The UK tax system is a con | Economics | New Statesman
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- Опубліковано 10 тра 2024
- A tax system that allows millionaire Rishi Sunak to pay a lower tax rate than working people is in dire need of reform, says Harry Lambert.
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“If everyone in the country understood how the tax code worked, it wouldn't last very long.” - Harry Lambert
Did you know that the burden of council tax is about ten times as heavy in poorer areas as in richer ones? Did you know that Rishi Sunak’s effective tax rate was 23% last year, which is lower than the tax rate you pay if you earn £37,000 in income?
Harry Lambert speaks to Freddie Hayward about his cover story for the New Statesman and explains how the UK’s tax system entrenches inequality, stymies growth, and rewards a few at the expense of the many.
Read the piece here: www.newstatesman.com/politics...
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Watch next: “Are they stupid?!” - Liz Truss economics explained ua-cam.com/video/hcLw8cT5Lgs/v-deo.html
Taxes * Income Tax * Capital Gains Tax * National Insurance * VAT * Council Tax * Corporation Tax * Dividend Tax * Bank payroll Tax * Petroleum Revenue Tax * Fuel Duties * Vehicle Tax - VED * SORN - Vehicles parked off road * Vehicle Registration * Vehicle MOT * Inheritance Tax * Stamp Duty * Tobacco Duties * Spirits Duties * Beer Duties * Wines Duties * Cider Duties * Betting & Gaming Duties * Air Passenger Duty * Insurance Premium Tax * Landfill Tax * Climate Change Levy * Aggregates Tax * Congestion Charge * ULEZ Stealth Taxes * Income Tax Threshold Freezes * Personal Savings Interest Threshold * Lifetime Allowance on Pensions * Parking Fines * Speeding Fines * Box Junction Fines * LTN Fines * AI Cameras.
Where does it say in law that you have to pay it please
I plan on leaving the UK after living here 42 years. I have had enough of this countries rule, government and the whole lot!
I left during the thatcher years , came to Canada and never looked back
Where we going i’m coming with you.
Bingo-that really is the answer history tells us this-Rise and Fall of the Roman Empire-excessive taxes eventually kill your country bc wealthy can leave so economy of country falls
Forget Canada and their stupid Trudeau. Canadians are moving to America. We’d love to show you what financial freedom looks like.
You wouldn't want to move to New Zealand by any chance? If you do things are arguably a lot worse. We have become locked into Neoliberalism since 1984 and one of the parties (the ACT Party) was born out of the ashes of a betraying Labour Party that preceded it and we had an even worse government that followed - a National government with Ruth Richardson as Finance Minister where neoliberalism was expressed in an even more extreme and cruel way. She was so awful that not even Prime Minister, Jim Bolger, could stomach her any longer and sacked her.
This is when our society became really unequal, but we had a voting system (MMP) that locked in a situation of political timidity that panders to the middle, swinging voters so nothing ever gets done, except for the benefit of the rich and so-called middle voters whose interests are purely for themselves and what they can get out of the government's so-called promises.
The latest government has a National prime minister who was CEO of Air New Zealand and wants to run the government along corporate lines. National has two coalition partners who claim to have a mandate for their vile policies, including trashing the environment and destroying what's left of out natural biodiversity for so-called development projects (chosen by three undemocratic ministers) including mining, and more roads at the expense of rail, coastal shipping, cycling and walking - all at the expense of managing CO2 emissions and consequent global warming. They're also taking an axe to the health system, social welfare, all for protecting the interests of the wealthy. If they have a plan for anything, they haven't communicated it to long-suffering New Zealanders. They're New Zealand's answer to Boeing, but we can only hope that either they develop some sense and compassion or they're voted out as a one-term government. The two coalition partners (ACT and New Zealand First) claim to have been given a mandate to put forward their insane and insulting policies that retraumatises Maori in a racist and neo-colonial fit of pique by the ACT leader, but, between them, they only got around 17% of the vote, compared with the more left wing Green Party that got over 13% alone. Their claim to have a mandate is hardly credible and they are the tail of a very small chihuahua wagging a large St Bernard, nevertheless they hold the balance of power. All three coalition partners are New Zealand's political answer to Boeing and just as incompetent and, dare I say, corrupt.
It is hard to believe that the British Tories are any worse than what we have here, but hearing Liz Truss and Jacob Rees-Mogg speak I'm hardly filled with confidence. It seems as if it's Prince Andrew running the country and determining policy.
I would argue that this tax system is one of the reasons we have low economic growth because it doesn’t encourage us to be productive. Why would anyone with lots of money invest in new factories and technologies when they can buy and sell assets, such as property, which will earn more money than working on something that improves the countries ability/productivity in producing something like a good or service?
Not to mention, when you earn over £50k a year, you are considered to be "rich," and half of everything over that goes to the government.
Meanwhile, buying a modest house in London would cost you £600k minimum.
It demotivates work and actually encourages people to go on the dole.
You have hit the mail on the head. Investing in production, through company shares has a level of risk which is far greater than teh risk involved in owning property. So house prices rise, benefiting existing owners, and companies find themselves borrowing at terms which are difficult to pay.
Harry Lambert suggests we take money from those who have acquired more and give it to those have less. Who would work harder knowing they will have to hand it over to those that work less?
@@A190xx If I have interpreted your point correctly, it depends on how it's acquired and then depends on where it goes. If it's simply tax the rich more and then hand it out in 'out of work' benefits then i agree, it stops aspiration of those who strive as they climb into greater wealth. If you tax capital gains the same as you would income, then invest that into proper healthcare, education, transport and improving deprived areas then it creates more options for those less well off to become strivers themselves. The current tax situation perpetuates inequality of choice and options available. Society can't help those who won't help themselves, but it should at least provide help to those who choose to do so. I can't see the current system doing that and we need money to help them.
I am particularly upset as high earner. I just worked over a year to earn a significant bonus. The tax burden is so high, it prevents me or anyone from ever becoming wealthy as an employee. The only path to true wealth is via the limited company/corporation.
Ir35 destroyed a lot of workers. Tax is 2 high.. not worth working, let others pay the tax for benefits.. everyone should do it, make life a lot less stressful.
Don't forget trusts and offshoring, which is where most of the country's hidden wealth and corruption, centered in the City of London, right under our very noses.
It's true. Work is taxed much more highly compared to income from property.
@@johntbaxter Actually no. When I was working my marginal tax rate was 48%. Now that I live of capital gains it's 10% when I sell assets.
For profit corporation of the treasury is double-dealing. Tricking natural, living breathing men / women workers into accepting imposed liability to pay, on the part of a 'person' - a legal fiction corporate entity. But you are not liable, being not a "person". Or body of "persons" corporate or un incorporate. However, the choice is a personal one. But keep feeding the cash hungry monster and it will devour you all. It is following the WEF-led plan of you all owing NOTHING - not even the work you do; and being happy about it. Caveat emptor.
As a business owner I've reached a point where I now see little to no value in investing further in my own business. Any potential increase in returns is so punitively taxed that it's no longer attractive in any way shape or form. The bigger problem I see is there's no viable alternative to the shambles we currently have in power. We have two major political parties that are simply varying degrees of right with seemingly nothing new on offer. I'm in my 50's and I've never before reached a point where I don't feel there is a party who I feel inclined to support. I genuinely see no viable party right now.
Agree 👍🏼
nothing wrong with having a small business. everynoe nowadays wants to own the world ;)
It’s a sell out country. Chaos/ civil turmoil shortly
Do what other corporations do - take on lots of debt so you in theory have zero profits whilst paying yourself big dividends.
@@PazLeBonno not everyone wants to “own the world”. Not even the top 10% want to own the world. You only need an income of £60k to be in the top 10%. And the top 1% only earn £173k per year. Sounds a lot I know, and I wish that was me… but even that is not a tremendous amount of money.
No it’s only about one or two dozen people in total who really want to “own the world”. Most people just want to own a decent home, have a nice car, go on holiday every year and be able to retire without worrying. The top 1% are still just small fry’s.
