problem is 2 fold. Firstly the political will to do "anything" need to be made and this can only be done by teaching people about the problem and then having them demand change. And then second "how" to solve the problem. Gary have several times mentioned that the "how" is less important atm. and that several solutions can work and that he generally am in favor of all of them. But before we can even start thinking about this part, we NEED people demanding change and therefore we need people to know of the problem.
@@GreenLarsen Absolutely. That was my understanding as well.
@@lonevoiceRichard’s argument doesn’t make sense at all. It assumes it’s an either or when there could be both. It assumes we can’t increase transparency in finance, which frankly needs to happen to aid income tax generation. Also, it assumes that we can’t tax wealth on specific items initially, and then expand the system as transparency increases. It could be a 15 year plan, not a day one objective. I like Richard’s plan, but the system needs to be looked at holistically.
Set up people's tax courts, with normal people on the panel, and the authority to determine whether somebody is trying to avoid tax contrary to what the people want. Make it so the court does not have to consider the letter of the law, but the intention. The court could then determine that such things as hiving of IP to a tax haven then renting it out in another tax environment, was a fiddle and grab the money it reckons should have been paid.
The example of a private company or a racehorse: tell the person that we are valuing it at £X, and they can keep the company/horse if they pay tax on that, otherwise we'll sell it and tax on their actual return.
Put the onus on the wealthy to prove that they have paid a fair contribution to society, and to our adherence to the laws that protect their property, rather than on the taxman to prove otherwise.
I don’t see why we can’t do both, Richard. Given the wealthy are getting obscenely more wealthy and the gap between rich and poor is now at Grand Canyon level we clearly have a problem that is getting progressively worse. Why? Why can’t we reverse the trend?
So we would have to employ an army of tax inspectors? Fine..! Let’s employ them. After all each “soldier” in this army would be earning us money. Let’s start with a few divisions and see what the results are, if they fight the good fight and reverse this sickening trend of haves and have nots, reinforce them with a few more.
We *must*, at the very least, try to stop the rich dictating to us what they’re prepared to contribute.
I think you have heard Richard’s argument, but not listened to it.
He is saying that it is totally impractical to tax existing wealth with this proposal; there are too many components, and too many ways that the wealthy will be able to obfuscate and dodge any definition or valuation of wealth. Unemployment in the UK is low, so where are you even going to find the ‘soldiers’ needed?
He is not saying to do nothing, as many in the comments section seem to think.
@@phosferrax Not me, I’m not suggesting he said do nothing, I’m saying yes, do what he’s saying, but we shouldn’t write off the “traditional” ways to tax either.
I’d like to see a more concerted and enthusiastic effort to even *start* taxing them more. As I say, perhaps not with an “army” right away - build up capacity, hopefully on the back of positive results (more tax gained) from the first cohort. Implement a higher rate of income tax, at the same time as ensuring loopholes are plugged and other ways to avoid are tackled rigorously.
Of course I totally realise I’ve more chance of flapping my arms and flying to the moon to expect the Tories to even contemplate such actions, but the self-termed “People’s Party” could at least pretend to be interested.
@@garyb455 Let them, it’s probably offshore already anyway. Then replace them with people who can’t.
@@garyb455 So tax property. They can't take the land with them. If they sell it to someone else, then tax the new owner of the proprety.
@@phosferrax the restrict them close the loop holes and use force to make them hand over the wealth not law that they can manipulate
Hi Richard. There are already very experienced colleagues working in the NHS as consultants and due to tax on their pension contributions are retiring earlier than they intended to avoid hefty taxes. So taxing income alone may just drive out valuable people from the economy and leave a big hole in staff. Due to lack of staff a lot of juniour doctors are working as locums as they know they can work flexible hours and get paid more due to lack of experienced staff. What can be done for this?
worked in Spain
Land value tax is much easier, more effective and more directly addressing the root causes of the issue.
Boom, and you can’t shove it down a fibre optic cable, or sneak it away in a suitcase.
However would a land tax affect normal people when buying houses?
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Inevitably when the governments crack down on unpaid taxes they tend to enforce laws across the board rather than focusing on the single area that need reform...
@@stuartd9741 Not if set at a level to only affect the 3% of the population which own something like 70% of the land.
