Dollar 💲numbers are not ACTUAL physical assets. The only thing being discussed here is the financial bartering capability of the government being increased over that of the "asset" holder.
Most assets can leave. Are you going to ban/tax foreigners for the value of shares they own in UK companies or hold in UK Govt Bonds,for example?. If you only tax UK assets are you going to effectively force UK savers to invest in foreign assets instead? Someone looks like they have skipped Adam Smith and jumped straight in at Piketty. The Govt are desperate for people to invest in UK companies to try to jumpstart growth. Putting off foreign investement would just increase their shortfall further.
In the same way £700 million of Sunak’s wife’s Indian based Infosys shares wouldn’t leave the UK as they were or would never be here in the first place to be taxed.
We lost 12500 high net worth individuals between 2017-2022 over 3500 in 2023 .And more will leave due to the new Labour government.A large percentage of these individuals are not uk nations and some are and have given up uk citizenship. These assets can be sold to major companies or individuals and invest elsewhere.
Before the election I made a concerted effort to ask my local candidates their position on taxing wealth. What I found most shocking is they had no idea what wealth means and had the same understanding that if you tax them they will leave. Great video Gary
Yes my Dad asked this question and our local MP didn’t seem to have a grasp of it. Very eye opening! Glad she replied though. Think I’m sending this video as part of my email to her.
Same, shocking how little the representatives of government know about how the economy functions. No wonder lobbies have so much influence, politicians are completely gullible and uninformed.
I’m not sure how much this should be pushed but from the sounds of it perhaps tax the rich should be replaced with ‘tax the owners’ or ‘tax the assets’ to shift the focus from the people to the asset and remove personalisation of the tax and almost make the pill easier to swallow for the layman who is going to ask “wont the rich just leave”. Then again perhaps the spot light does need to be shed on the people who own so much. Either way hope the message and education of this channel and movement spreads far and wide!
I used to work in Private Wealth. I used to report on private equity. People think they're going to work their way to those levels of wealth. They're wrong, you can only own your way to that. People have a soft spot for money, even when it's being used in a way that is causing harm to them. The political strategy on this issue needs to capture that.
@dellwright1407 majority of the UK rich list is earned wealth not inherited.. its the same everywhere. The so called rich people are looking for are actually themselves who end up doing very well. We should be taxing every man women and child until no one can ever be rich ever again!
I agree, just look at the price of property. At one point it was rising 10/12% per annum in London, on a large house in a nicer part of town that’s £120/200k per annum on the value of a home with an average median of wage of +£30k? It was impossible in my younger days to save enough to keep up with the rise in prices, making it impossible to raise the deposit required. Same can be said for investments with the S&P benefitting from the absurd amounts of QE post 2008. If you had the capital you could expect just under 11% per annum. As the saying goes “money goes to money”, someone with an inheritance of £100k would make £10/12k per annum during a time when median salary was £30k, how does one keep up with that over the long term? Wealth inequality is the single biggest issue facing society, it’s the reason that those earning decent livings still feel like they’re falling behind (and they are), why the middle class feel poorer (it’s because they are relatively speaking).
Would you include farmers, who may own a lot of land, but work endlessly producing food? I think that's an asset that needs encouragement, otherwise we'll cover the place in solar panels and have to import food from god knows where 🤷
There's two categories of people in the world. People who work for their money, and people whose money works for them. Of the people whose money works for them, there's a smaller subset who have enough money working for them that the assets underlying that money will inexorably multiply. These are the people whose income is generally in the form of capital gains or dividends. Now, in the US, cap gains are generally taxed at 15pc. Dividends are normally 15pc, or 20pc for dividends totaling over half a million. The rate on income varies, but the marginal rate for a worker earning 50k a year (a rather modest income in the USA today) is 22pc. Meaning our hardworking plumber or whatever is paying MORE percentagewise than a trust fund kid who uses his income stream to buy up yet more assets. And it is (generally) far harder for the workingman to find tax avoidance schemes. Your employer deducts the taxes before you get the cheque. This is a recipe for increasing inequality.
Gary, in NJ, US, here. Your work is a godsend, flipping manna from heaven. I've been trying to explain these things to folks I know since 08 washed many of my friends out of their houses, never to return, and too many since are now simply deceased. Your success in the financial sector, your grasp of the underlying mathematics, your background growing up rough, make your explanations brief and uniquely clear. Good friends I've tried to explain these things for decades, hear your explanations and walk away with a coherent grasp and moved by their new understanding. I cannot tell you how important what you are doing is. I grew up working class here in the US, I managed a good education and I'm ok, barely. But so many I know are not. So many in my age cohort are dead while their parents are still alive. I guess if I would add anything to what you say, it would be that the poverty we know is growing everywhere, it's lethal. Folks need to know that.
With you all the way here sir. Gary's videos are an oasis of sanity in the wild insanity of social media. I'm heartened that a fairly regular bloke (albeit with a definite gift for communicating) talking about this stuff, will likely have a million subscribers before long.
wealth tax is better in every regard than CGT and IHT. you pay it yearly, making it less "painful", yet effective. It's difficult to hide assets, it's easy to hide gains. it involves less administration as the state does not need to track your assets and prove gains, just state what you own now. It encourages investment, as you must now at least outperform inflation and wealth tax together.
Isn't it paid almost entirely by working people with the super rich avoiding it by being non domicile? Swiss banks are rather famous for being good at hiding assets...
you tax them on what they have in Switzerland, not their assets in other countries because that's under a different jurisdiction. Gary is saying let's tax someone in the UK who has house in Switzerland, so the Swiss person pays tax in the Switzerland, and then a tax in the UK for being Swiss.
Gary commented previously on how the rich will leave bonds and start buying assets. Well supposedly Blackrock (asset managers of the wealthy) have done a deal with a UK housebuilder (c.£1.4 Billion value) to buy 4500 houses solely for the purpose of renting them out, and no doubt are looking to buy the houses being off-loaded by buy to let landlords as well. I think the important thing to remember is that these people don't think like you and I, they won't buy the houses to make some rent for 10 or 20 years, then sell it at a profit, they'll be looking to buy them to own them forever, generationally, so when you realise that you can see that as they replace the buyer side of the market, they won't care if they "over-pay" at today's market rates, because in 150 years time when you consider the rent they've taken and the capital appreciation, their descendants will look back and realise what a genius great, great, great grandpa Goldsmith was. We're heading for serfdom.
Yep, everyone hates the 'Mom and Pop' (Mum and Dad) landlord due to jealousy, but they'll hate the Blackrock brigade even more when it sinks in how useless they are and how little they care about their tenants.
@randomrandomness8743 Nothing to do with jealousy. It's to do with the obscene rents vs wages, it's to do with the extreme insecurity of tenure and about the very poor quality vs price. Serfs HATE being serfs no matter who their domineering master is. ps I own my house outright.
Can't Blame them for making sound financial decisions. This generation need to up skill to be able to afford houses and planning laws need scrapping. Independent fair system maybe even AI and not corrupt slow useless city councils.
Basically the proposition is not "tax the rich people that live in your country," it's "tax the assets they hold in your country." They can leave, but they can only sell their assets if they want to extract the money held in them... To someone else who _would_ pay the taxes.
@@user-nz8tz1vq2f Investment has nothing to do with tax and everything to do with business opportunity. If people have no money to spend because their money is being spent on mortgage, the national debt, bills, etc, then there are no customers for businesses and so businesses can't survive so therefore do not start. Cutting taxes for the rich does nothing to generate customers for business, so the rich still aren't going to start business, what they will do instead is buy property which pushes prices up for everyone else and means people have even less money to spend. That's why cutting taxes for the rich doesn't grow the economy. What grows the economy is making sure regular people have enough money to spend so that new businesses can meet the market demand and survive. The tax rate businesses pay is irrelevant as long as they can make the money back through their customer base. If businesses can sustain themselves then that is what leads to more investment. Money is supposed to circulate, not accumulate. When it accumulates, that destroys economic growth and that is exactly why the UK hasn't had growth in a very long time.
They wealthy won't leave the UK because technically they're not here anyway, they're ghosts on paper. Their finances and assets live in an offshore systems that's so complex it can't be unraveled and it can't be traced back to them. So, how do you even begin to tackle that.
@@user-nz8tz1vq2f ...What, precisely, do you think the taxes are _for?_ Anyway, right now the money from the assets are leaving the country _anyway._ That's where the profits go.
This video couldn’t be clearer. Thank you Gary. I hope all the regular working stiffs in the comments, simping for multi-millionaires of the rentier class understand this too.
@Hiberno_sperg Please explain how the economy isn't already shrinking due to asset hoarding millionaires...and how do they contribute to the economy when they don't pay tax 🤔
@@Art-is-craft yeah investments in new projects which make them more money that they hoard, don't pay tax and don't pass on to the workers who still can't afford homes or basic living standards...
I asked my library to order Gary's book: The Trading Game and they did!! So now I can read it and so can others!! So happy to be spreading this information!!
As a 39 year Physics teacher with very little to show for my 16 years of hard work, thanks for sharing your expertise Gaz. Wish there were more like you
You can't put yourself as a victim. Most of UK struggling, but live within your means, save 20% and invest in some sort of index fund via Stocks and Share ISA, and when you retire, will have normal living. If you unhappy with the financial, change your career, as a Physics teacher, should have loads of transferable skills, do your research, find something between what you like and what pays well and go for it.