Cut budget of prisons: more drugs and overfull prisons.
Cut budget to rebuild schools: pupils cannot attend crumbling schools.
Cut budgets to Councils: roads are terrible, councils going bust, poor social services, poor children's services.
The list of years of cutting budgets is our country becoming crap.
The issue is where did the money flow? The video suggests just the asset rich got wealthier.
Legalise and tax cannabis. Less for police to deal with, and more tax income.
Spend it all on renewable generation to reduce energy costs
To be fair my person opinion is that if you are an adult you should be able to put whatever you want in your own body and we should be legalizing and taxing drugs because all drug criminalization does is create a revenue stream for criminals, costs police time and tax payer money locking people away, and I mean all drugs. This would need to come with labelling to be like this can cause X, Y and Z and for drugs that do cause aggression-which I would like to point out alcohol is worse than most illicit drugs when it comes to that-a special that this drug is known to cause excess aggressive tendencies and that if you commit a violent crime while under it's influence you will be subject to forced rehab and a longer jail sentence.
This is not to actually stop people committing violent crimes while under the influence, it's cautionary so that people are less likely to take it in the first place and if they do they take precessions so they can't hurt anyone else before they take it.
Also you would be taking a chunk of that tax money from the sale of drugs and putting it into rehabilitation clinics and public awareness of drugs and legalization has been shown to decrease the rate at which people take drugs, almost eliminate overdosing, cutting off a funding source for organized crime and the rest of the supply chain for the illicit production and distribution of illegal drugs and putting it in the hands of people above board which will bluster the economy.
There is nothing but up sides for legalization as long as you enable good quality treatment for addiction.
HSBC is people's banks
My energy company sends me a bill which say that all of the energy I use is from 100% renewable sources, but it is no cheaper than anyone else’s.
I love that these corrupt politicians are being found out by these intelligent people. People are finally awakening to these corrupt and illegal schemes that is being imposed on them.
"Finally waking up", what have they been doing to date to just be waking up? Partying? Pathetic..🙄
Sounds like bunch of populistic leftie propoganda.
Wealth tax is what it is. You'll try to tax these people with higher taxes they'll move the money out and you'll get nothing. For them it's easier to move capital then for regular people.
Many have tried and failed.
There has to be another solution than take from rich give to the poor. Never worked and never will.
Great comment more and more citizens of the U.K. are understanding how deeply corrupt our politicians are. Slowly but surely more of the corruption will be exposed
@@nyakwarObat😂😂
The tax scheme is as old as the hills.
And politicians are all corrupt. All the decent people are killed and murdered.
The irony that an ad popped up halfway through this video claiming you can make 1 million tax free through commercial property
It is has always amazed me that we tax actual work progressively at 20%, 40% and 45% but capitals gains tax is lower at 10% and 20% (18% and 28% for residential property). So you literally get taxed more for producing goods and services and contributing to the economy than being lucky enough to own assets and doing nothing to earn that the return on those assets.
And of course there is National insurance that stops at a certain level that never seems to be updated.
"lucky enough to own assets and doing nothing to earn that the return on those assets."
Because CGT is not indexed against inflation you can be taxed for making a loss on those assets in real terms.
When you include NI the real tax rates are 32%,42%.
@@NorthDownReader income is not indexed against inflation either.
CGT is lower because rich people run the country.
Gordon Brown changed the system.
Blue Labour.
The UK tax code should be a compulsory topic in state school curriculums. Tory politicians are practiced, professional (many are lawyers) liars. Teach students about the facts of the economic environment and their welfare so they can recognise a liar or a grifter when they see and hear them, and vote accordingly.
What's with the hatred of lawyers? All they do is try to make sure their clients are treated impartially in line with the laws of the land. Property lawyers, family lawyers, public defence defence lawyers....
cool
It's very obvious why they don't do this. Educating people about taxes would do nothing to maintain the status quo
That’s why Labour are ruling it out. They aren’t thinking about how to appeal to the public, they are desperately scared of turning the wealthy people who run our media and fund our politics against them. starmar is trying to sound amorphously progressive while not actually threatening the wealth and power of the people who make fortunes and gain ever more influence from the system as it’s currently run
Just teaching them where money is created would be a good start, practically no one understands Fractional Reserve Banking. How inflation is a stealth tax and the basics of the Austrian school of economics should also be on the curriculum.
The utilization of after-tax money and tax-free growth makes opening a Roth IRA very advantageous. Through a careful guidance of my FA, I did not pay taxes on my withdrawals of $2.86 million when I retired.
I don't regret the numerous financial mistakes I've made in the past since I've learnt from them. But the biggest one was planning my finances without consulting with a licensed financial counsel.
Indeed, I did make use of a financial counselor. As I get closer to retirement, their advice has been really helpful. I thought compound interest on index funds wouldn't be sufficient because I started late. It's amusing how I've done better than colleagues who have more years of investment experience. I've profited more than $886k tax free.
@@maryHenokNft Please who is the consultant that assists you with your investment and if you don't mind, how do I get in touch with them?
Thanks for the advice. The search for your coach was simple. I investigated her well before using her services. Considering her résumé, she appears competent.
Shut up bot
You guys are men after my own heart. You've outlined how corrupt and unfair the tax system is in this country
They are freeloaders that wants other people to pay their council tax.
Council tax is for local services like schools, social care, rubbish collection and recycling, street lights, police, fire brigade etc etc,
If you live in a community you should pay towards that community.
Those young men have been getting handouts all their lives, now when it's time to put something back they are stretching their necks to find someone else to pay for them.
How very typical of the entitlement generation.
The tax system is unfair when most people are on 16hr contracts they pay nothing in you need to get people working and paying in.
Correct and yet we need to reform the tax system. How do you start when it the system is set up to benefit the ultra rich
Everyone complains the tax system is unfair. The bigger injustice is taking our hard earned taxes and giving it away to those who don’t want to work. Britain has grown into a country of work shy, I want something for nothing sofa slugs.
The rest of us work hard to keep them…. Get those who can work into work, then let’s have a debate on increased taxation. STOP over taxing those of us who do work….! to pay for those who choose not to work. STOP draining our social services to pay for the lazy.
0:23: 📰 The tax code in Britain is heavily skewed in favor of wealth over work, landlords over tenants, and richer homeowners over poorer ones, with almost all inherited capital being passed on untaxed.
2:45: 💰 The speaker proposes various reforms that could raise significant sums of money, such as using property tax to fund local services.
5:46: 📊 The video discusses the difference in tax rates between income and capital gains, using Rishi Sunak as an example.
8:46: 💰 The value of privately held assets in the UK has doubled since Tony Blair came into power relative to GDP, indicating a significant increase in wealth inequality.
11:29: 🗣 The speaker discusses the difference between nominal and real spending, the challenges of cutting public services, and the impact of Tony Blair on the Labour Party.
13:56: 📊 The British public is more conservative on tax policy and social issues than politicians realize.
17:08: 🤔 The speaker discusses the tough decisions that need to be made in politics, including the child benefit cap and tax burdens.
Recap by Tammy AI
Thanks for sharing it! Saving my time with useful time stamps! where you get this AI summary tool Tammy AI??
The mega rich are the issue, the top 1% not the others making decent income with small limited companies yet these are the ones who get hit most and pay in the most tax relatively.
"...almost all inherited capital being passed on untaxed." Classic Tricky Dicky BS we expect from Labour.
Will it be policy to remove the family home provisions? After all, we can't have all those modest 3 bed semis being passed on, can we? They are usually below the threshold now. That's "untaxed inherited capital" after all. Labour has always detested the aspirational working class, so are they going to stick to type?
With 75% of the land stolen from the English people 1000 years ago still in the hands of the descendants, surely it is way beyond time to rectify this injustice? No need to be punitive, just take the estates into public ownership without compensation as 'reparations' for the misdeeds of the past. Hell will freeze over first, even Benn wasn't allowed to mention it.