They have done since William the Conqueror. See Duke of Westminster. 😊
It's absolutely right that captial gains should be equalised with income tax (including NI) but that serves a different function to wealth tax. The point of taxing wealth directly is not to raise funds for the government but to devalue the wealth itself. This will reduce inequality. Hhe fact that wealthy poople would hire lawyers and accountants in greater numbers and that the government would have to counter may be a waste of lobour resources, but where is the money coming from? The administration of the wealth tax becomes a distribution method for money raised, even if it never gets to the government because the wealthy are paying their service workers.
The problems of valuation are severe though. Many assets, like art and horses would be a waste of time to value. They are not being used to extract rents from others anyway. We could target wealth taxes only at specific areas where an additional purpose exists. For example, a Georgist unimpreved land value tax could be levied in place of council tax (councils recieving a near flat rate of funding per capita to replace their revenue). This makes low density housing, empty housing and disused land more expensive to keep.
The reason the rich invest in art and such is because they can write the buying costs off of their taxes. So stop allowing any tax write offs and the problem is solved. If the tax law says that losses don't matter, then a large part of their bag of tricks doesn't work anymore.
For me, the main argument against taxes is that, for the amount I am taxed, above a threshold, I do not believe the government can make better decisions about how to spend my money than I can.
A wealth tax? Let's not do it because the rich won't like it.😅??? You can bet the rich know what all their stuff is worth - down to the last penny.
Thats why you put asset ceasure on the table.
Well done that man. Fashion politics and twitter have addled so many people's brains it is refreshing to hear someone still capable of having a reasoned thought process. You just have to read some of the comments to see that there are people out there that don't actually care about making society better, they just want to say stuff that they think makes them sound good on social media. Sure the tax reforms you suggest aren't a cure all, but they would be a positive change.
I can see a lot of tax dispute lawyers making a mint, where the wealthy dispute the valuations HMRC might propose. There would need to be some legal framework in place to limit the legal back and forth. That would be a huge drain of HMRC resources. HMRC also seem to have a fair grasp on what artworks are worth, when they accept their display in the Tate Modern, in lieu of the owner paying tax.
In Switzerland, the tax tables have rates which change every CHF 1000 or so. It seems fairer to me than our rather limited levels of income tax and national insurance.
Has anyone studied this in the peer-reviewed literature?
The government have started down the road to transparency regarding company ownership but they do love to drag things out and have failed to chase down refuseniks. However, let’s make a start with the Royal Family who are exempt from all taxes. We could probably pay off the national debt if they paid inheritance and capital gains taxes.
One of the driving reasons for some wealthy proponents of Brexit seems to be to be delaying this kind of transparency 🤷♂️. Sir Mogg, I’m looking at you…
There's no way a single family has enough money to pay off national debt, not even the royal family. And especially not if you're just taxing inheritance and capital gains.
@@bramvanduijn8086 I think you might be underestimating the scale of the royal estates. They own a truly vast amount of stuff in this country!
@@markwelch3564 Not to mention Canada and Australia where they also own a lot of land.
@@bramvanduijn8086 I think you undervalue some of the high net worht individuals around the world.
Reform the voting system so that all our votes count and not just those that perpetuate this rotten system. As Galloway said "2 cheeks of the same a****".
Agreed, capital gains taxes should be implemented in countries where they don’t exist and inheritance taxes as well.
I believe inheritance should be regarded as income beyond a fairly generous limit (as for the limit... say, enough to buy a modest standard family home, something in that area). Much like your argument for capital gains tax normalizing with income tax and national insurance. A single, simplified tax system, for all forms of income.
And if there are going to be tax breaks, it would seem these should be given to those who make their income by their hard work- which is the ideal that every politician claims they uphold...
INheritance tax is already very generous. You have to inherit huge amounts to pay tax on it.
@@annepoitrineau5650 Yes, I know - I think the limit should be somewhat less generous.
@@antonymossop3135 Me too.
An excellent analysis and proposed solution of/to this appalling situation. A simplified and progressive tax regime would indeed be good. A lot of able people currently engaged in 'tax efficiency' could then find useful jobs to do.
Am I correct in saying that the basic difference as you see it is taxation on current assets versus taxation on transaction of those assets? That might be what Labour are planning, I don't know. It would certainly be a better income stream than a one-off, probably clumsy, almost certainly ineffective cash-grab. That said, the political parties have to word things in such a way as to appeal to people's hearts as well as their heads, so a phrase like 'wealth tax' could be more eye-catching. After all, what is wealth but the power to sell stuff (because you've got loads of it) to fund yourself? It's not wealth until it's transacted. It would seem fairer, to me at least, to tax income from trading stuff higher than income from selling your time and energy, i.e. working.