@@DaN3-YT-UK fair point. And that's exactly what I've done which has worked so far. But the situation remains shit for teachers and many other hard-working british families. And with one less Physics teacher, the 180 kids a year will have to make do with a non-specialist in a STEM subject.
@@lawrencewinter Fair, I can't argue with that. However, the best voting system in my opinion is people's feet. If people will walk out of those positions, the decision makers will have to address it. Not an expert, but now, it is bad, but not bad enough for change to take place. If people would be more selfish, the ordinary people, and realise that no matter what they do, they sell time, most of us are selling our time. Be selfish, and do what is best for you, if everyone would do that, then the market would adjust. Not an expert, just the way I see the word.
Start a side hustle business (easier said than done I know), leverage what you know, do something else that has potential to grow. Nobody can make significant "gains" by working for "the man".
Louder for those at the back!! We have an issue in the UK where people think they are wealthy because they’re doing better than the people they rub shoulders with not realising how deep in the mud we all are together. This is also what’s stopping people from pursuing more economically progressive ideas. Reform support is rising solely based on fear-mongering based on immigration. People out there genuinely believe that foreigners are responsible for the continual fall in living standard. Completely ignoring the massive asset hoarding being perpetrated by the ultra wealthy =\. It’s so ironic that there’s so much energy for weeding out those that don’t work and scrounge at the bottom of our society and absolutely none for those at the top that do the exact same thing 😂!!!
100% agreed anyone who has more than one property, anyone who earns more than 50k all needs to be taxed more! You don't need more than that!! anyone who has assets should have those assets given to ordinary people, its not right they have more! Tax the rich!!
@@slapjuice disagree. When you have Centrica making 900% profit over 2022 and employees seeing none of it, these huge companies should be taxed, hard. There's also ceo for tesco, an extra 5m to his/her bonus. Why play the same game of playing people against each other when gas, oil, share holders and ceo take 99% of the pie.
Look at Japan with VERY low immigration never mind illegal immigration: Crime is low, Housing getting cheaper each year, Public services not at breaking point.
USA - wealthiest 10% own 93% of stocks. Poorest 50% of Americans own less than 1%. Inequality divergence is growing, with the rich gobbling-up ever more assets, at a faster rate.
@@stumac869 Might have been a typo, but if you mean shifting right over the last 40-50 years then you are generally correct. The breaking of the unions combined with the libertarian and right lining economic thoughts winning out at the time (think Hayek or Friedman)
Seems very “easy” to say someone else should pay more tax i.e. the rich (who are not us). For Britain and the problem faced by much of the west, is we are in terminal decline, as a society we’re in retirement phase, and we’re all fighting over a pie which is getting smaller. Gary appears to be pushing buttons of economic envy as resolution, Britain isn’t poorer due successful British based entrepreneurs, while I’d agree we need be vigilant to foreign ownership and asset stripping. Until there’s an international treaty we won’t be wealthier in the long run by penalising our successful entrepreneurs.
@@jutsie It's worth the pittance the rich pay to Molodovan's to have them sit on youtube all day trying to undermine anyone who challenges the right of the wealthy to parasitically drain a country's wealth. acz88's comment makes no sense, but it doesn't have to, it's just about creating noise and interference. There can never be the perception of accordance with the general public on any issue. Far better to have us at each other's throats, create divisions over age, over race, over gender. Just don't let them see the con trick playing out in front of their noses. If you've watched the documentary Hypernormalisation it describes all the tactics that Russia uses which it tested on its own people - fund groups on both sides, fund Black Lives Matter and fund their opponents, fund gangs of people smugglers and fund Reform UK. The wrong people learned the wrong lessons from seeing this and here we are.
Hi Gary, I used to be a broker and I became largely disenfranchised by the state of western economics. I have changed tack and am now training to become a paramedic. Thank you for trying to educated people in the ways the system is currently broken
Excellent. You will see why the poor are poor and how they live and take more from the system than they contribute. You will also see how abuse of the system and mismanagement cause most of the problems with the NHS. I have and it's completely broken my perspective of people. It will be worth it when you get to genuinely help someone in need.
@@mrdave02 Yeah. It's all the fault of the poor! Not at all the fault of the tax-dodging rich mfs - the latter don't at ALL take more than they contribute . . .
This is a brilliant explanation of the difference between working rich and ownership rich, along with a simple explanation about taxing assets and how they can't go overseas and therefore they CAN be taxed. Runaway inequality is the single greatest threat to the viability of the UK and the US going forward. Taxing the ownership class is the only nonviolent alternative for reducing wealth inequality.
@@intenzityd3181 this is gibberish, plain and simple. Average working people, doing actual work and making actual paychecks, are not able to afford to own homes, provide for their families or build futures. It's not a "fiat vs assets" problem, it's a dramatic inequality of wealth and income problem. TAX THE RICH OR EAT THEM. It's absolutely that simple.
There are many countries that do not allow foreign nationals to buy land or property in their countries. This stops situations whereby a block of flats is built in London and bought by foreign investors, stopping locals buying homes. Often these properties are never lived in and just held as an asset. This is a disaster for us, the little tax paying people.
It can be done, even if paper companies are set up to extract a countries wealth or own their assets. However what country has the resources to monitor that? The next problem is some trade agreements often have specific fish hook clauses relating to property, asset and company acquisition
Hi! I’m excited to be here in your channel and I’m interested in learning more about investing and saving up for my retirement but am a little confused about the whole process. Any advice or tips to get me started up would be greatly appreciated.
Retirement is now more difficult than it was in the past. I've been saving for a long time instead of investing, and right now I only have about $400K. considering all the inflation, i'm thinking of investing in stocks, i dont just have idea on market strategies.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800k
I am an trainee accountant and I asked a qualified tax accountant what the biggest issue with a tax on wealth is and the first answer I got was “because rich people will leave”. There is a deep lack of understanding of this even amongst trained professionals
It's incredible the degree to which humans will believe something without checking if enough people say it. I'm as guilty of this as anyone. Another reason this channel is so urgent.
They will leave, trainee accountant. They will structure the sale (if they have to) so they pay no tax of those assets, on top of that, the tax that they cannot avoid will go to another jurisdiction. The biggest issue with a tax on wealth, is generally speaking, it attempts to tax UNREALIZED gains. As an accountant (trainee or otherwise) you should know the problems with attempting such an idea. This tax the rich stuff is always ill-conceived and its typically used by socialists as a catchphrase to get you to buy into their death cult
I think Gary’s idea here is that if you own £100m of UK assets, valued that much from the sale price when you bought them, you should pay a tax. You should have enough liquid assets to be able to pay for the tax on the illiquid assets you hold. Perhaps you could tell us what problems you see existing for such a policy @james3744 ..?
We’ve had Thatcherism since 1979 which serves the interests of the (mainly overseas) wealthy. The problem with Thatcherism is that you eventually run out of assets to sell to overseas investors so that they can rip off British consumers. Reduce inequality by taxing the rich.
We've still got schools, hospitals & roads that can be sold off. Thatcher made a good effort to sell off most the nation, but she forgot some stuff. I fully expect most of the above to be in the hands of Starmers newest buddy, blackrock, by 2030.
@@Nick-io9uk Uk was bankrupt when Thatcher took over. It had inflation of 24% and unemployment of 15%. Labour will not be able to convince the public this time. Nobody bought the post 2008 crisis.
How about googling why Jim Ratcliffe changed tax residency. “In September 2020, Ratcliffe officially changed his tax residence from Hampshire to Monaco, a move that it is estimated will save him £4 billion in tax. “
I have been having this argument with people given the recent election so it’s nice to see the argument backed up by economics. I find the most disappointing thing about people claiming that you’ll lose the rich is that comes from the less affluent working classes, who are dissatisfied with crumbling infrastructure and being unable to get a doctors appointment, yet have been convinced that the very wealthiest being asked to pay their taxes is a threat.
This guy is full of shit. Half of what he said is factually WRONG. The rich already pays most of the taxes. Taxing the rich will only result in a country full of only poor people. It’s why UK is broke today. But keep going down that communist road and rot your country some more. I don’t live near UK. I don’t give a fuck about UK 😂
Could you please expend on “backed up by economics”? The premise of argument in this video is the example of “Rishi’s” 700 million wealth, yet this is the Sunak’s wealth and primarily from his wife’s share of her parents multi billion dollar Indian IT business. So the simple truth is majority of their wealth has nothing to do with their residency or their UK assets. Now is Gary misinformed or is well aware he’s misleading his channel? If the magical tax system he’s referring to was in place it’d seem highly unlikely Akshata Murty’s wealth would be anywhere near the UK, which might suit your political ideology but it doesn’t make the UK wealthier so please don’t pretend that it does.
That's because the poor hope maybe somehow they'll be rich one day. They're living in a world of hope otherwise there would be violent revolution.. So the TV perpetuates this thought. 🙊🙊🙈
@@manuelrapino5917 yes but this does not stop the phenomenon, so there must be workarounds accessible only to the "initiates" with certain company structures. It would be interesting to dive deeper
This is also true in Britain if the asset is transparently owned and the rents are paid transparently. But for the rich, the asset isn't owned transparently. It will be in a complex legal structure and the rent will end up in an offshore bank account out of reach of the tax authorities. This will be true in Italy, France etc. You have to realise that the rich don't play by the same rules as the non-rich. Read about the lengths Lewis Hamilton went to to avoid paying taxes on the private aircraft he purchased. This got disclosed by a rare investigative journalist and the same sort of thing happens every day. Many of the high earners in the UK provide these services to the super rich.