Widow's pensions? After all, they are funded from "inherited capital" aren't they?
Grandstanding? Smokescreening? Choose to suit.
The country is now governed by an avowed Thatcherite, and the prospective Labour PM is an avowed Blairite, and has stuffed his future cabinet with ditto clones.
Nothing at all will change that favours working people.
I wonder what Penny Mordant's policies will be? The next five years are a write off already.
@@Michael-ur3on the rich don’t own the majority of their wealth in person, there’s funds and firms that own their real estate, their art works, their investments, … , so their children won’t be taxed on all of the wealth. Your mums complete capital/wealth was hers, so you pay 40% on all of it.
Inheritance tax should of never been allowed totally illegal
The government could turn around the country overnight by shutting down the offshore tax evasion and money laundering system. If the government recovered this revenue it would fund the NHS five times over every year and lower the retirement age to fifty or double the state pension. Incredible figures!
The rich will just leave.
Taxes
* Income Tax
* Capital Gains Tax
* National Insurance
* VAT
* Council Tax
* Corporation Tax
* Dividend Tax
* Bank payroll Tax
* Petroleum Revenue Tax
* Fuel Duties
* Vehicle Tax - VED
* SORN - Vehicles parked off road
* Vehicle Registration
* Vehicle MOT
* Inheritance Tax
* Stamp Duty
* Tobacco Duties
* Spirits Duties
* Beer Duties
* Wines Duties
* Cider Duties
* Betting & Gaming Duties
* Air Passenger Duty
* Insurance Premium Tax
* Landfill Tax
* Climate Change Levy
* Aggregates Tax
* Congestion Charge
* ULEZ
Stealth Taxes
* Income Tax Threshold Freezes
* Personal Savings Interest Threshold
* Lifetime Allowance on Pensions
* Parking Fines
* Speeding Fines
* Box Junction Fines
* LTN Fines
* AI Cameras
I’m 18 right now and I’m terrified
😂 you forgot gambling duty 😂
@@SibylleHyde 🤣
It’s number 22 on the list but thanks 🙏🏼 😀
Oops
And many more😵💫
keep in mind that you can't 'spend' the value of your house, council tax is paid from earned (and taxed) income. This creates a problem seen in the US, where homeowners house value ends up taxing them out of the ownership of their home.
This is an amazing conversation between two intelligent, articulate, and engaging young men. I was interested from start to finish. We need more people voicing sensible, reasonable and forward-thinking ideas such as this. Is it not too late to get these guys into politics? Thank you NS for this sort of content. You’ve got a new subscriber.
Thanks, and welcome!
@@NewStatesmanagreed, well done everyone involved
future is looking good but it will take a while...maybe another ten years or so
@@valuetraveler2026 ive heard that for 5 decades almost lol, the only one with a actual feelgood factor for most people were in the 90s
But Globalisation destroyed the nation state democracy decades ago unfortunately.
Would agree , I earn about £1300 after tax per month my council tax is £1260 per year.
Its a big chunk of my already taxed pay.
Blame Thatcher. She brought in the council tax to stop us average folk having too much power.
In the 80s, too many people were becoming mortgage free before they reached 40. They all had numerous properties as an extra income stream.
30 plus years later, most people will die with a mortgage. Her plan worked a treat.
In Italy, I was paying €45 per year on council tax.
Don’t forget all the other taxes we pay as well, how did the previous generations allow this.. they have allowed this take over and now we are finished.
Ever asked your self where that goes?
Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth...
Emotionally-charged decisions to sell off large quantities of stocks or other investments now lock in your losses, removing any chance for future growth.
A 2022 Northwestern Mutual study found that 75% of U.S. adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor.
Very correct; the bear market has contributed significantly to the growth of my investment. I was able to quickly increase my portfolio from $180K to $472K. Essentially, I was just doing as my financial advisor instructed. You're good to go as long as you get competent assistance.
@@JessrobbieWould it be okay if I asked you to recommend this specific advisor or company that you used their services? Seems you've figured it all out.
@devoncampbell275:
I personally have my portfolio overseen by California-based wealth advisor and fixed income strategist at that
'Britney Cohen Rose > Pro' well established and you'd find her professional bio on the net. However I suggHowever look closer to home, sometimes to move certain amount of money I am required to be in California.
I think we are too obsessed about the economy crashing. In the right sense, the economy never crashes. It just undergoes cycles, and almost always recovers. So I really don't care what the predictions are. I just want to grow my investment portfolio. I read that lots of folks are making multi-figures as incomes despite the downturn. Any tips on how to make substantial progress in earning?
Nobody knows anything! You need to create your own process, manage risk and stick to the plan, through thick or thin, while also continuously learning from mistakes and improving.
But the professionals are still crushing it right now because they have both the necessary approach to pull off a profit in the market plus access to insider market knowledge that isn’t made public.
Exactly why i enjoy market decisions being guided by a professional, seeing that their entire skillset is built around going long and short at the same time both employing risk management and market experience, been using the expertise and guidance of John Desmond Heppolette, for over 5years+ and I've netted over $3million in that time frame..
I've shuffled through a few financial advisor in the past, but settled with John Desmond Heppolette. The strategy he use is recession-proof, more specifically profit-oriented, and most likely, you'd find his basic info on the net, he's a renowned advisor.
Thanks for the information! I just discovered his exceptional resume when I made a research of his full names online. He appears knowledgeable and well accredited. I drop him a message and book a call session with him!
I was born towards the end of WW11, spent some years teaching the tax system for the old Workers Education Association. I would simply write a few examples of earnings on the black board and apply the tax system to the numbers. The title of my class ... If folks knew how the taxation system works, there would be a revolution. So no change here then.
World War eleven?? God, I must have been asleep longer than I’d intended!
@@judeirwin2222Lucky you missed 4 but 8 was a corker!
I remember my father complaining, when I was 5 years old, about austerity and how "we all have to tighten our belts". I am now 76! Yes nothing changes.
Should we hope he is a terminator sent from the future to destroy the burgeoning AI industry...?
@@jusw I laughed.
Thanks for bringing light to this. I was astonished that Labour didn’t make any noise about this when Starmer and Sunak were made to publish their tax returns.
Of course, with members leaving Labour -where do you think labours record funding is coming from?
I'm not surprised. There's a reason Labour HQ was always anti Corbyn.
@@shabbydabbydo314 That sentence doesn't even make sense
@@M896 think about it...
No, really, it doesn't. Try writing it again, please.
My only concern with the normalizing of Council Tax to 0.5% is that you'd end up with the same problems as the American schooling system. If the Council halves the tax rate but is a higher-need area, then the area will suffer with a reduced tax take. I assume, therefore, that such a proposal would involve some kind of re-balancing of incomes across councils. It might have been useful to elaborate on that a bit more.
Rebalancing council rates would have a lot of effects. Wages can be lower if rates are lower. There could be more disparity in purchases power between authorities than there already is. Property values are also very dynamic change the upkeep costs substantially and prices will fly off in unpredictable directions.
Completely agree. Avg house price in Burnley is 133k. .5% is around £600 p/a. London’s average is £750k, so .5% is £3750.
If London are paying 6x the same CT, how can Burnley expect the same standard of services.
Landowners would just put the rent up to cover them paying council tax if they had to pay it.
If you follow the American economy,the old adage of they sneeze,we catch a cold,is very pertinent,American property taxes are out of control,uk council tax,potentially rising too unaffordable levels.
Young people like this give me hope for the future. Unfortunately, Britain has been governed for far too long by rich men born into generational wealth, intent on preserving their privilege. Taxing wealth is the solution to a better society, if only someone in power has the courage to do it.
I don't think enough is also understood as to why its a bad idea for the richest part of society to have so much money. It reduces a persons opportunity in their own career to be dropped into a world of the rich. Sure they are happy to let you work as a bartender, a cleaner or an office job but a lot of the higher paying/prestigious jobs are ring fenced for the friends and children of the wealthy.