Richard, I agree with you the difficulties in making a wealth tax work. However, I’m not sure your proposed solutions are the answer either. Tax relief on pension contributions are there for valid reasons as are tax reliefs on business assets. Let’s be frank, the problem is collecting tax on multinational corporations that have a presence in the UK - UK individuals and businesses are already taxed heavily. The top rate of income tax is already 45% and tax on pension contributions is restricted for them. The priority a UK Government should have is not to bleed taxpayers further but actually take more responsibility to deploy and spend the taxes they do collect in a more responsible and less wasteful manner. The state of the nation isn’t down to not collecting enough tax but rather squandering a lot of what is already collected. It is too easy to spend other people’s money in ways that you wouldn’t spend if it was your own money.
The problem with wealth taxes is that it's the little people they go after - not the very rich. The very rich can offshore their wealth so its untraceable. Like you said really. I think close the tax loopholes - what you make in the UK you get taxed on in the UK. Simplify it - We could go a long way in having more income if the politicians didn't waste taxpayers money either. The amount of politicians could be reduced by a long way and they need to be better audited as to how gets contracts - much more control over Governments. NI was the one tax employers of huge companies couldn't avoid. But I confess I am not a tax expert - but it seems to me to be extremely complicated. Then - you have council tax which is not income related
Property is a number one investment for the wealthy. Can't be moved overseas, so crying out for better taxation.
They're too wealthy, and have way too many resources and power for a wealth tax to make any meaningful impact, so lets just not bother.
If we take back the private sector banks ability to create money, hold treasury bond sales and vote for a government that directly spends/invests to prevent the needed use of the rentier economy such as housing etc, bring needed infrastructure and natural resources back in house to lower the public cost of use and lowering the need of taxation levels, it would be a start. Capital income is heavily reliant on government policy support.
Tax money not people.
Money is too easy to game. Tax transactions and property.
The rich can stop making transactions, and that would reduce the speed at which their wealth is growing.
The rich can sell their property, but then just tax the new owner. The tax income cannot leave the country if you tax property.
Also, instead of taxing profit, tax revenue (i.e. a type of transaction). The rich can't hide revenue the way they can hide profit. i.e. stop counting losses as corrections for taxation.
Well physical assets are what needs to be taxed, very easy to identify. We manage to value assets for other purposes, it’s really not that difficult.
Let's start with the houses they own... that's hard to hide...
The administrative consideration is a large one in the short term. Indirect taxing the riches would certainly be a good start. There are something that the rich could weasel out of over time whereas directly taxing the rich is clear in it's intention to all but, as you imply, less likely to happen
This sounds plausible but to what extent is "company tax" or "corporation tax" part of the equation?
Company taxes are paid on money held within the company. Companies need profits. I suspect you are more interested in taxing the wealth held by individuals when company profits get transferred.
@@alanrobertson9790 I mean kinda, but why is there not like a "company gains tax" for company revenue not just holdings. Like why is it all focus on individual capital gains?
@@danksheev66 Because the company lobbyists write the tax laws.
He's right though... its just that he front loads it by rubbishing other ideas and alienating everyone with his attitude. Almost nobody thinks you should be taxed on the value of your wealth as 'you own that already'. You should get taxed on what you *make* from your wealth. Even Gary's economics says the same thing.
Oh, and that 'army of tax inspectors' is not required. You only have to set very long sentences and catch one or two. 10 years in jail for any tax evasion over a certain threshold will make everyone think twice.
He's also right that you should tax most heavily on inheritance as it is an easy choke point, although taxing businesses heavily on death of the owner is a rubbish idea as it will kill a going concern. Make inheritance tax huge specifically so that the rich leave wealth in trusts and companies. Remember, the core problem is always 'personal wealth is not required to be published', but companies and trusts do have to publish, and that makes them easier to tax.
The only other issue apart form the very rich is the large companies who choose a base of operation purely for tax reasons, and actually conduct their business elsewhere. Large companies should be forced to set up a base for tax purposes in each country they have more than a set number of transactions in. So none of this 'Amazon is based in Luxembourg'. It should be forced to have subsidiaries in the UK and France and Germany, so that those countries can collect tax.