@@imbariegh there's always a way around the rules we know it (shell companies, plain fraud, bribes,. ..), but i would say inequality here in the UK is numerically and empirically more noticeable, even in the day to day life.
The same is true in the UK... Gary doesn't seem to understand tax laws in the UK. In the UK, if you have income in Italy, you are not taxed in the UK by UK govt, if you live in the UK and have have overseas income as you are taxed already in that country.
It is not just bricks and mortar assets it is also services and institutions. NHS health care and dentistry, veterinary practices, energy, water and transport are all owned by wealthy asset managers and corporations and look how much we have to pay for very little in return. A major reason councils are verging on bankruptcy is that both child care and care homes are now owned by corporations that charge huge amounts that councils are obliged to pay and further boost profits by minimal services. The Tories were never interested in small farmers. They were happy for them to go to the wall so industrial farming could grab what they wanted and the marginal land could just be re welded.
@@Art-is-craft Every council in the U.K. had their central govt funding cut by George Osborne from 2013 during austerity. A National Audit Office (NAO) report, showed councils' spending power fell in real terms by more than 50% on a like-for-like basis between 2010-11 and 2020-21.
Exactly, a big point missing from this is that nation states need to move to eradicate tax havens. The issue is that it is the tax havens, that includes places like Ireland, Holland, Switzerland, Luxembourg etc. that enable this shifting of wealth and avoidance of tax.
@@aldozilli1293i don't think you understand much about how this all works if you're saying that. Luxembourg, Netherlands & Switzerland can actually be quite high tax. Don't get misled by reading headlines designed to create outrage or push an agenda. You need to actually dive into the nuances of law to understand what's really going on
Cassandra is an old myth, which has resonated through the ages. As an ageing regular person I endorse this message. Back in the day a Tory ex pm made a speech in the Lords about the inadvisability of selling off the family silver. The filthy rich are rich from those bargain sales the short term profits from which kept Thatcher in power. I remember Harold Macmillan making that speech, and he was not alone. But the majority of boomers and older generations now dead didn't heed the warning. And you and I (for how long I dunno) are reaping the whirlwind. Being sufficiently clear sighted to see the bleeding obvious is not often a road to popularity or riches. I just hope young people around now, don't look back from the rubble in forty years time remembering some chap on You Tube explaining where and how the wealth of the country has gone and wonder how so many were fooled for so long.
So taxing the rich means: a) Land Value Tax b) Property taxes (community charge needs serious reform- it's highly regressive now) c) Taxes on dividends or taxes on value of shares held? d) Taxes on assets such as gold and silver etc etc- basically taxes on every asset held Could work as follows. If you hold assets less than x amount (say £10million) no taxation If you hold assets more than £10 million (could exclude you most valuable house- to avoid any issue of having a valuable home but limited income) you have to make an annual declaration of all the assets you own and then you pay x%- say 1% asset tax. HMRC can audit to verify your declaration- any assets not declared result in 100% fine (so if you declare £15m but fail to declare another £5million of assets, you get fined £5m). Huge incentive to make declaration accurate.
Yes you are talking about a wealth tax. Some countries already have them such as France and Switzerland if I’m not mistaken. UK has focused too much on taxing consumption (crazy 19% VAT), income (for the bulk of people- getting up early 5 days per week to slog it out), and then corporations tax is pretty chunky- around 20% of a businesses profits- if you can make a profit. Plus all the NICs that workers and businesses pay. Needs a very big rebalance to tax wealth of the top 5% of wealthy folk imo.
The gold amd shares will leave UK in a couple of years. You can then inly tax the land values which will be falling anyways due to the wealth flight outwards. It would mean bye bye NHS and bye bye state pensions.
I read the other day that foreign ownership of UK firms has gone from 10% in 1990 to 55% in 2020. I don't think you can be worried owners will leave when so many aren't here in the first place. These remote asset owners also tend to want minimal involvement and push for quick returns rather than long term growth.
Great video, fingers crossed the wealthy start getting taxed more. I’m in Australia and we really needs to tax the rich and pretty much everyone digging up our resources better. We’re failing massively at it here.
Why do you want the wealthy to be taxed more? Your country has the world's largest steel reserves and almost no steel mills. You have massive coal reserves and you sell it all to China who burn it, build solar panels and wind turbines which they sell back to you. Then you guys pat yourselves on the back and claim to be "green". There is literally no amount of tax that can counteract that level of stupidity.
As someone who commented on a previous video saying that the rich will leave, this is one of your best videos yet. Thanks for clarifying. So the answer is to reform the tax system?
It's in the wealthy persons interest to keep the majority on their side, so they should pay their taxes and the government in any country should nationalise totally or in some part vital services. The fact that so many countries have privatised essential services such as transport, water and soon to be the NHS. If things keep going in this direction there will be a revolution. I have sensed something in the air this year and the voting across europe has shown it to be true. People want change but everyone has to pay their fair share for the good of all, wealthy and not so wealthy.
I'll tell you something about that equality it was for the middle classes the working classes were not wanted really. It's true there was free university education but who could afford to live on a student grant? Society was divvied up quite nicely for the middle classes by the middle classes. I know this because it was my actual life not from a book but I actually lived this. So you see when I hear that the middle classes are being defenestrated I'm not at my most sympathetic. Anyway of course tax the asset rich and it's important to say that and not high income earners. They will try to hide behind that difference won't they.
Britain was extremely poor 50-60 years ago. Is that your idea of equality? Having your savings pissed away with 25% inflation, being stuck in the working class no matter how hard you work? Left wing takes on history are bizarre to me.
Hey Gary and Viewers, while I agree with many things you explain to the followers, I felt the urge to correct a few things you are portraying about the tax system. I work in Tax Law and the Tax Man is not stupid. 1) Property is taxed in the jurisdiction it is located in, no matter who owns it. Limited companies, trust funds, and individuals all have to file tax returns in every place they own real estate and pay income tax there, not based on their own residency. Some double-tax treaties (contracts between two countries on how to handle matters of double taxation; e.g.; on dividends, earned income, etc.) reallocate that right to tax, but Western countries do not have these treaties to avoid double taxation with tax havens like the Bahamas. 2) If you draw dividends/payments from e.g. stocks, bonds, or privately held companies while you live in a low-tax country there is this mechanism called withholding tax (The UK does not impose it on dividend payments, but other countries do). So any dividend payments from for example German-sourced income going across borders to maybe the UAE requires a withholding tax of 25%. That is lower than domestic dividend tax rates, but still, HMRC gets its share before the money leaves the country. (The actual appropriateness of the rate being 25% is debatable and another topic.) 3) One more thing, many countries now levy an exit tax for everyone leaving the country with assets to their name. The same goes for companies relocating their operations. A fictional sale is assumed and tax is due on all the assets and company value, as if they had been sold at market rate. Also, if you move to low-tax countries, many jurisdictions already implemented "extended limited tax liability" which means that for up to a decade upon your move, you remain liable in the country you're moving away from with your worldwide income, as you're classified as someone who is potentially just moving away for tax optimisation. Cheers, and have a great weekend everyone!
Thank you for your most sensible comment about this topic. Though it still boggles my mind that you can be held liable to pay tax in a country you no longer live in for up to ten years after you leave. That just seems wrong to me.
And the parts that Gary does not understand (or he does, but doesn't trust his viewers to understand)... [1] unrealized gains and (the problem of) taxation, [2] trusts and taxation, [3] carry forward losses and taxation [4] CGT calculation and taxation, [5] inter-group loans, treasury functions and taxation, and [6] structuring the sale of assets and taxation. The tax man may not be stupid, but there is a hell of lot of voluminous local tax legislation without even looking at international obligations. Its a cat chasing its own tail.
If I may add to that for Gary's attention, it's not just assets owned by individuals, its corporations owning assets. There are a lot of convoluted group company structures with companies incorporated in various different countries and with different tax laws which make it difficult to see who the benificiaries are. The ultimate owners of these are the ones who benefit and will take money through dividends. What specific tax changes would you make to balance the capital asset inequality? Changes to capital gains, income, inheritance tax?
@@james3744 Well put, inter-company base opens so many doors and closing one opens another, it’s a rabbit hole. Government is too busy chasing big law’s global structures to rethink the entire taxation system. Especially agree with you on the TLCFs.
@@Pravine9 I understand where you’re coming from, the layering and anonymity of beneficiaries is not the matter at hand. It’s about people leaving if taxes are increased and whether they’re taxed properly or not. Those global structures you mentioned usually trigger taxes on every step of the earnings moving up the chain to the beneficiary, or if not, they’re usually being deferred. What to change? Eliminate “buy, borrow, die” on capital assets. (Germany for example, did it already) Impose taxes on trusts once every 30 years or so to simulate a generational exchange to treat it the same way as asset exchanges among individuals. Apart from that, taxation is often ineffective and not worth the effort, which is why many countries abandoned wealth tax and taxing unrealized gains, it needs to many people working on it and is therefore unaffordable. We all know that ownership is the way to wealth so we need more ways to make workers owners, like simplifying stock option plans and automatically investing National Insurance contributions and ISA contributions into the stock market to participate while investing in financial education for the masses. Incentives are much easier to control that more tax layers. Then decrease income tax for the average income range and charging a few percentage points more on income of the top executives and advisors who do have earned income in the millions while not capping national insurance contributions at any income level. Problem is: it could result in >60% taxes for earned income. Only way to tax more regularly is fixing trust taxation to not let profits accumulate for eternity and maybe prohibit borrowing against stocks to force realisation of capital gains.