Ring fenced jobs for the rich….! Do you know how industry works?
I would suggest, higher roles are only available to them because they were afforded private education and a position in the top universities (similar to the two presenters). No business can afford to employ an under-performer, it simply does not happen. However I agree, if you are lucky enough to be afforded a private education and position in a top University, you stand a higher chance of being successful and securing a top job.
This is the only privilege the wealthy have…… and is a product of an our failing education system and ridiculous university costs. Scrap university fees for British people and more have the opportunity of higher paid jobs.
As a 73 year old person who works full time and draws some pensions I pay more tax than Rishi. Wow!!!
Sad indeed. That is why they always say any tax reform is a 'socialist thing'. They have fooled us all for so long.
Respect
More income tax, not tax overall.
@@zuzanazuscinova5209 Oh that’s OK then.
ok
We need more of these people in politics
I daresay they do.. but choose to put their boss and doners in money profit gain
Communists?
Couple genuine questions on the council tax points. 1) won’t linking council tax to the owner rather than the occupier just result in increased rent and difficulty assigning discounts for students and single occupants? 2) if done on a % of home value how would the home value be calculated and how often would it be recalculated?
Tax rates are generally geared towards protecting the wealthy. Some things never change.
uk is not real
Who would invest with high tax returns
We have low investment compared to us so who invests anyway
It is more to do with stopping the poor becoming rich.
I’m self made multimillionaire. Why should I pay more tax?
The tax system of Britain seems to be carefully calibrated to screw over precisely the middle classes responsible for the majority of the country's economic output, seemingly to stop them getting ideas above their station and joining the ranks of the elites by becoming properly wealthy while obfuscating its unfairness (not many people realise the income tax system has a peak marginal rate of 60%, higher than even the Scandi countries. You can thank Alastair Darling for that and the Tories for hanging on to it). My own income tax/NI burden comes out around 40%, once you start adding in the myriad stealth taxes it's more like 50% or possibly more of my earnings ending up in Treasury coffers to fund...something.
Unfortunately, Mr Lambert puts a little too much faith in Labour to rebalance things. I won't be surprised if they wind up imposing a new wealth tax on the wealthy (who can quickly escape the country) while simultaneously increasing income taxes to screw over the middle class (who can't leave so easily) even more, all to fund...something.
Absolutely
great comment
100%. Because the ultimate goal of western elites is the stratification of us, and them. There will be no economic ladder. Simply the sewers and the ivory towers. No in between.
A breath of fresh air. Some clear thinking and a willingness to discuss the deep rooted issues driving inequality in Britain ... and propose solutions.
Where did you get the 0.1% in London figure ?
My understanding is that council tax is based on bands, number of occupants and the estimated propery value from April 1991 by VOA.
For instance, a 250-500k(current) house in London, if both are in band D with 1 occupant is around £1.3k per year, and the owner has to pay it even if you rent it.
Some interesting ideas. However, there are always reactions and responses to changes in tax policy. For instance moving the responsibility for council tax from the tenant to the landlord will simply see rental costs increase for the tenant and no extra tax. The idea of equalising council tax based on property prices makes complete sense (I thought that was the original intention of the tax? I maybe wrong), but would need to be accompanied by changes in central govt funding for councils.
In principle, I agree with increasing wealth taxes, but it's worth pointing out that the UK already raises twice as much tax on property than the OECD average (UK 12%, OECD avg. 6%). So, a realignment, as suggested in the video, should be the focus. The other thing to point out is that the main reason, I believe, that gov'ts avoid increasing tax on wealth is because of the fear around capital flight. The UK is so reliant on private, mainly foreign investment (due to 50+ years of govt neglect, waste, and selling off of our national assets), that changes in this area would need to consider the reactions of private investors. I don't like it, but I believe this is where we are.
The higher the rent, the more valuable the property, the more it pays in tax. Simple raising rent makes it less profitable and property is forced to be less valuable.
Your point is null, georgism ftw
With the English political duopoly system (Labour vs Conservative) it is virtually impossible to change the status quo. It requires a system with many different political parties, each of which has a main topic on the program (e.g. tax). And where the 'tax party' in a coalition government can get its policy through. Other parties with other topics on the program can get their policy through. This is how a society changes for the better. 😉
Your solution shows that PR is a pre-requisite - we can only hope that reform of the Lords with a PR elected second assembly takes away the fear of change for the governing assembly
We need individual representation.
We have the technology..
Does it work though? a brief look at some of the multi party setups around the world shows lots of governments that simply cant get anything done due to lack of consensus or when they do reach major decisions its often done at the price of bold change where interest groups use their bargaining power to water down or change the policy or program to their own benefit not necessarily to the betterment of those its meant to serve..
I don't disagree that what we have now is a catastrophic mess for a whole host of reasons, but one thing a single party majority can get you is decisive action, where the issue then becomes putting the right people in power that align with the actual needs and wants of the populous, something we've soundly failed at for decades.
TL/DR Coalition rule can help stop policy's you don't want being rammed through, but it does so at the cost of holding back policy that you do want to see come to pass in a timely fashion...
@@richardhorton25 can you imagine the peoplewho get voted in tho? they be love island contenstants :/
Sadly, that would require a better form of democracy than currently exists, anywhere in the world. Most countries of the world have a duopoly system, even if it was not intended to be, simply because most people in the democracy are "centrists", therefore most political parties straddle that "centrist" line, with occasional periods of extremes. This inevitably leads to a left of centre party, and a right of centre party, with additional minority parties usually campaigning on a single issue, such as the Green Party here in the UK. The main difference here in the UK is that we only have one party on the right, and many parties on the left, therefore the right leaning party tends to win more elections, as the left leaning parties are contesting with each other for their share of the vote. I understand that there are countries which have a PR type system, but most of those are still dominated by one of two parties opposed to each other.
Unfair taxes for me are
1. Inheritance tax, my father worked hard all his life, lived a meagre existence hence built up some savings to have a good part of it taken away by IHT. He has already paid tax on his earnings, but a double whammy to have it taxed again.
2. Tax on interest on savings previously taxed.
The country is in dire straights financially due to covid, green policies and the fact that 50% of the population are net drains , not contributors to the country. I don't see an easy answer, taxes are unfair undesirable but a necessity.
Excellent interview. Refreshing to have two young guys calmly point out the injustices of the UK tax system without resorting to accusatory or emotive language. We need calm heads, analytical minds to get us out of this mess.
As a middle aged man who has lived through a boom and bust recession, credit crunch and austerity I’ve seen our public sector whittled away and our core services hollowed out. I’ve seen the asset-rich buy their way into a different reality, with private schools and private hospitals. The interests of the country are best served with levelling up and I’d like to see an increase in economic equality. Unearned and unequal wealth should be taxed in a meaningful way.
I'm not always blown away by New Statesman's coverage but credit to them for doing this. I am sick to death of Labour's completely nonsensical approach to the economy going uncritiqued or somehow accepted as 'grown-up politics'. Their approach is completely inadequate for dealing with the inequality that now exists.
Ns went against labour when they promoted policies they now talk about.
What's the Tories approach? Crash the economy and lose 100's of billions a year through cronyism /corruption, Brexit & political skulduggery and general managed decline of the pillars of society which are inextricably linked to the performance of the economy, then bully and steal from the poor to give to the mega wealthy who have more money than they know what to do with and through their spending patterns drive up asset prices while being taxed less than someone on 37k.
Because there is not Tory or Labour any more. They are all part of the globalist uni-party following the WEF mantra of UN agenda 2030.
Aye, the Tories have done a much better job than Labour, and will continue to do so, in the run-up to winning the next GE. /s
@@wolfen210959 Yea good one. You probably believe Jimmy Savile cared about young people too right?
Fantastic discussion! This is why I’m all for bringing in and allowing young minds to thrive.
Brilliant. This should be shown to schools, colleges and Universities so that those entering the real world can understand how the tax game is currently played.