Again, that may be difficult to police, but you fix that by catching one or two and fining them heavily (which will be easy as there's so few of them - pick two of Google, Facebook, Microsoft and Amazon to catch out, and watch everyone else fold). The rest will think twice.
We need to encourage the ultrawealthy to sell, not discourage it. If captial gains taxes are too high they'll never sell. If their assets are taxed, then they'll be forced to sell. The ultrawealthy must give this country back to the people that live and work there, which reuqires more radical action than adjusting existing taxes
Sounds like a good case to me. I’m no expert but why do it the hard way if you can get better results an easier way.
Love getting these insights. Makes sense. Would love to have you, Gary and Rachel on a channel together. Maybe 'The Rest is Supporting Your Fellow Man For A Better, Happier, More Equal Society'. I'm not a marketeer.
The Government has been trying to reduce inequality for 500 years (first poor law 1536). People only lift themselves out of poverty by their own bootstraps.
If wealth taxes didn't work, how come all the rich people emigrate from countries that impose them?
How tall is a money tree.. & yet the is a retrospectively forest out there.. once discovered charge penalties for felling & thinning 🙄🙄🤔🤔😎
I was building a modicum of respect for your content, until this. Just because the remedies to rectify a grossly unjust and immoral situation will be difficult, doesn't mean we should roll over and let this situation continue. Do you agree this situation is immoral?Unjust? Untenable? If so, say so. If not, say so. Plant your flag so we can decided to give you our further time and attention.
We don't tax capital gains. He said tax capital gains at the same rate as labour. It's already a known quantity. And it's even more immoral and unjust
Aren’t you missing the point? A wealth tax isn’t just a revenue raising exercise - the point is to force unproductive asset holders to sell, which will finally put a desperately needed brake on asset price inflation. Capital gains tax does the opposite - it encourages the super-rich to continue the unproductive hoarding of assets that’s currently strangling productivity in the uk (e.g. by reducing liquidity for ordinary people / potential entrepreneurs etc. because they can’t secure a loan, because they don’t own anything, because asset ownership is increasingly out of reach to all but the existing wealthy - who often may not be the most productive people).
What you’re suggesting might raise more money in the short term but it’s a failed strategy that’s been demonstrated not to work in the long-term.
Yes, a wealth tax might be a bit fiddly to implement, but none of the issues you’ve raised are really that challenging to solve - they just seem hard because they’ve had so little political attention, because politicians are almost all landowners and landlords and are never going to devote any energy to this unless they’re forced to by the electorate.
Who’s talking about taxing their assets in the short term? It’s taxing their income (from all sources) we’re all calling for and that would help massively and in a very short space of time too 🤨
Wealthy people don’t participate in the same system, so indeed wealth taxes would not hit those targets - real wealth is hidden in trusts, companies and through offshore structures. There would need to be a more universal approach and agreement between many countries - but this would not happen.
Interesting explanation. You have to be very suspicious of any idea (like a wealth tax) that's touted as being the solution - likely its being touted by those with the most to gain.
I prefer the views on 'gary s economics'
Think the hole in your argument lies in property assets. Property assets (buildings and land) cannot be moved off-shore. They are the number one investment for so many wealthy individuals. Sometimes these are rented out, but many stand dormant accruing paper value (easily calculated), and others with an army of caretakers to look after them for when the wealthy owner visits 2-3 times per year. Doesnt matter if its in an offshore trust, company whatever, it still taxable.. And the easiest way to raise substantial income from these is to add 5-6 extra bands onto the Council Tax banding.
If that makes the luxury end of the properly market de-value itself as the overseas dark money pulls out, then this would, in some way, go towards a much needed 'market adjustment' in property values to help the less affluent own their own homes.
Those suggestions are effectively a wealth tax.
Only if law reform where tax havens trust banned it would work but risk if did lot would leave uk problem with tax system keeps wages down state subsidizing buisnes if limit interest on QE reserves by bank of England that raise 35 billion year but labours budget isn't inheritance tax which is problem rise in national insurance on employers as could slow down growth small buisnes just stop recruiting or put prices up
Properly funding local government with updated rates is probably a good idea.