In Victorian and Georgian times, the mill owners lived beside the mill. You could point to the wealthy. This is a very narrow example, as many owned plantations in America and the Caribbean, but ai find it interesting in comparison to now. I haven't got a clue who owns what now.
I’m going to send an email to my local MP and link Gary’s video - I’ve never done anything like that in my life! But something’s got to change! I’ve got to do something different! Good luck 🤞🏼 💪🏼
On this Gary is 100% right. Its time for all the classes/socio/economic groups below the Wealthy elite of billionnaires and corporations and their political cronies to unite in awareness and action worldwide to force change .
Those billionaires can take their capital elsewhere where. Ireland next door has already enticed mantra to its shores and guess what this might be a big surge to Ireland, Switzerland, Netherlands and the US.
@@keifer7813 So you want to tax National Grid plc on its wealth? What if they cannot pay for the levy do you want them to sell off assets to pay for it or is your proposal on the basis of ability to pay?
@@Art-is-craft No, that's corporation tax. The discussion is about a wealth tax i.e taxing the owners of National Grid plc. Of course its means tested. If they meet the threshold for the wealth tax, we tax them.
Having heard similar in the past; they will leave the country. I previously reached the conclusion that wouldn't happen, and if they did somehow leave something new would fill the void. The country is the asset, the population is the customer base, these form the nation and cannot be separated. It's for the Government to implement measures to prevent the exploitation of the assets and customer base, as explained in the video.
It happened in the 1960s, the rich left the uk in great numbers. It depends a lot on what the tax rate is? Though the 1960s was at 90% above a certain amount
@@larrygerry985 High levels of innovation and industry occurred in USA in the 1950s at a time when the highest level of taxation was levied on the highest earners. Innovation wasn't stifled, but rather flourished. Perhaps then were more optimistic times! Gary is mostly addressing the passive incomes of the wealthiest asset-owning class, rather than an earned income tax rate. Progressive tax probably works best, instead of clobbering the same high levels on those with more modest income-earning assets such as dividend paying equities.
tbh i don't think some of them leaving the country would be necessarily bad. no more monopoly/oligarchy by big corps could mean local businesses will thrive. even now it's not like uk manufacturers a lot of stuff, we're paying imports on those either way.
@@brianmorrison6636 The US had a 90% tax on realised gains not on gains. That 90% could be avoided by keeping the money in the business. Many did not withdraw at 90% against their business and instead invested the money into plant, resources and employees. Is that what you mean?
@larrygerry985 a lot of those that left in the 1960's went to South Africa. They are now desperately using their uk citizenship rights to send their kids back to live in the UK. Also returning themselves and claiming UK pension and pension credits
@garyseconomics love your work. I was telling a friend about your channel and was explaining it to them. I found myself using the term 'ultra rich' or 'assest rich' rather than just 'rich' it really helped to differentiate and explain we're not the 'rich' you're talking about. PS. Fuck the frog
Working for a living = wealth creation, ownership of assets = wealth extraction. At some point we stopped understanding the difference. We need to remember again.
That's cause we decided to base our entire economy on people shuffling bits of paper around, calling it 'wealth generation' - no wonder everything is so confused
Why would I put so much into creating something if I can’t extract from it once it’s made? Unlikely PAYE; a field doesn’t yield as you sew. A good farmer creates better systems so they can work less and extract more. As per they guy above: the correct incentives need to be in place.
The problem is that these people are wealthy enough to spend enough money and pay for resources to thwart most attempts to tax them. People are easily bribed even if that is in an indirect and morally acceptable way.
Ireland is not a tax haven. Ireland was raped for centuries by the Europeans and British. To get a head start it needs its own tax policy. Would you not agree.
Going to email Rachel Reeves and my new Labour MP. Even if someone else deals with the emails, if they see emails from lots of people saying something about ‘wealth inequality’ and taxing people with ‘extreme wealth’ in the title, at least it will let them know it’s something people are bothered about.
A society cannot be held hostage by the threat of super riches leaving the country. It's ridiculous that some people justify the current situation by saying that we need to accept that some people contribute less, because making them contribute more will result in them contributing less. It's almost as stupid argument as the reasoning of why private schools shouldn't be paying the same tax as every other business in the UK.
I think that's a fair position sort of. The issue is I think more one of not understanding the trade offs you're taking and needing to properly evaluate those. Nothing is free so you need to ask if you think you're getting this good thing what is the price you're paying? When you really understand then you can decide
@@MichaelRosmer Not when 20%+ people is under the poverty line and the rest of the things happening in Britain...Politically it is unjustifiable when we are on the way to the Dickensian world and this way of thinking is a contribution factor. Too big to fail companies and too big to fail individuals. Look at where the UK is with them. Thames Water was privatised via a leveraged buyout. So the general public is paying for the debt, the company paid shareholders instead of fixing the infrastructure and then they want a 49% increase on bills to cover the mistakes they made. And on top of this they will get reduced fines comparing to the compliant companies, because they would not be able to get out of the hole they dug themselves. The excuse here is the same...it would be more expensive to do anything else.
@@MichaelRosmer You people always say "Nothing is free nothing is free" but no one is saying that it's free?!! The fact is that NOT doing this COSTS US. Choosing to ignore the issue of inequality has an associated cost, this basic economics: opportunity costs. The more we allow this continue, the worse things get.
@@finalcut612 Well, YOU people always say ‘we need to do this because it costs us’ without realising that if we ‘do this’ it ends up costing us even bloody more! Labour notoriously short sighted economically, I’m very very worried for the future of this country
The rents, mortgages and council tax bills as well as the electricity bill are a huge amount to be found by families. Single people often can't rent homes or if they do it's a struggle.
its a struggle when you dont have a good job yea if you dont care/didnt care to get qualifications better than your neighbour then you cant complain that lifes a struggle can you.
Land registry is notoriously hard to examine. The Scottish Government has tried to find out who owns Scotland and the same has been done in England through private efforts... very little progress has been made. I can only assume that there is no motivation to do this. It seems fairly clear to me that if you turned the tables and gave , say , 12 months for those Land owners to declare their interests in Land, with the penalty for non compliance being that the Land would revert to the state. Similarly for any asset. Then taxing those assets would be a matter of record. If you have a Labour Government who were founded to literally represent the working classes ( the clue is in the name) , who are unwilling to make any in-roads in to the inequalities in this Country, whilst we have seen an explosion of food banks, then you have to ask who are these people really working for?
Labour hasn't represented the working class since the 80s. We need to be voting Left, these center left parties are economically right wing with slightly more progressive social policies, both labour and the Tories represent corporate interests.
Only someone that don't own anything could say something like this.when I get taxed for stuff I've already paid for from my hard earned taxed pounds on a yearly basis its not my property anymore I'm merely renting it
@@Spencertarring out of curiosity, what happened to your previous customers? Did they move to a competitor, did they come with you or did they do without the service? I'm just curious about what happened to them, given the subject of this video.
Depends what the goal is. If its to make property cheaper, yeah, that will work. If its to raise revenue, not so much. Values are a matter of opinion, as they say, and an annual property tax eats into yields, the value must reduce accordingly to hold up yields.
@garyseconomics I think another version of the argument "the rich will leave" is that imposing a wealth tax is going to disincentivise future investments. In this video you've effectively argued against the notion that existing owners of assets can avoid a wealth tax by leaving the country. But don't economies also rely on continued investments in the pursuit of growth, and don't governments rely on investors buying government bonds in order to raise debt? Could you please comment on the consequences of reduced investment in / into the UK due to the introduction of a less attractive tax system, and how one should address this problem?
but hes talking bout owning property, how is owning property investing in the economy the only people who benefit from that are the companies who make the property in the first place, when some one else who lives in this country could do that instead for a lower cost
@@hoktoshinkenmaster the issue I'm describing is that people who wish to invest their money will seek the best return on their investment. If a person has the choice between investing in an asset which is subject to a wealth tax and an equivalent asset which isn't, then I'd expect most people to choose the latter, unless there's very strong reasons to nonetheless invest in the former inspite of the greater tax burden. Crucially this applies to foreign nationals as well as British citizens since any Brit can easily invest their wealth in non British assets (as well as leave). This also applies to all kinds of assets and not just real estate. As far as I can tell, the consequence will be that unless Gary's tax proposals are implemented in many, if not all, major economies, the level of investment in the UK will substantially drop. I'm a big fan of Gary's purpose and vision, but this is an aspect that I've not been able to reason away. I'm not an economics expert and would therefore appreciate Gary's take on this.
@@cormacbiggar The straightforward counter is that rich investors generally invest to extract value, not to improve the investment (essentially forms of rent). So those investments don't actually grow the economy for anyone except the very rich. If you disincentivise them, they stop extracting rent from the economy and everyone else in the country gets a bigger slice of the pie.
French Economist Gabriel Zucman is calling for a 2% Global tax on the Ultra Rich. Germany, Spain, South Africa and Brazil have all expressed support and the French Economy and Finance Minister has stated commitment to implementing at G20, OECD, and EU levels. Not sure 2% is enough when their wealth is increasing by 21-27% year on year, but it's definitely a step in the right direction.
Socialists always come out of the wood work in these times of broke governments, that couldn't run a piss up in brewery. Wasting taxes and they need more and more and more.
Somebody who has a net worth of 1 billion but only has 2 million in cash would have to sell of some of that 1 billion to pay the tax. So do you think it would work.