😂 that won’t fit the agenda,will it
As someone who works in the tax industry and used to journalists butchering details, I was pleasantly surprised by this. I think an important part to mention is that when they talk about council tax and CGT etc. they need to clarify that it is about the effective rate in relation the value of their home/gain rather than that the wealthy are paying less (although in some cases I’m sure they are). I might be biased as an Irishman but I think the UK could learn a bit from the Irish tax system, where although there are high income taxes, we at least have a CGT rate of 33% which cuts in very quickly. We also have a gift tax as well as an inheritance tax which drastically increases the amount of IHT that is paid. There are annual allowances (which should by right be bigger) and lifetime allowances. The gift/inheritance tax rate is 33%, not 40%. In addition to help family business and farmers pass things to the next generation there is a 90% deduction to the value of gifts. I think it would level the playing field a small bit.
I completely agree that the taxation system needs to change as Harry explains, but also the loopholes that enable the super rich to move their assets offshore need to be addressed. Also, wealth inequality has increased since the early 80's (neoliberalism). I think that there is a real appetite for change e.g. public ownership of national infrastructure seems to becoming more popular. Water companies pumping sewage into our rivers whilst paying huge dividends, or train companies subsidised by the tax payer running a mediocre service whilst paying billions to shareholders make no sense.
I do despair when people moan about dividend payments to share holders. People have to remember that pension funds fund pension payments via dividend payments. Anybody who has a pension private or workplace is an indirect shareholder's and receives dividend payments indirectly via the value of their pension. What should be taught in school is how to buy shares and create a passive income. School does not teach how money works and how to create wealth. I am sure it would catch the imagination of many kids who under achieve, who see no way but to stay poor working in most jobs. Their ambition becomes to join a gang and make easy money selling drugs. The wealthy do not want the state educated children to understand how money works. They want to keep that privilege for their own children. I talk to many people about share ownership and building a passive income. Their answer is that you understand that, I don't. The reason they don't understand share ownership is because they were never taught how money works in school. They learn how to get a credit card but are not taught how to use and manage credit cards and how to make credit work for them. I hardly buy everything outright with my capital, I use interest-free credit to pay for nearly everything and then use my capital to work for me. Share ownership is not about a quick buck but a long term investments to build dividend payments for later in life and achieve financial security.
@@michaeloconnor9465 I agree, Knowledge of the advantages of share ownership (which is true public ownership) is hard to come by in state schools and it is only when you get to university that you meet people who can help. I suggest people contact the share foundation (Gavin Oldham) who can help.
Can you elaborate on the loopholes you describe? Curious to know, if you were moving abroad (either to retire or for a job opportunity), would you be happy to have the value of your assets (including savings and house sale proceeds) taxed on exit?
@michaeloconnor9465 one man's passive income is another man's enslavement
The wealthy should have the freedom to move their assets offshore, as those assets belong to them. In a world that values freedom, individuals should have the right to relocate if their current residence doesn't align with their beliefs.
Would like to read the whole of Harry’s articles - where can I find it. Such a thought provoking piece xx
Thanks for your feedback, glad you enjoyed the video. The link to the article is in the description.
How does it make sense to base the amount council tax someone should pay depending on the value of thier house?? That like saying you should pay a higher phone bill because your shoes are expensive....
As long it's fair for both sides poor and rich. Having capital gains tax almost half the percentage of income tax is a great example of the system being fundamentally broken.
why should it be fair to rich folk? if i take half a multi millioniars money is he poor? ;)
i work 7 days a week pushing a hoover & mop about. I have 2 jobs one is £15 per hour & the other is £11.50 per hour. I am basically working one job to pay my tax, national insurance my rent & council tax.
The reason for the backlash against Globalisation. The income and lifestyle any job can provide a person is ceasing to be determined by the country they live in and the norms of that country, and increasingly now by the 'Global' average lifestyle for that job. Well done for being a cleaner, it's a valuable and important job, but say India with its approximately 20% of the global population. Do you think the average cleaner in India lives the lifestyle of a working class person in the UK, possibly a 'proper' place to live, schooling, public health services, possibly a car, a holiday, a smart phone a holiday? Or do you think they live in abject poverty in a slum?
On CGT: Problem might not be the lower capital gains tax, since everyone is taxed the same CGT, but the opportunity for people to control capital in the first place. If you buy stocks, and sell for a profit, you pay the same tax as Rishi. Everyones' pension, for example, is invested into assets.
3 points,
1 - Although Council Tax is calculated on value of a property it’s used to pay for services provided by Local Authorities that the occupants of said property use, such as refuse collecting, Policing, Fire Services, Social Care etc. etc.
2 - Removing the burden of Council Tax from renters (that use said LA services) doesn’t lower their actual ‘tax’ liability as landlords will just hike rents if another financial burden is passed onto them. This then makes renting even more expensive.
3 - The problem with the 0.5% flat rate Council Tax is that if I live in London and bought my house at value X and it’s tripled to value Y I would be disproportionately affected given my wages hadn’t increased by the same amount to pay the increased rate of Council Tax.
I’m therefore bearing a bigger share of the tax burden, by virtue of unrealised gains in asset value, compared someone who lives in Burnley where house values may only have risen by 10% in the same period.
I think what you’re proposing is not actually targeted at the people you’re talking about which is generally the super rich.
Another well intentioned but not really practical proposal for the majority and probably why Govt’s and Opposition parties are not in favour of it.
I think if these ideas were to be applied be across the board on ordinary working people what you would actually achieve is a race to the bottom 🤷♂️
There’s better ways of taxing wealth than these ideas
Until we have a transparent system our economy will never thrive. I am getting old, I can still remember Lady Docker flaunting her gold- plated Rolls Royce. This has been going on since the early 1950s. None of this would be reinvested in industry, instead swept off to off-shore tax havens. Grossly unfair to employees who generated this wealth.
You forgot to mention her private yacht. It’s been going on much further back than the 1950s and much of the wealth that built so many of our 18th and early 19th Century National Trust properties and private stately homes was derived from income from the slave trade (e.g. Capesthorne Hall in Cheshire).
Employees don’t generate wealth. CUSTOMERS do.
Canadian fan of the program. This was one of the best videos NS has done for youtube. Mr. Lambert took the audience through the major taxation ideas for their consideration at the next election. No other UK media outlet has done the job he did. Interviewer asked great questions. On all the other media channels, focus is often placed on comparison of UK to G7 or EU financial results. That would be the only minor criticism I have of this interview.
I'm Australian, and agree completely. This is a conversation that needs to happen in all countries with ageing populations, growing wealth inequality, and unattainable housing expenses.
Agree as well as a Canadian living for the last year in London and seeing so many similarities on how inequality is getting intitutionalised.
I’ve got a property asset which I took years to contribute towards, I have a low but reasonable rate of pay. The tax system is so unfair. It’s going to take a lot of what I’ve worked hard for. Yes the property has gone up but the money is almost worthless. They have caused the financial crises and inflation by printing money for their own means
Freezing tax thresholds is a tax on the poor ,they should be ashamed
Politicians have been using taxpayers as cashcows for decades. Lib/lab/con all help themselves to taxpayers money.
No just the tories giving big tax cuts for big corporate businesses and the wealthy and higher payed since 2010, and at the exact same time slashing funding in real terms adjusted for inflation for all public services to its lowest levels in in well over 40 yrs or more. And screwing the rest of us basic rate tax payers etc
An extremely engaging conversation, very well presented by two gentlemen who clearly have a grasp of the tax system. Have they put there ideas to the incoming government? You have men gentlemen as a new subscriber, thank you.
Relying on Labour for any sensible solution is naive in the extreme. They’ve only ever made things worse.
The UK tax system just encourages evasion !
All tax systems encourage you to use the law to your advantage. Tax system aims to encourage economic activity. The average working person can reduce the tax they pay by paying into their pension more, investing into S&S ISA that is free from tax, and there are lots of ways to reduce your tax burden legally as a ltd company. The average person can do all these things.
Especially by those people who preside over it.