Sorry, your argument that it is difficult is not good enough. And then: while these tax inspectors are busy on the rich, they won't be going after the poor for pityful amounts of fraud, spending weeks spying on them. I remember about 15 years ago, reading about a mother of 3 kids on benefit, who had managed to get 20 000 more than she was entitled to from the government, in 3 years. The judge gave her a suspended sentence. his summation was something like: she actually needed the money.
As others have said we can put people on the moon. That cost a lot of time and money but the technological advances paid for the information revolution that followed. AI agents maybe employed to snoop out asset ownership from sources like the Panama Papers. You did hit the nail on the head with what is something actually worth? That leads into a Pandora's box of price fixing, previously exaggerated valuations and so on; but using your painting analogy why not allow for a -20% safety allowance? That'll bring up a conservative estimate of value, lowering the final tax on the owner. A 2% tax on that would probably pay for the UK's green transition and you get a payback via the energy generated. Win-win. Indeed, it maybe possible to reimburse those afflicted over time via price per KWh.
The Islamic wealth tax, zakat, doesn't rely on calculating the value of property. Every horse is valued the same whether it's a race horse or a farm horse, unless it's a foal.
Wealth tax isn't paid on paintings or land, but instead on:
. gold and silver (nowadays it's fiat cash)
. livestock
. produce such as wheat and dates
I can't remember what else is subject to wealth tax.
I don't think your insurmountable problems are as difficult as you make out: rules for transparency of company ownership could and should be reformed for many reasons and tax havens abolished; rules for defining the beneficiaries of trusts, and hence how they are taxed; there are already people who regularly value all sorts of assets, including art; private companies don't seem to have a problem valuing their assets when they want to get a loan.
All these things are assessed for the purposes of death duties so I don't see why it can't be done for a wealth tax.
Most of the wealth of the very wealthy derives from *economic rent,* not any production.
@@johnburns4017and this is a problem, because rent seeking is parasitic on productive work. Wonder why we have a productivity crisis right now? 🤔
@@markwelch3564
Rent seeking *is* parasitic - full stop.
Eliminating rent seeking will sort many things out naturally.
You could have a land tax. You can't hide land.
What about an entreneur who has built a modest business over many years, paying tax on the income that it has provided along the way. If CGT is brought in line with Income Tax, he will lose 45% on the sale of that business; talk about a disincentive to build a business and employ staff - who by the way, also pay taxes, including VAT on everything they buy. There is a huge difference between such a small business owner and say, Rishi Sunak who may be living off the proceeds of a diversified share portfolio. In the past, there was such a thing as Entrepreneurs Relief, which capped CGT at 10% on the first £10 million, subsequently reduced to £1 million. With CGT rates at 20% for higher earners, this did not seem particularly unfair but 45%!!!!! How would this be in line with Labour's stated aim of encouraging growth, what would be the point of taking risks, missing your kids growing up because you were putting in 60 hours a week to make the business work?
If Banks can establish the value of rich people’s assets every time they use it as collateral for a loan to do a leveraged buyout, why do you believe that those same accountants and underwriters wouldn’t be able to determine the value of those same assets while working as tax auditors for the government?
UBI + Sales Tax could work, I believe - assuming that MMT/UBI is valid. Even the wealthy buy stuff.
How do you circumvent the wealthy having their assets being foreign owned or becoming tax exiled prior to liquidising their assets?
Valuations are not the issue. The taxman does that all day long. Hidding their wealth is the issue. And should be criminalised.
It appeals to those who believe a billionaire is so because they have 1 billion pounds in a bank account lol and get paid tens of millions a year via bank deposits to their debit account.
What ? You want to decrease pension contribution allowances for 'higher rate' taxpayers ? Surely you understand how low the thresholds for that have become ? Just £50K or so now. A £50K income where there is only one income earner in a household will pay the bills but nothing more. Hardly a hint of any 'wealth'. I've nothing against the concept, but you have to set the threshold in the right place. Probably at least double the currently pitiful 'higher rate' tax threshold.
I don't care. I want both wealth taxes and windfall taxes. For moral reasons!
As he was saying, moral taxes will get HMRC tied up for years, practical taxes would actually generate revenue and be paid.
Making wealth is not immoral. Wealth is an unlimited resource - for all practical purposes - the fact that one person has vast wealth is no barrier to the next person creating the same. Undermining property rights has been bad for prosperity throughout history and rulers wasting resources is the norm - that really is immoral.