It is worth pointing out that the US taxes on citizenship. So, as an American citizen living elsewhere (as I do, in the UK) I am responsible for filing and potentially paying tax to the US every year. In practice, I don't pay anything to the US because I already pay a higher tax rate on my income in the UK and there is a tax treaty between the US and UK saying that because I already pay more tax in the UK and I live in the UK, I don't need to pay US taxes. It is no doubt different for businesses and people that earn enough to pay accountants and lawyers to move their non-US income around so it doesn't look like they have any US tax reporting requirements or have to pay US tax. The US and Eritrea are the only countries in the world that tax you just because you are a citizen (even if you don't live there).
I think what you are saying is basically correct, but there is a big caveat, and also a big caveat to the caveat. Big caveat: The wealthy have real-time influence over international trade, including debt and currency trade. Therefore if you go after them, they are in a position to punish the nation collectively by pushing currency value down and debt interest up. For a country with the reliance on imports that our has, this is very bad. What happened to Liz Truss was essentially just a taste of this kind of punishment. Caveat to the caveat: The UK is a major cog in the world economy. Therefore if the government were willing to play hardball with the investor class - in terms of changing regulations around investment, legislating to prevent capital flight, using the BoE as a creditor and credibly theatening to renege on our international debts - they would have to back down, because the UK is quite simply "too big to fail" in terms of international economic fallout. But for that you need a government with the courage to face up to the finacial markets, call out their anti-democratic influence over economic policy for what it is, and deal with the short-term economic shocks that the conflict would entail with a kind of "war economy" mentality (market interventions, forced loans, rationing etc etc). I dare say such a government is a very (very very) long way from what we now have. Still you gotta start somewhere, so thanks for your efforts!
Also a friend of mine came up with this (related) argument - "If the UK Government increased taxes on property then international property investors would switch new investments to those countries with lesser rates of tax. Higher taxes on property here would cause said property to lose value. Capital seeks the highest return." Is he correct?
@@stuartelton2678 Yeah absolutely, taxes on property will depress property prices, so you have to factor in that whatever your headline projected yield from that tax may be, the real yield will be substantially less. It also causes all kinds of short term problems for mortgage holders. Again, if the government hasn't got the stones to bring in emergency measures (in this case a BoE scheme to provide low-interest mortgages to those in distress) it would be a disaster. But if they do what it takes to tackle the short-term problem, in the longer term there are many more winners than losers, because the losers are those who treat housing as a financial asset, while the winners are anyone who relies on wages to cover housing costs (whether through mortgages or through rent).
Yes Big man. A couple of questions... 1) What percentage of the assets are owned by 'foreign investors'? 2) How much money does this amount to? 3) How much tax can we raise from the rich? i.e rate/total 4) What benefit will we get from taxing the rich? Can we fight back by not paying Council Tax/other taxes? If so, educate us please! Awesome video, this will soon start gaining momentum! Keep it up G!!
The rich led the charge to strip the Councils of their assets starting with Thatcher. If we stop paying Council Tax the situation gets worse, not better. We need to provide the means and drive for the government, both national and local to start reacquiring some assets. Then, we the people, start to gain moneys into our services in much the same way as the rich do - through passive income.
The far more important question. What is that tax money going to be spent on. The government wastes so much money as it is with a massive deficit. What's the point in raising more taxes if the government is going to waste it. We send million in foreign aid to India. India has its own space programme, we don't yet we send them aid.
@@quillo2747 It's all part of trying to keep India onside with tariffs and diplomacy. And since India is a major player in the so-called BRICS bloc the UK along with the much of the west is trying to prevent them from turning too much towards Russia/China. Think of it as bribes on an international scale cloaked as aid to the poor or helping Indian transform into a 'net zero' economy.
Thank you Gary! I only recently discovered your channel. I have been pounding the table for years saying we need to save our country/economy/future from collapse and it starts with taxing the rich. Thank you for getting this message out. Also thank you for providing us with some very helpful information we can use when talking with our friends and family. I’m so grateful that there are great people like you out there trying to make a difference for our future.
*let them leave* and when they try to their physical assets and can't, they'll come back or sell it off, and we should just demand that it can only be sold to UK nationals who live here and pay tax.
I remember talking to a guy on a plane and he said that the way to break the economy of a country is to sell off all the public assets and here we are, in the UK. I believe in the near future, the recent history of the UK will be studied as the definition of disaster economics, and our children and grand children will ask how we allowed this to happen. More power to you Gary. Keep up the good fight!
I really enjoy your videos. Thank you. Don't stop lobbying. Greens and Libs could do with this explanation on their channels for the next election. You are helping to change the rhetoric 🎉
@@UIM_Moose you're right, people having disposable income is the main driver in economic growth via consumerism, if no one's buying goods or services, growth stops. The stagnation of people literally working to survive will be the eventual collapse of the whole system, less purchasing of goods/services means these businesses go under, less jobs, higher unemployment, the longer the snake eats it's tail the worse it becomes. I think the scam of a trickle down economy has well and truly come home to roost. They papered over the cracks from the crash in 2008, we've limped along ever since, being told we're OK, our growth is better than other countries blah,blah,blah, yet the vast majority of us are feeling the real effects in our standard of living and way of life, which has declined massively. I think change will happen regardless because we're circling the drain, and it's getting quicker.
@@UIM_Moose .....and government spending would plummet (NHS, roads, police, armed forces....), or government borrowing would balloon : interest rates would have to rise significantly for the government to borrow more than £250 billion per annum (latest Income Tax receipts : 2022-2023). You'd keep more of your income, but the government would be unable to provide the level of services that we, as a country, have decided to spend. Your mortgage would rise significantly, the pound would collapse so imported goods would be more expensive. Be very, very careful what you wish for - we'd be bouncing our way to widespread poverty and economic oblivion.
Trouble is most wealth taxes have been abandoned in Europe as they generate only 0.5% of tax revenue - only Norway, the Swiss and Spain keep them up - the super rich are super tax literate in avoiding them
You don't need a direct wealth tax in order to tax wealth. Wealth is owned in industry, land, companies, stocks and bonds. You can tax these assets, for example company tax rates in 'Western' countries are across the board lower than income taxes. Land taxes also don't exist in many countries compared to the stamp duties that many pay which is a tax on buyers. You can tax the things that people own which will tax their wealth without a tax directly on wealth.
Not sure where you're getting this idea from, because its not fact. Even France has a wealth tax it was reformed and changed names (to IFI in 2018) but wasnt abandoned; 0-1.5% of what people gain starting with an estate over 1.3M euros. You speak about 0.5% of tax like its nothing, 0.7% of UK tax revenue funds ALL academic research. Doubling the input to this would have profound impact on our economy within a decade.
That's what Gary described as State Capture, and like gunk in the drains blocking the flow of water, it's a perennial problem because extendive asset wealth gives you power and influence. But it doesn't have to be that way. If we don't put the effort to ensure our politicians serve the interests of every citizen, then that's on us. Our ancestors came back after World War II, and used the ballot box to draw a line in the sand. And unfortunately, we can't say "one and done". It's only taken 50 years or so to erode that legacy, of the electorate really taking back control. We didn't realise that that legacy had to be defended. A legacy that fought ignorance and despair, cannot defend itself against a system that relies on leveraging some of the worst traits in human nature. We must protect ourselves against those traits getting out of control in those we reward for exploiting them. Democracy is the only means the people have to tame it, because to govern the country requires our approval to have legitimacy. The cynical say if voting meant anything, they wouldn't let us do it. But I say, if voting meant nothing, why do the plutocrats spend so much time, effort, and money on trying to influence who and what we vote for? Why did certain people try to make it more difficult for certain citizens to vote. For once, Rees-Mogg wasn't lying when he admitted that Voter ID was gerrymandeting. That's why our voting system needs to upgraded and made more effective democratically. We have to move to a system where every vote counts. It's only one defence against those who would manipulate us, but it's an essential one for our democracy to act more effectively. We have to have systems of governing that ensure that our best interests of our communities and country are served. We have to stop being dependent on being lucky. Our democracy needs strengthening, and so do our communities. Neoliberalism isnt just an economic experiment gone badly wrong. It was a social and political one gone awry too. The ideology wanted us to believe that there was no such thing as Society, until those pushing that nonsense wanted it to replace the state's collective support that had been deliberatively withdrawn to provide bug tax cuts to cipirations and their owners, who had 8nturn suppressed wage growth fir decades. They encouraged us to believe that John Donne was wrong when he asserted that No An is an Island, written when the powerful wealthy elite wreaked havoc on their people to entrenched their power. Donne wrote that passage as a survivor of political and economic upheaval in England in the late 16th century that was dressed up as a religious and political struggle, but was the wealthy throwing the little people under the bus yet again, to secure their power. Like a gardener having to keep on weeding the garden, the citizens if this nation have to keep fighting time and time again, against those who would put themselves above the interests of the country and their people. And as austerity and the pandemic showed us, the tendency for the asset wealthy and entitled to throw poor people under the bus never goes away. So we must be able to weed them out. And we must work at it to protect the harvest of our sweat, of our hard work being stolen and hoarded while we suffer. That's the part 9f our history not exactly taught and it should be, because the work can never stop, can it? It's not the 16th century. it's not the 20th century. It's the 21st century. And the work has to continue for the next generation not to slip into poverty again.
Don’t a lot of countries tax income earned within their borders? So in your example of someone owning assets in France but living in the Cayman Islands, wouldn’t they pay tax on any rental income earned within the country they reside i.e France?