Great piece! Unfortunately, many politicians on both sides of the fence are part of the "asset class" and consequently, they don't want to implement real change to taxation on assets. It's the same here in Australia, where the ALP merely tinkers at the periphery, but won't really hit the upper end of asset holders as hard as they should.
We should be seeing this conversation all over the media! I would love to see this get real traction, because although I'm keen to see the tax system become more fair, I've never heard a way suggested that the media couldn't spin easily to rile up the type of aspirational tory voters/gammons who vote outside of their own interests. Great to see. Honestly a shame that you're not standing for election.
Very well explained ... ultimately the rich are the people who write the tax laws...
Having poorer areas pay less council tax and richer areas pay more would just mean that the poor areas would get less local government services, wouldn't it?
I lived in the USA and one of the deep deep inequities in the USA is that schools are funded by local property tax. So poor areas have the worst schools and that keeps those areas poor.
This would do the same thing but with social care, homelessness prevention, local leisure services, adult education, the arts and music, children's and youth services, etc etc.
The central government in the UK essentially regulates and controls the council budgets and already effectively redistributes the funding. It's a different system from the US (which itself varies at the state level). So it's already being centrally managed, it's really just where you turn the dial...
Also lived in the US. The local nature of property taxes is only one of the major issues with it.
It's a tax on what's is most people largest none liquid asset, that they have no control over it's value or ability sell a fraction of the asset to cover the taxes.
So what happens is people are priced out of there own homes, because they buy a cheap house, there is a housing boom and they can no longer afford the tax bill. There left with no choice but to sell and relocate to a cheaper area, as they don't have the income to cover the tax.
Then there's the issue that taxing someone on the value of there property, requires defining the value of that property. The US local authorities spend insane amounts of money doing this yearly and basically every property owner argues and fight the value. Which is just a massive waste of time and money.
It's just a very stupid way to tax people. The UK council tax is much more sensible system and it would be much better to adjust that, add more bands, adjust how properties are assigned to bands, making the band pricing more reflective of the local situation etc etc. Than go to the regressive and flawed US style system.
The U.S is effectively a third world country. For every billionaire there are thousands of people living on the streets in defacto refugee camps. They are the perfect example of inequality.
they’re all going bankrupt anyway 😅 the councils were investing all their money in real estate I guess
It's an interesting idea, but I see a couple of flaws:
1. If councils in poorer areas are currently effectively charging 1.5% of a house's value for council tax, and London is charging about 0.1%, surely if you change it to 0.5%, poorer councils now have less money and London has even more. Doesn't feel like levelling up much.
2. You assume that an increase in the value of an asset equals an increase in the amount of money the owner has. I bought my house for £90k in 2000, it's now worth £300k. I earn less now than I did then. The increase in value of my house only exists when I sell it, and then I need to buy somewhere else to live. Somewhere else that has also increased in cost. The money doesn't exist.
I'd probably propose councils sharing out the council tax raised around the country, so richer councils get the same as they do now and poor councils receive a 'subsidy' as such.
When a property is your main residence you don't pay capital gains on it when its sold if you buy another place. You only pay stamp duty on the new property being bought. It would affect wealthy buying a selling property that isn't main residence and also their shares in stocks or any other asset they sell at a profit.
Councils don't receive the money that is raised in their area from council tax. Council tax goes to the UK central government who then give a proportion back out to local councils which isn't necessarily reflective of the council tax base.
This is cr#p!
You seem to miss the fact that people have quite often paid income tax to create their wealth.
If investments have made a capital gain they have taken the investment risk to achieve that gain.
We all have access to the same services regardless of the value of our house.
The main problem in the UK is too many on benefits that shouldn't be.
On paper all ideas are brilliant, when you come to implement them, most are not viable.
Ok you remove the renters from paying the council tax - What will the landlord do? Pass it over to the tenant, meaning rent increase.
Just like Business rates (from ANY business) are passed over to consumers.
@@user-vm7eg3jc4e Have you got anything to back that up? If it's true, why do councils try to increase their local council tax to make up for funding shortfalls?
Imagine if local papers covered council spending.
Yep.
The problem I foresee from increasing capital gains taxes is that it would incentivise people to hold onto assets more to avoid those higher CG taxes
Personally (in case we have something to cut) I would prefer to merge (abolish) the NI (both employee and employer) and income tax at first, as I consider the NI tax as deeply amoral - (1) two taxes - NI and income tax on employment/labor; (2) using PAYE - those 2 taxes are already payed together (they are not separate in actual payment); (3) NI is a cheating tax, as the society should educate people about taxation, rather than hide something under the carpet. After merging, not only the real labor tax becomes explicitly visible and comparable to capital/assets taxes, but it also shows a clear opportunity to cut it. Coming to a council/ property tax, as it is proposed to be based on the property monetary value (i.e. 0.5 %) anyway, I would suggest to think about LVT instead, as I believe it might be more fair.
I think another idea is tax increases on the rich are to be used on things that benefit both the poor and the rich, so spending on infrastructure that is near to where both the wealthy and the poor live, I think it makes sense to get the rich on our side
As someone with an economics degree and now a retired chartered accountant, I have heard most of Harry's ideas for change before, albeit maybe in a slightly different context and sadly it seems a bit like Groundhog Day. I feel that the nut the Labour government tried to crack in the 1970s by bring in Inheritance Tax (with exemptions for family-run firms and farms) seemed a good way forward, as the rates were higher than under the previous death duties regime. This was watered down when Thatcher came to power and has never been reinstated.
One issue is the number of loopholes that our complicated tax system throws up that wealthy people can pay accountants to exploit on their behalf. We also need to work out a better way of stopping people moving wealth overseas (except for genuine investment) and that may mean punitive taxes when the money is repatriated.
We also need to have a tax that is more akin to Capital Gains Tax than Stamp Duty when people move house. That needs a bit of fine tuning to avoid innocent people being hammered but successive policies have just resulted in house prices escalating wildly in my lifetime to the point where young people can't expect to own property or get a mortgage until they are middle-aged.
I could go on but the more I think about the more I realise that the UK is being governed by people who are pandering to a small proportion of the population and the rest just have to lump it.
The problem of the 'cliff edges' at the 20% and 40% tax boundaries needs be addressed.Restoring the 10%tax band can help those who at this time are just in the 20% band. Yes. there are some people in both situations. The myth that people in the 40% band are wealthy needs to be skotched in toced to pay higher rate of tax now through current tax policy.d as many ordinary people who would not clam to be rich are being forced into higher tax band by the current taxation system. Any scheme aimed at taxing wealth needs care and discernment else people who should not be are hit disproportionally. Many people who own their home or have a mortgage are not wealthy. They are often asset rich and cash poor.
Only the amount over the threshold is taxed at that rate though. It’s not as if you cross the 40% threshold and then the entire salary is taxed at that amount.
While I agree with the broad sentiment, The idea of paying 5 times what I currently pay in council tax simply because I live in London is insane. It would make it impossible for me (and many others) to live here. Also, if the burden of paying council tax were shifted onto property owners, they'd simply hike rents up even further so they don't have to take the hit to their bottom line - thereby pushing even more renters out of London altogether.
All these kinds of ideas need proper scrutiny to ensure that they actually end up having the desired effect. A huge part of this whole problem is that wealthy people tend to be very good at finding ways to protect their wealth. You'd need to pre-emptively close all kinds of loopholes that probably don't even look like loopholes right now, because no-one is using them.
You'd also need to find some way to drastically curtail people's ability to squirrel their wealth into off-shore accounts and such. Again, I agree with the sentiment but I suspect it would be quite challenging to actually make any of this happen in a way that is meaningful and fair.
This is wild! There’s barely a difference between torries and so called labour, to hell with them all. It’s the perfect time for a party who actually care about the people to emerge
In a first past the post system, your best option is to support the least worst viable option. Anything else just helps the worst viable option.
If you want to support more nuanced parties (rather than broad church parties like Torys and Labour) and expect them to have any power, then you need proportional representation first.