@@garycroft8213 Why not have both? (You could recruit more people for HMRC.)
@garycroft8213 As I said: why not have both??
@@andyinsuffolk But most people on the left on UA-cam think that billionaires are bad for society.
Just increase the national debt - it's a good thing according to you
I finally agree with you on something although I suspect we wouldn’t agree on the appropriate rate.
Wait -I'm sure you put out a video that said "YOU NEED TO TAX WAELTH TO MAKE AN ECONOMY GROW"???
Much common sense. Except that taxation is a means to fund community expense; equality is idealogy. Equality before the state is the only equality baked-in to democracy and politicians or even voters deciding to confiscate specific people's stuff with discriminatory taxes is tyranny - we might as well have targeted taxes on 'Jews' or 'Londoners'. Progressive tax bands are also arbitary discrimination and entirely superfluous in a welfare state -- so it's a bit odd advocating them in a common-sense case - flat taxes are all we need. Although accountants will be in far less demand if everything is simplified!
Are these flat taxes going to apply to all forms of income, not just wages? Are these flat taxes going to be over revenue or over profit? Because the rich shaped the system so it primarily taxes wages and what little taxes they have to pay, they pay over profit so they can fudge the numbers by making it look like they made a loss.
@@bramvanduijn8086 - Business taxes are anti-democratic and inefficient; they make the tax code ludicrously complex because they are based on ideology. Politicians skim profits from business so they can claim voters are getting a free ride - but if the profits are left in the business they provide more jobs, wages and dividends to those tax-paying voters who are the only democratic source of (income) taxation revenue anyway. Any income tax should be as simple as possible - as well as broad and low. It is complex taxation that creates loop-holes. Simple taxation would massively increase tax revenue as everyone stopped worrying about the complexity of taxes and just started and expanded their enterprises. Corporate Tax Accountancy would disappear.
Tax property - rich people do not live in hovels....
@Colinturner- I am old enough to remember the rates system where it was the size of the property that determined how much was paid for your local amenities. Then Thatcher🤮 came along and introduced the poll tax, then everyone paid an extra tax not the household. Guess which sections of society that benefitted and which lost out.
Taxation is a story just like money. What we need to focus on is power, in our communities, and specifically ending the ecocidal power of the white western elites and their partners. Realtors and developers and car dealers are committed to the death of both the planet and authentic human culture, materially and philosophically. Everything they do is destructive to the past and the future. All of these debates over the mechanics of managing a system that kills life as a core imperative, they are useless time wasting, worse than misguided.
I'm not sure even low interest rates are justified
Massive austerity will. It's going to happen. All those debts that Murphy won't discuss
@@fburton8 OK, tell us how much pension debt the state has accumulated.
I'm sure that based on what you say, that Murphy has stated how big that is.
Surely you can find it.
Talking about debt without the numbers, leaving off the big debts, its just economic fantasy.
By reducing inequality do you mean the rich become poorer or the poor become richer? Giving extra handouts to the poor only make them richer for a short period of time. If the rewards are not there for entrepreneurs to take risks to become rich, then they won’t bother. This makes everyone poorer.
This doesn't reflect real world behaviour
The biggest inhibitor on entrepreneurship is prohibitive risk, not lack of reward. We need to give people a stronger safety net (but not a luxurious one)
At the moment, only people with generational wealth feel they can be adventurous. Everyone else has to play ultra-cautious as they know they could easily end up destitute if a high-stake idea goes wrong
Make private banks live within their means. Take away their ability to create money.
Warren " Mosler supports eliminating the income tax and replacing it with a real estate tax to "anchor the currency". He also supports eliminating tax advantages for any savings accounts, since he states savings do not increase investments necessarily. " I think you no longer deserve the attention of the youth... You become a conservative bone-head of the old system which is unattainable .
Not only Mosler, But Gary Stevenson / Scott Galloway do voices similar arguments like this :
" The currency is only as good as the government’s ability to enforce tax payment.
Some taxes are easier to enforce than others, which is why I keep coming back to a real estate tax as the base case. If you don’t pay the tax, the government sells the house. They don’t even have to know who owns it.
I don’t like income tax because of the high compliance cost. I know it sounds high, but those costs might be 10-15% of GDP when you include all of the time spent in record keeping, laws, contracts, and enforcement.