What about the fact that a greater proportion of assets are becoming digital in the modern era? Estimates say digital assets are currently 20% of global wealth and growing each year. For example, almost all of my assets are UA-cam videos which can be moved abroad with no problems. I’m not rich, what I’m alluding to is you can’t tax rich people who have significant assets in the digital realm which can easily cross boarders.
It's a really interesting point! Edit: Maybe it's more important where the income is paid from (for instance where does youtube send you the money from) and where the recipient of the income lives rather than where the digital asset is stored. Kind of like a source of foreign income. You'll have to declare it in the country in which you reside.
The 171 UK billionaires together are worth around £655 billion. If we confiscated 100% of their wealth, we’d raise enough to run the UK government for about 6 months. Perhaps our problem isn't how much billionaires have but how much and where politicians spend.
I think its both. The left makes a sound point regarding inequality and rent seeking, while the right makes a sound point regarding government inefficiency and overspending. An ideal government would take action on all of those things.
There is a reason the largest GDP growth in UK history was when we had the highest top rate of tax and everytime it has been lowered so has our gdp growth
@@Alex-cw3rz I wanted to know what period you were referring to. Britains GDP post WW2 was driven by rebuilding the country once that party stopped there was the 1970s economy.
Hi. I love your content. I work in Finance and came across you from your insider interview. I honestly think you could unlock a whole new audience with more cuts in your content. I’m happy to sit here and watch you talk but I feel like younger people need some more content dense stuff
The usual important message put across very clearly. The main objection that’ll be put up is going to be “how do we identify the beneficial owners with all the myriad Cayman, BVI, CI etc based companies hiding them?” Well let me tell you this can be done, it revolves around bank accounts and money transfers, no bank account should be open without beneficial ownership being established and no money transfers allowed until this is the case. Establishing the chain of asset ownership > bank account > beneficial owners ties the wealthy to their assets which we can then tax.
@garyseconomics Most of the videos I've watched you put out effectively argue for a wealth tax. This is the first video I've seen which additionally states that we also need to implement taxation based on asset / transaction location rather than the owner's domicile. I think this is a really important point which you should be making in every single breadth in which you advocate for a wealth tax. They're two policy proposals which are inextricably linked and therefore ought to be presented hand in hand, always.
I am 53 and I have been hearing this argument since I was a kid. I have always believed that taxing the rich is fair and will not result in them leaving. Problem is a big part of the issue is that those of us who are high earners via a job, or own their business and have a good life through it, THINK! that they are part of this 'Rich' club. They are working class and always have been. Politics and media have made the term 'Working class' a negative dirty thing, so we try to separate ourselves from it when life is going well. Leaves us wide open to politicians using this to their advantage and putting fear into high earners by saying "see they are going increase your taxes". 🤦🏿♂️ So frustrating that people can't see through it!
Exactly this: if your main source of income is from a job or work that you do, you're working class. If your main source of income comes from your ownership of assets, you're asset class. There's another class whose main income comes from receipt of benefits, including pensions; this cohort could be referred to as benefit class, but this also has negative connotations which have been instilled into others
That said, the middle class is where people's wealth is a mix of working for their money and owning assets, like a house. Lot of snobbery around what's essentially a caste system based on perceived wealth, which is nuts given that 85% of the money in the UK economy is credit money. We're (nearly) all living on tick
Speaking as someone who was nearly bankrupted by the Revenue on my fairly average earnings as a contractor I want to see your ideas put to work by the government
@@mattsmith1157 This is what I thought was already happening aswell? Unless there’s some difference when owning the properties in a limited company which is registered abroad or something?
@@킹링-c9l Foreign individuals and foreign companies are both liable to tax on UK property income and on gains they make on the sale of UK properties. The same rules apply in most western countries so it is difficult to avoid tax on physical assets held in a country.
There are ways to release wealth from Perry you own that aren't taxed so efficiently. For instance, look at Thames Water. The owners, or major shareholders, loaded the corporation up with debt repayable to the same shareholders, who directly or indirectly owned the companies that were Thames Water's creditors.
@@킹링-c9li think he is referring to the secondary mortgage market, ie mortgage backed securities, not an individual person owning a few houses earning rental income and the gain on the price increase when selling any of those houses.
There's also a very special category of "the rich" in UK which exploited non-dom status. Most people probably don't understand that this category of the rich and super-rich never actually helped UK with anything. They are here in the UK because their assets and income are located abroad, so no matter what UK does they cannot be taxed or cannot be taxed easily. And UK made it extremely easy for these non-doms to operate such model. So whether they stay in UK or go makes no difference to UK economy really because they never paid tax here and never will. But they can make excessive demands on UK infrastructure by keeping many empty houses which are not providing accommodation to anyone. By making huge demands even on drinking water systems - famous case - Rishi Sunak's MacMansion in north of England required huge water resource diverted towards his property because he decided to construct huge swimming pool - which again will be unused most of the time, but requires resources which could be used by entire community in a communal swimming pool.
I like the sound of this but raising wealth taxes in Norway made many of the richest Norwegians to leave the country. Their argument is often that they have to sell assets to pay for the taxes which they don't like. So what is it that Norway can do differently? 🤔 Mostly the rich leave for Switzerland that also has a wealth tax but not as high.
Well it is because 1) they do pay tax - the vast majority of the tax pot comes from the higher earners. 2) if they own companies, everyone employed by them will be either unemployed or forced to relocate which means they will help a different economy.
Anyone with enough money to help someone else, without adverse effects on their own financial position, is making a choice. Let us not operate under a misapprehension. The rich stand on the shoulders of the working man but do not want to reward a single one of them.
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Hey! Could you make a video suggesting what these taxes would look like, a) would it be a yearly tax on all assets owned as some are suggesting in the comments - what is the system for valuing these assets? b) Is it just a tax on the income and CGT and IHT on the assets no matter where in the world you live - do we have any existing idea how much money that would bring in?
‘Assets can’t leave, it’s about ownership of the country you live in’
now that’s a quote !!! 👏 👏 👏
Dollar 💲numbers are not ACTUAL physical assets. The only thing being discussed here is the financial bartering capability of the government being increased over that of the "asset" holder.
Most assets can leave. Are you going to ban/tax foreigners for the value of shares they own in UK companies or hold in UK Govt Bonds,for example?. If you only tax UK assets are you going to effectively force UK savers to invest in foreign assets instead? Someone looks like they have skipped Adam Smith and jumped straight in at Piketty. The Govt are desperate for people to invest in UK companies to try to jumpstart growth. Putting off foreign investement would just increase their shortfall further.
In the same way £700 million of Sunak’s wife’s Indian based Infosys shares wouldn’t leave the UK as they were or would never be here in the first place to be taxed.
@@Jclmgthey are moving to the states where their kids will be going to Californian schools
We lost 12500 high net worth individuals between 2017-2022 over 3500 in 2023 .And more will leave due to the new Labour government.A large percentage of these individuals are not uk nations and some are and have given up uk citizenship. These assets can be sold to major companies or individuals and invest elsewhere.
Before the election I made a concerted effort to ask my local candidates their position on taxing wealth. What I found most shocking is they had no idea what wealth means and had the same understanding that if you tax them they will leave. Great video Gary
Yes my Dad asked this question and our local MP didn’t seem to have a grasp of it. Very eye opening! Glad she replied though. Think I’m sending this video as part of my email to her.
So they don’t know wealth is but they know the owners of will leave. Lol that doesn’t make sense.
Same, shocking how little the representatives of government know about how the economy functions. No wonder lobbies have so much influence, politicians are completely gullible and uninformed.
@@tj9382 yeah its worrying. As Gary alludes too, I think they just understand wealth as well paid professions and Range Rovers on your driveway
I didn't even get a response from my labour candidate. I'm not sure which is worse, someone who misunderstands or someone who doesn't care
I’m not sure how much this should be pushed but from the sounds of it perhaps tax the rich should be replaced with ‘tax the owners’ or ‘tax the assets’ to shift the focus from the people to the asset and remove personalisation of the tax and almost make the pill easier to swallow for the layman who is going to ask “wont the rich just leave”. Then again perhaps the spot light does need to be shed on the people who own so much. Either way hope the message and education of this channel and movement spreads far and wide!
Agreed. 'Tax the rich' is such a lazy call. I think Gary distinguishes between the "money/asset shufflers" and the 'hard working, well paid' rich.
America did well prior to the invention of tax. Read Tragedy and hope 101.
Very good point - ill be using that
Yeah we need to get as much emotion out of this as possible so we can think clearly and rationally 'tax the asset' 👌🙏
@garyseconomics this makes sense, no? It may seem small but it feels an important distinction
This is so helpful, my friends have always retorted with ‘they’ll just leave.’ And I can now answer, thanks Gary.
Gary should try and maybe get elected as a member of parliament (MP).
I used to work in Private Wealth. I used to report on private equity. People think they're going to work their way to those levels of wealth. They're wrong, you can only own your way to that. People have a soft spot for money, even when it's being used in a way that is causing harm to them. The political strategy on this issue needs to capture that.
@dellwright1407 majority of the UK rich list is earned wealth not inherited.. its the same everywhere. The so called rich people are looking for are actually themselves who end up doing very well. We should be taxing every man women and child until no one can ever be rich ever again!
It won’t
I agree, just look at the price of property. At one point it was rising 10/12% per annum in London, on a large house in a nicer part of town that’s £120/200k per annum on the value of a home with an average median of wage of +£30k? It was impossible in my younger days to save enough to keep up with the rise in prices, making it impossible to raise the deposit required.
Same can be said for investments with the S&P benefitting from the absurd amounts of QE post 2008. If you had the capital you could expect just under 11% per annum.