There is no one single party on the face of the earth who cares about the people, human beings only care about themselves not others !
The council tax was a poor choice to use. It's a tax to provide a (local) service its not linked to house prices but the but a snap shot value to determine its 'volume' in a local area. If you start charging Landlords they will pass it on to the tenant as rent just as with cleaning fee's and deposits supplemental rent increases. If you want to address council tax then re-banding is where you need to look. Properties that have be extensively extended only get re-classed once they are sold, this means you could be paying two bedroom council rates on a 6 bedroom house.
IMO tax avoidance is where they need to start, those top 1% who have the wealth to make it worth while to pay a legion of accountants to legally shift money around to erase any taxation. I don't find money vulgar but dodging all tax on income very much is.
I had to do some tax planning (on behalf of someone else) recently I had a team of experienced tax accountants holding my hand and honestly it felt more like something out of Monty python sketch with secret rules and triggers. Really insane space to navigate, impossible without people who know and charge accordingly.
If labour were really brave they would commission a complete blank slate tax rethink. Transparent, Simpler, fair, apply to all while not purely to clobber the rich (think that would make the UK unattractive place for business). It shouldn't require a PHD in masons handshakes and a 1st from Hogwarts to do sensible tax planning
Fantastic conversation. All the points discussed chimed with me. We must tax the wealth and asset class to redistribute more fairly. This will restart economic growth. You have a new subscriber
The problem with a blanket property tax is they're paid locally, not redistributed. Paying 0.5% in the South just means better services in London, paying 0.5% in Burnley means worse services in the North. It also necessitates a massive annual round of property valuations - like writing the Domesday Book every single year!
My sis pays 60 Euro council tax a year in Belgium. You pay separately for your bins and recycling. The more you pollute the more you pay. Simple
Excellent work New Stateman - Come on Labour you can be better than these Tory leaches. Economic justice now!
Labour voter all my life. Now voting conservative because there is no difference. Might as well give it to the OG.
@@pacman7959 ✌Tory Troll.
If I had one policy I could implement into the uk tomorrow it would be that NOBODY is allowed to own more than 2 houses. This whole thing boils down to greed, and the unfair nature is why the economy and young people are so destroyed in modern society.
Great conversation. I've read a few New Statesman pieces in the past but this video persuaded me to subscribe.
Absolutely spot on analysis I don't understand why these ideas are not being hammered home by Labour.
Really have you been listening the past 30 years labour don't care about the working classes
The leader of the labor party is just a rich person too with income from capital gains. Not as rich but he certainly benefits from the current system
Look what happened to Corbyn, the public rather have BoJo than any radical shift in tax structure and infrastructure spend. We’re getting what we voted for, not sure why people are moaning.
Corbyn lol million pound house in London MP pension and wife has a sweat shop in Mexico the your corbyn
Labour is no different from the Conservative. They are both in the same bed
On the plus side we have by far the largest tax free personal allowance in Europe, but the de-linking of allowances and tax bands from inflation when we have 10% p.a. is a serious kick in the teeth....... The german constitution states that the basic cost of living should be tax free, german tax system is no where near achieving that , but would be a good base for the personal allowance in the UK , then would have to be more like 20k/annum with appropriate additonal allowances for other adults and children supported.
Agree, but reducing the burden of taxation on regular income needs to be offset by raising that tax revenue somewhere else, which is what Harry Lambert is suggesting could (and morally, should) be increased taxation on capital (wealth).
One of the most awful things the tories do is they give a perecption that public spending is a burdensome expenditure rather than a ethical mandatory action. More than 10 years in power and I'm sure some of the working class themselves even feel that way now. It's very sad to see. The bankers, finance industry and top 10% definitely believe so.
On the CGT point- Assets are risky. You may lose your job but while you’re waiting to lose it you’re being paid every month. While you’re waiting for your assets to appreciate or depreciate you’re courting long term risk and market volatility. Asset taxes are lower because the risk is significantly higher.
But if don't win, you don't pay.
Surely if tenants don't have to pay council tax it will just get reflected in their rent instead?
In addition properties that in London would overnight lose half their value or more.
The problem we have in the UK is compound taxation. Based upon your proposal, its tax wealth instead of income, ok fair enough, but what about all the other taxes? Council Tax, Road Tax, Stamp Duty, Duty on Cigarettes and Alcohol etc. What we need to do is simplify the Tax System so people understand their total tax up front, with no hidden taxes, and then appreciate the absolute waste in Government. If we had a simpler tax system for Business & Income/wealth, that would make more sense.
Agreed.
You forgot the TV tax
Agree , we were supposed to abolish V A T when we left the E U , seems the average people haven't benefitted from either being a member of the E U or being out of it , when we were in we didn't have much of a say , but we payed the second largest amount in , now were out everything has gone up even more , really can't win .
There’s a thing called the Overton window which restricts how fast and how radical changes can be. Any tax change creates winners and losers so it’s very dangerous for a government to stray too far too fast from what has already been normalised. Liz Truss discovered the Overton window in her brief tenure of No 10.
Yes but no but. You can consider them stealth taxes, and sometimes they are, but why should I pay the same amount of fuel duty [edit: should read 'Vehicle Excise Duty' not 'fuel duty'] on the 5000 miles I drive for work a year as someone who drives 20000 miles a year when I don't pollute and wear out the road as much? Why should I pay alcohol tax for alcohol I don't drink etc etc?
The point of some taxes is that they help encourage other behaviour, or raise money which could be used (note I said 'could') be used to mitigate the negative effect of certain actions. Alcohol causes cancer. Smoking causes cancer. Neither have any real health benefits. Is it a good idea to use tax to try to make them less affordable? Should tobacco taxes be used directly to help improve certain NHS departments for those affected? But what if giving up smoking and drinking is easier for the privileged among us and does it become a tax on the poor?
Hmm. This whole redistribution of wealth is more complicated than I thought, said Dennis Moore.
I agree that the burden should be shifted from income to wealth tax more, however I think the tax burden should be moved onto the currency itself. Tax all GBP accounts over £1million 1% a year, even in the tax heavens, then distributing it between all counties that use the currency based upon the population numbers. It would be a minimal tax for people and businesses that have these accounts plus it’s less than the charge rate they would pay to transfer to another currency. There’s so much money out there through decades of growth from the GBP that should be tapped into minimally at 1% but could totally transform the tax burden for all people, working people or the wealthy class.
I agree with increasing the capital gains tax. The thinking is in lines with many major economies who have a similar policy wherein capital gains tax is aligned to personal income tax bracket. But, having said that the lower capital gains pulls in more investors into the country who see this gain. If we streamline taxes what is your expectation on the drop in this money and final tax collections? If this drops after the introduction the policy woukd have failed. And then there are secondary and tertiary repercussions...any view please?
Here is why I’m against any new taxes despite not being wealthy. It ALWAYS starts off as a tax on the ‘rich’ yet years later ends up as a tax on the average person. Show me one example where this is not the case.
If the "average person" makes substantial income from their invested wealth, then I don't see a problem with that. It's a capital gains tax, it should apply equally. It's just that it shouldn't be taxed less than working for a living. Tax income as income.
Nobody is talking about new taxes, it's about changing the rates for existing taxes so that the wealthy pay more. There has been an asset boom over that last few years and much of the wealth has gone to people with assets from people who work.
Stop your government giving your taxes away to other countries and involving the country in war overseas then talk about increasing taxes
@antonymossop3135 yes and no.
If you have a salary you get that every month that you are employed
If you invest anything the upside potential is very variable so you au least need a proper offset in place for when you score a loss.