And the fact that there is so much money in tax law means that the brightest and the best gravitate to those positions. So instead of having our brightest and best cure cancer, they are working in difference places in tax law and, of course, other places in the financial sector.
It is the biggest brain drain in human history, and it’s getting larger everyday.
Also to your question, if we legalize most of the drugs and take the money out of that sector, there should be plenty of room in the jails at least for the near future. But with the real estate tax, of course, there is not jail, apart from the odd case of fraud; the property just gets sold if the tax isn’t paid.
One last thing, we already have a national real estate tax at the local level. So, switching over from all the federal taxes to a federal real estate tax should be relatively simple and add substantially to our real standard of living." Sources link is in the comment...
Tax them, anyway!
The UK used to have a kind of wealth tax. A tax on the windows of houses, which more wealthy people had. People immediately began boarding up or bricking the windows to reduce the tax.
Tax *unearned income.* Do not allow *economic rent* to be appropriated by private concerns.
Income tax is a method to push the tax burden onto the poor. A temporary tax that comes from funding Napoleonic wars.
Richard is just moving same the balls around on the table, with none removed.
We should get down to basics and not allow commonly created wealth to be privately appropriated. Then remove stealth and bad taxes like Income Tax and VAT. Income Tax is a penalty on production with VAT a penalty on trade. The last things we should be penalizing. We should not view land as a capital item - this is a big problem.
Charging for all commonly owned resource and using Land Value Tax as the prime tax is the only way. Look at Hong Kong, Singapore and Taiwan who tax land, not income so much.
Capital gains tax is based on illusory gains because it doesn't allow for the effects of inflation. Averaged over the last few year's unless you made close to 10% per year you were actually losing money. Bringing back indexation allowance is possible, but also requires a large bureaucratic work force to police it if CGT was widely applied, so overall I'm not convinced that CGT is the best alternative either.
@@stephfoxwell4620 George Osborne cancelled it.
@@stephfoxwell4620 My bad, thanks for the correction.
All due respect Richard... a few years ago, didn't you say than national debt was unimportant?
Good Luck With The Book...
Wealth taxes were never about raising tax revenue. As you point out, there are far more effective ways to raise taxes from the wealthy. Wealth taxes were always about making the wealthy less wealthy and so reducing inequality. Whether that's a good thing or not is open to debate, but lets not fool ourselves as to why most people support wealth taxes.
It’s a good thing.
@@BGcam Punishing the most economically productive people for being economically productive is certainly not going to cause problems with overall economic productivity in the economy.
@@marcusmoonstein242
People beyond a certain level of wealth don't care about taxes, because they intend to make money for fun, not for buying things. Otherwise, they'd retire as soon as the become millionaires.
Oh, the irony. He posted another video very recently, saying that we should tax the wealthy ...
Which is it then???
I see you have the scammers back in again; AIIG-zd5dx is not a real person and neither are the people answering his comment so please don’t be daft and follow their ‘advice’ 😂
Yes, but it's about making a political statement as well as an economic one.
I think your all or nothing pov on wealth tax is weak. If the assets have a market value, say publicly traded shares, they could be taxed easily without lawyers/tax auditors. Let's start with that first. To totally dismiss the notion of wealth tax is imprudent.
Let’s not have a wealth tax, let’s have a tax on income from wealth?? Kinda splitting hairs a bit there. Something tells me he doesn’t like the young upstart Gary Stevenson lol.
You assume government is better at spending our money than we are which is nonsense. We have seen continual tax rises and greater government spending over the past 25 years and everything is getting worse and not better. Taxing capital simply means it moves offshore and/or doesn't get invested but either way that results in less jobs and/or reduced productivity. What's allowing the rich to to become ultra wealthy is the cost of borrowing which has been artificially kept at zero via ZIRP central bank policies allowing the rich to convert debt into assets with inflation eroding the former and inflating the latter. It's not the income from assets we need to tax but the inflation bonus from debt.
What a load of crap!
Those with expensive houses but low income, e.g. pensioners and the sick and injured will need to sell their homes to pay the tax.
More pathetic excuses for wealth inequality.
I think a asset tax is a disgusting idea in all honesty but then capital gains tax should be inline with earnings also stop the trusts avoiding inheritance tax or scrap that also. Fiscal drag is also destroying real term wages, up the 40% bracket to 100k and equalise capital gains
Reduce the size of government and tax the rich. Stop corporations a minimum percentage to stop fraud.