As the saying goes “money goes to money”, someone with an inheritance of £100k would make £10/12k per annum during a time when median salary was £30k, how does one keep up with that over the long term?
Wealth inequality is the single biggest issue facing society, it’s the reason that those earning decent livings still feel like they’re falling behind (and they are), why the middle class feel poorer (it’s because they are relatively speaking).
@dellwright1407also depends on industries. New technologies are almost always earned. Old legacy industries are often inherited.
Would you include farmers, who may own a lot of land, but work endlessly producing food? I think that's an asset that needs encouragement, otherwise we'll cover the place in solar panels and have to import food from god knows where 🤷
Well said. Rich is not defined by the salary, but the ability to manipulate the system for their own gain and avoid paying taxes
There's two categories of people in the world. People who work for their money, and people whose money works for them. Of the people whose money works for them, there's a smaller subset who have enough money working for them that the assets underlying that money will inexorably multiply. These are the people whose income is generally in the form of capital gains or dividends. Now, in the US, cap gains are generally taxed at 15pc. Dividends are normally 15pc, or 20pc for dividends totaling over half a million. The rate on income varies, but the marginal rate for a worker earning 50k a year (a rather modest income in the USA today) is 22pc. Meaning our hardworking plumber or whatever is paying MORE percentagewise than a trust fund kid who uses his income stream to buy up yet more assets. And it is (generally) far harder for the workingman to find tax avoidance schemes. Your employer deducts the taxes before you get the cheque.
This is a recipe for increasing inequality.
@@brokenrecord3095exactly, it’s wrong :(
Gary, in NJ, US, here. Your work is a godsend, flipping manna from heaven. I've been trying to explain these things to folks I know since 08 washed many of my friends out of their houses, never to return, and too many since are now simply deceased.
Your success in the financial sector, your grasp of the underlying mathematics, your background growing up rough, make your explanations brief and uniquely clear.
Good friends I've tried to explain these things for decades, hear your explanations and walk away with a coherent grasp and moved by their new understanding.
I cannot tell you how important what you are doing is. I grew up working class here in the US, I managed a good education and I'm ok, barely. But so many I know are not.
So many in my age cohort are dead while their parents are still alive.
I guess if I would add anything to what you say, it would be that the poverty we know is growing everywhere, it's lethal.
Folks need to know that.
With you all the way here sir. Gary's videos are an oasis of sanity in the wild insanity of social media. I'm heartened that a fairly regular bloke (albeit with a definite gift for communicating) talking about this stuff, will likely have a million subscribers before long.
@@warhamwaggkl Capitalism kills?
From Spain, this was absolute fire. Thanks!
We have wealth tax in Switzerland. I don't think the rich have left us.
wealth tax is better in every regard than CGT and IHT. you pay it yearly, making it less "painful", yet effective. It's difficult to hide assets, it's easy to hide gains. it involves less administration as the state does not need to track your assets and prove gains, just state what you own now. It encourages investment, as you must now at least outperform inflation and wealth tax together.
Yea, but you’re in Switzerland….
Switzerland isn’t a basket case like the UK.
Isn't it paid almost entirely by working people with the super rich avoiding it by being non domicile? Swiss banks are rather famous for being good at hiding assets...
you tax them on what they have in Switzerland, not their assets in other countries because that's under a different jurisdiction. Gary is saying let's tax someone in the UK who has house in Switzerland, so the Swiss person pays tax in the Switzerland, and then a tax in the UK for being Swiss.
Gary commented previously on how the rich will leave bonds and start buying assets. Well supposedly Blackrock (asset managers of the wealthy) have done a deal with a UK housebuilder (c.£1.4 Billion value) to buy 4500 houses solely for the purpose of renting them out, and no doubt are looking to buy the houses being off-loaded by buy to let landlords as well.
I think the important thing to remember is that these people don't think like you and I, they won't buy the houses to make some rent for 10 or 20 years, then sell it at a profit, they'll be looking to buy them to own them forever, generationally, so when you realise that you can see that as they replace the buyer side of the market, they won't care if they "over-pay" at today's market rates, because in 150 years time when you consider the rent they've taken and the capital appreciation, their descendants will look back and realise what a genius great, great, great grandpa Goldsmith was.
We're heading for serfdom.
technofeudalism
Yep, everyone hates the 'Mom and Pop' (Mum and Dad) landlord due to jealousy, but they'll hate the Blackrock brigade even more when it sinks in how useless they are and how little they care about their tenants.
@randomrandomness8743 Nothing to do with jealousy. It's to do with the obscene rents vs wages, it's to do with the extreme insecurity of tenure and about the very poor quality vs price. Serfs HATE being serfs no matter who their domineering master is.
ps I own my house outright.
Hey do you have a source for this?
Can't Blame them for making sound financial decisions. This generation need to up skill to be able to afford houses and planning laws need scrapping. Independent fair system maybe even AI and not corrupt slow useless city councils.
Basically the proposition is not "tax the rich people that live in your country," it's "tax the assets they hold in your country." They can leave, but they can only sell their assets if they want to extract the money held in them... To someone else who _would_ pay the taxes.
So discourage investment into this country even more?
@@user-nz8tz1vq2f Investment has nothing to do with tax and everything to do with business opportunity. If people have no money to spend because their money is being spent on mortgage, the national debt, bills, etc, then there are no customers for businesses and so businesses can't survive so therefore do not start.
Cutting taxes for the rich does nothing to generate customers for business, so the rich still aren't going to start business, what they will do instead is buy property which pushes prices up for everyone else and means people have even less money to spend. That's why cutting taxes for the rich doesn't grow the economy.
What grows the economy is making sure regular people have enough money to spend so that new businesses can meet the market demand and survive. The tax rate businesses pay is irrelevant as long as they can make the money back through their customer base. If businesses can sustain themselves then that is what leads to more investment.
Money is supposed to circulate, not accumulate. When it accumulates, that destroys economic growth and that is exactly why the UK hasn't had growth in a very long time.
They wealthy won't leave the UK because technically they're not here anyway, they're ghosts on paper. Their finances and assets live in an offshore systems that's so complex it can't be unraveled and it can't be traced back to them.
So, how do you even begin to tackle that.
@@user-nz8tz1vq2f He literally says it happens in China. People still invest in China regardless
@@user-nz8tz1vq2f ...What, precisely, do you think the taxes are _for?_
Anyway, right now the money from the assets are leaving the country _anyway._ That's where the profits go.
Thanks for all the effort you put into helping people understand. The more I listen the more confident I become when trying to spread the word.
Thank you Gary
I hope more people will listen to you
This video couldn’t be clearer. Thank you Gary. I hope all the regular working stiffs in the comments, simping for multi-millionaires of the rentier class understand this too.
It's wrong though. If you increase corporation tax and assets tax you shrink the economy. Gary knows this but he's pandering.
@Hiberno_sperg Please explain how the economy isn't already shrinking due to asset hoarding millionaires...and how do they contribute to the economy when they don't pay tax 🤔
@@chameleonj90 this is so typical. My original comment got deleted. Did you flag it?
@@chameleonj90
Those assets create capital so that credit can be issued and investment to new projects can be made.
@@Art-is-craft yeah investments in new projects which make them more money that they hoard, don't pay tax and don't pass on to the workers who still can't afford homes or basic living standards...
I asked my library to order Gary's book: The Trading Game and they did!! So now I can read it and so can others!! So happy to be spreading this information!!
Excellent idea. I think I'll do the same
@@howareyou857 👍
As a 39 year Physics teacher with very little to show for my 16 years of hard work, thanks for sharing your expertise Gaz. Wish there were more like you
You can't put yourself as a victim. Most of UK struggling, but live within your means, save 20% and invest in some sort of index fund via Stocks and Share ISA, and when you retire, will have normal living. If you unhappy with the financial, change your career, as a Physics teacher, should have loads of transferable skills, do your research, find something between what you like and what pays well and go for it.
@@DaN3-YT-UK fair point. And that's exactly what I've done which has worked so far. But the situation remains shit for teachers and many other hard-working british families. And with one less Physics teacher, the 180 kids a year will have to make do with a non-specialist in a STEM subject.
@@lawrencewinter Fair, I can't argue with that. However, the best voting system in my opinion is people's feet. If people will walk out of those positions, the decision makers will have to address it. Not an expert, but now, it is bad, but not bad enough for change to take place. If people would be more selfish, the ordinary people, and realise that no matter what they do, they sell time, most of us are selling our time. Be selfish, and do what is best for you, if everyone would do that, then the market would adjust.
Not an expert, just the way I see the word.
Start a side hustle business (easier said than done I know), leverage what you know, do something else that has potential to grow. Nobody can make significant "gains" by working for "the man".
@@DaN3-YT-UK flexibility is a privilege espceially for the rich. Not everyone has the freedom of just changing profession and you know it.
Glad the channel has blown up Gary, you’ve worked hard, keep it up, you’re helping ppl understand how the system actually works.
Louder for those at the back!!
We have an issue in the UK where people think they are wealthy because they’re doing better than the people they rub shoulders with not realising how deep in the mud we all are together. This is also what’s stopping people from pursuing more economically progressive ideas.
Reform support is rising solely based on fear-mongering based on immigration. People out there genuinely believe that foreigners are responsible for the continual fall in living standard. Completely ignoring the massive asset hoarding being perpetrated by the ultra wealthy =\.
It’s so ironic that there’s so much energy for weeding out those that don’t work and scrounge at the bottom of our society and absolutely none for those at the top that do the exact same thing 😂!!!