This is such a lame view of capital gains. In an scenario of increased global mobility, it is easy for capital to move out of the country. Capitalists drive this economy. Here I refer to data not some opinion based on emotions. I say CGT should be lowered to attract capital and drive the economy further. People are better off paying taxes in a growing economy. Paying higher tax on a higher income is better than paying lower tax in an economy in shambles
Me and the Mrs are in that awful 'just in the 40%' tax bracket. It's an absolute aspiration killer, because you've either gotta smash through it and earn a lot more, and or its really not worth bothering with. And that's where we are at. Why take a promotion with more work, stress, etc. We used to invest money but why risk it when if you dare to make a bit they will hammer you for 40% of tax. Why put in some overtime at work to give half of it to the government. Why try and accumulate any wealth to get smashed with a inheritance tax bill?
Imagine having an undergrad and masters student loan on top of that. An extra 15% makes that about 58% tax over 50k. Absolutely insane.
This problem of stepped level taxation affects aspiration and survival for both personal situations and business .
Three times I have grown a small retail business, only to find the vat threshold unconquerable.
Suddenly reaching a stage where 12% of your turnover becomes tax ( 20% less any input tax) means that what used to be your earnings just disappears overnight.
I agree that additional taxing of assets rather than taxing work seems more sustainable.
That's not how the UK tax works. You'll only pay 40% on the amount above the threshold, not the total value.
You'll still be earning more than someone in the band below you. Saying otherwise is just a lie, and serves the rich's interests.
Indeed these young guys would further tax your hard worked for investments and responsibilities taken. You do the simple work / life balance calculations and decide not to improve your positions. That’s the rub, tax the risk takers and responsible and you kill the economic drivers. IMHO
Highly unlikely you’ll ever face an inheritance tax bill, it effects a tiny proportion of estates (anything over £1 million).
Percentages can appear deceiving;
1.1 % of 60,000 = 660.
0.1 % of 100,000 = 10,000.
Additionally, if a worker is offered a 1% pay rise every year, but then asked to accept 2% every two years, then the worker will be receiving less with the higher percentage.
Yeah we have that model in Australia too. I'm asking for Govt to turn off age pensions, superannuation tax concessions and aged care/hospital/palliative care off at age 80. Argument being those who didn't have superannuation system and retired at 50 have had 30 years off taxpayers. Those who have had superannuation system have had working age tax incentives and are now putting hands out for age pensions, healthcare cards to get discounted council rates and free healthcare from 60-100. Why should the young pay that? Why are we subsidising investor mortgage interest payments at all. They are not providing affordable housing so not delivering a product for our economy. We have this farce where people are retiring at 45 and living off rental income, taxpayer funded tax refunds, free superannuation withdrawals and then use Trusts to access taxpayer funded age pensions, healthcare cards, cancer care, hospital elective surgery, palliative care when many of them didn't pay much tax in working age, or the Medicare Levy, pay zero in retirement but take so much in old age. I'm not young anymore but I see this rort and what it's doing to the young. It's criminal that they can behave like that. They have no ethics or morals. So I'm calling for Govts worldwide, take the punchbowl off the table at age 80. 80 years living off taxpayers is long enough!
This is exactly the sort of conversation we need to be having. Inequality has damaged the cohesion of this country beyond measure. Continuous growth is a planet wrecking pipe dream.
I'm all for taxing wealth but where is the line. Those below £1m in assets don't pay? I'm a working class 29 year old who has 6 figure equity portfolio that I've worked/saved hard to accumulate. Would I be in the firing line?
Taxation is so complex it needs to be massively simplified to make it easier and fairer to implement
Totally agree that property taxes should be levied on the owner, basically a land value tax.
Tax land not income or capital gains, you then incentivise wealth creation over rent seeking.
Some good points in the video, but disappointed that there wasn't any mention of the potential for a Land Value Tax. It's the most effective form of wealth tax, since it can't be dodged by simply moving the taxed assets abroad - land can't just be moved away. It should replace any property tax because it doesn't discourage the development of buildings, rather the only thing it discourages is speculation/ land hoarding, since sitting on an empty home or lot and profiting from its future sale wouldn't be viable if you had to pay a big tax on it. For this reason it would also open up the current supply of housing somewhat (although probably not enough to fully solve the housing crisis, it would help). Under a 100% LVT, landlords would only profit from the quality of service they provide to tenants, rather than also making unearned money from the value of the land they own. They would not be able to pass the LVT on to renters because they already charge what the market can sustain - people can't pay any more for the same house/flat. Farmers wouldn't be affected because a square foot of farmland would have a much lower valuation than a square foot of land in a city. The only tricky part of this tax would be continuously reassessing the unimproved value of land, but it's done in other countries where this tax exists like Denmark and Estonia (though some sort of market-based auction solution might be preferable).
Overall I wish there was more talk in Labour circles about conducting potential trials of this, because if found to work it would really improve the efficiency and progressiveness of taxation in the country at time when tax reform is desperately needed, as the video pointed out. And something like this could easily find support from all corners of the electorate, as it both promotes more productivity *and* is a plain fair and progressive tax. Politicians would just have to be explicitly clear in highlighting how homeowners would be protected, since house prices would fall due to the sale price of the land the house is on falling (because it'd be taxed).
Would this exclude the Royalty? perhaps, the new Statesman does not talk about this because it would eventually have to answer hard questions on how much acreage the royalty squats on.
NO tax is fair as it is theft.
Whilst moving Council Tax away from the tennant and onto the owner sounds like a good idea, there's not really anything to stop a landlord from raising the rent further to 'cover the cost' of that additional fee.
He would have to increase it by more, to cover the risk he is now carrying if a tenant fails to pay. So ultimately it costs the good tenant more.
Of course - this would happen to start with but the purpose is that homeowners pay for houses regardless of occupancy. If you have no tenants nobody is paying that tax today. If instead the landlord is on the hook regardless of if they have a tenant, they have greater incentive to fill the house, which means they have to compete harder for getting a tenant quicker and means there is greater supply, lowering costs overall (and giving local authorities more funding from the revenue raised on empty properties)
Capital Gains Tax in btl properties is 28% if you are a higher tax rate payer. It has been reduced in the new budget to 24% tax rate.
Theres much more seriously unfairness within the tax code that never gets talked about. People on zero hrs contracts like cleaners shop assistants who are already on low wages are more likely to have 2 or three jobs. Having more than one job in reases the amount of %of tax they have to pay. Even though they are doing say 40hrs at a low wage.
Another example is someone earning a 20% taxable full working week job who does extra hours to earn more, when they go over the tax threshold they have to pay 40%. This example is more common as places are understaffed, and its usually service jobs where people are already working hard for thier money, paramedics, utility workers etc.
Excellent video with an intelligent approach to the UK's grossly unfair tax system. However, I have two quibbles:-
1. Only the top 1% pay capital gains tax? I have had to pay that on occasion yet my accumulated wealth and income are modest by most people's standards.
2. Understanding the tax code system would make the scales fall ftom people's eyes? Am I missing something here? Are we talking about the PAYE tax codes? Or have I jumped to a wrong conclusion? Because I don't think a better understanding of how PAYE tax codes work will lead people to demand a shift to taxing asset wealth and away from income.
It's just socialist lies wrapped up in a thesaurus of words.
If there’s no advantage to creating wealth and taking more risk than someone paid a fixed salary - what does that do to the incentive for entrepreneurialism and creating new businesses. It’s the politics of envy. We need to encourage risk takers and people to invest to create businesses and new jobs. Not more hatred of those that are successful and an increased dependence on the state from the individual
It's just not fair. I'm a nurse who pays the majority of my wage on tax, watched my taxes rise over 13 years and had 13 paycuts in a row for 13 years. Meanwhile rich people pay next to nothing because they can use accountants to buy things against their tax bill. Why can't I on PAYE get £15,000 out of my salary tax free to pay for my car/fuel etc? Why does PAYE need to budget everything after taxes while those on capital gains are allowed to spend their money and then pay tax on whatever is left?! It's ludicrous
What is the moral and or ethical reason we tax capital gain tax lower than income tax rate?
As a Scottish voter, I view Labour as Tory lite, and I do so for the reasons put forward in this conversation.
Thank you for the calm and reasonable conversations that are becoming a signature of NS coverage.