100% agreed anyone who has more than one property, anyone who earns more than 50k all needs to be taxed more! You don't need more than that!! anyone who has assets should have those assets given to ordinary people, its not right they have more! Tax the rich!!
People think Gary’s talking about them because they shop at Waitrose 😂 honey the rich don’t shop at Waitrose. They don’t do their own shopping!
@@slapjuice disagree. When you have Centrica making 900% profit over 2022 and employees seeing none of it, these huge companies should be taxed, hard. There's also ceo for tesco, an extra 5m to his/her bonus. Why play the same game of playing people against each other when gas, oil, share holders and ceo take 99% of the pie.
Look at Japan with VERY low immigration never mind illegal immigration: Crime is low, Housing getting cheaper each year, Public services not at breaking point.
Don’t you think that immigration puts a strain on public services? and housing?
Thankyou ! For clearing that up, like you say regular media weren't much use telling us. Glad your voice is louder & you're being proved right 👏
SAYING IT HOW IT ACTUALLY IS IN A WAY THAT IS SUPER CLEAR AND UNDERSTANDABLE.
APPRECIATE YOU GARY
USA - wealthiest 10% own 93% of stocks. Poorest 50% of Americans own less than 1%.
Inequality divergence is growing, with the rich gobbling-up ever more assets, at a faster rate.
The distortion has been mostly created by government/central bank policies which have been shifting left over the past 30 years?
@@stumac869citation needed please!
Utter bullshit
@@stumac869 Might have been a typo, but if you mean shifting right over the last 40-50 years then you are generally correct. The breaking of the unions combined with the libertarian and right lining economic thoughts winning out at the time (think Hayek or Friedman)
Utter rubbish. You’re completely ignoring pension funds, which own nearly half of all US stocks. And those pensions belong to ordinary people.
“There is a difference between what is right and what is easy”
Absolutely spot on mate
Seems very “easy” to say someone else should pay more tax i.e. the rich (who are not us).
For Britain and the problem faced by much of the west, is we are in terminal decline, as a society we’re in retirement phase, and we’re all fighting over a pie which is getting smaller.
Gary appears to be pushing buttons of economic envy as resolution, Britain isn’t poorer due successful British based entrepreneurs, while I’d agree we need be vigilant to foreign ownership and asset stripping. Until there’s an international treaty we won’t be wealthier in the long run by penalising our successful entrepreneurs.
What is right is stopping all taxation.❤
That's not a good quote at all.
Often times the two are the same and for some people, not doing what is right is extremely difficult.
@@sebrumble5994 Epstein?
Always nice to hear a voice of sanity when there is so much garbage being spouted right now in the media.
This is the voice of insanity and it’s why UK is so terrible compared to 90s and 00s
@@acz88 explain
@@acz88you're the voice of insanity. Keep hoping for change while doing exactly the same thing..
@@acz88 perhaps you are very rich ? :)
@@jutsie It's worth the pittance the rich pay to Molodovan's to have them sit on youtube all day trying to undermine anyone who challenges the right of the wealthy to parasitically drain a country's wealth. acz88's comment makes no sense, but it doesn't have to, it's just about creating noise and interference.
There can never be the perception of accordance with the general public on any issue. Far better to have us at each other's throats, create divisions over age, over race, over gender. Just don't let them see the con trick playing out in front of their noses.
If you've watched the documentary Hypernormalisation it describes all the tactics that Russia uses which it tested on its own people - fund groups on both sides, fund Black Lives Matter and fund their opponents, fund gangs of people smugglers and fund Reform UK. The wrong people learned the wrong lessons from seeing this and here we are.
“These people are not Gandalf”. Speakin my language. This channel is incredible man. Keep it up.
Hi Gary, I used to be a broker and I became largely disenfranchised by the state of western economics. I have changed tack and am now training to become a paramedic. Thank you for trying to educated people in the ways the system is currently broken
Excellent. You will see why the poor are poor and how they live and take more from the system than they contribute. You will also see how abuse of the system and mismanagement cause most of the problems with the NHS. I have and it's completely broken my perspective of people. It will be worth it when you get to genuinely help someone in need.
@@mrdave02
Yeah. It's all the fault of the poor! Not at all the fault of the tax-dodging rich mfs - the latter don't at ALL take more than they contribute . . .
This is a brilliant explanation of the difference between working rich and ownership rich, along with a simple explanation about taxing assets and how they can't go overseas and therefore they CAN be taxed. Runaway inequality is the single greatest threat to the viability of the UK and the US going forward. Taxing the ownership class is the only nonviolent alternative for reducing wealth inequality.
It's a nice explanation but it's wrong. What he's describing isn't an accurate representation of the tax system
@@MichaelRosmer you'll need to bring some evidence to support your position because I think Gary makes very strong points here.
Gary talks absolute garbage. Happy to discuss.
@@intenzityd3181 this is gibberish, plain and simple. Average working people, doing actual work and making actual paychecks, are not able to afford to own homes, provide for their families or build futures. It's not a "fiat vs assets" problem, it's a dramatic inequality of wealth and income problem.
TAX THE RICH OR EAT THEM. It's absolutely that simple.
There are many countries that do not allow foreign nationals to buy land or property in their countries. This stops situations whereby a block of flats is built in London and bought by foreign investors, stopping locals buying homes. Often these properties are never lived in and just held as an asset. This is a disaster for us, the little tax paying people.
But they allow offshore companies to own them. Not so simple and arguement
@@IMO1964 and even if offshore companies are not allowed, it's easy to set up an onshore company owned by an offshore company.
Fuckimg vulture funds are destroying the housing market in Ireland along with AirBnB.
It can be done, even if paper companies are set up to extract a countries wealth or own their assets. However what country has the resources to monitor that? The next problem is some trade agreements often have specific fish hook clauses relating to property, asset and company acquisition
@@IMO1964 close the loopholes.
Hi! I’m excited to be here in your channel and I’m interested in learning more about investing and saving up for my retirement but am a little confused about the whole process. Any advice or tips to get me started up would be greatly appreciated.
Retirement is now more difficult than it was in the past. I've been saving for a long time instead of investing, and right now I only have about $400K. considering all the inflation, i'm thinking of investing in stocks, i dont just have idea on market strategies.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800k
Mind if I ask you to recommend this particular coach you using their service?
Her name is Patricia Strain. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
I am an trainee accountant and I asked a qualified tax accountant what the biggest issue with a tax on wealth is and the first answer I got was “because rich people will leave”. There is a deep lack of understanding of this even amongst trained professionals
It's incredible the degree to which humans will believe something without checking if enough people say it. I'm as guilty of this as anyone. Another reason this channel is so urgent.
It might just be a lie they tell to scare the ill informed.
They will leave, trainee accountant. They will structure the sale (if they have to) so they pay no tax of those assets, on top of that, the tax that they cannot avoid will go to another jurisdiction.
The biggest issue with a tax on wealth, is generally speaking, it attempts to tax UNREALIZED gains. As an accountant (trainee or otherwise) you should know the problems with attempting such an idea.
This tax the rich stuff is always ill-conceived and its typically used by socialists as a catchphrase to get you to buy into their death cult
I think Gary’s idea here is that if you own £100m of UK assets, valued that much from the sale price when you bought them, you should pay a tax. You should have enough liquid assets to be able to pay for the tax on the illiquid assets you hold. Perhaps you could tell us what problems you see existing for such a policy @james3744 ..?
perhaps they are worried that they will lose their job and status if the rich people that pay them to do their accounts leave.
We’ve had Thatcherism since 1979 which serves the interests of the (mainly overseas) wealthy. The problem with Thatcherism is that you eventually run out of assets to sell to overseas investors so that they can rip off British consumers. Reduce inequality by taxing the rich.
Taxing the rich makes everyone poorer. They don't give you the money you lazy tool
We've still got schools, hospitals & roads that can be sold off. Thatcher made a good effort to sell off most the nation, but she forgot some stuff. I fully expect most of the above to be in the hands of Starmers newest buddy, blackrock, by 2030.
@@Nick-io9uk
Uk was bankrupt when Thatcher took over. It had inflation of 24% and unemployment of 15%. Labour will not be able to convince the public this time. Nobody bought the post 2008 crisis.
Thank you Gary!! This will be so useful to link to people when arguing with them about taxing the rich 💪🏼
How about googling why Jim Ratcliffe changed tax residency.
“In September 2020, Ratcliffe officially changed his tax residence from Hampshire to Monaco, a move that it is estimated will save him £4 billion in tax. “
Keep up the good fight. Glad to see your channel growing
I have been having this argument with people given the recent election so it’s nice to see the argument backed up by economics. I find the most disappointing thing about people claiming that you’ll lose the rich is that comes from the less affluent working classes, who are dissatisfied with crumbling infrastructure and being unable to get a doctors appointment, yet have been convinced that the very wealthiest being asked to pay their taxes is a threat.
This guy is full of shit. Half of what he said is factually WRONG. The rich already pays most of the taxes. Taxing the rich will only result in a country full of only poor people.
It’s why UK is broke today. But keep going down that communist road and rot your country some more.
I don’t live near UK. I don’t give a fuck about UK 😂
100%. Infuriating!
Could you please expend on “backed up by economics”?
The premise of argument in this video is the example of “Rishi’s” 700 million wealth, yet this is the Sunak’s wealth and primarily from his wife’s share of her parents multi billion dollar Indian IT business. So the simple truth is majority of their wealth has nothing to do with their residency or their UK assets. Now is Gary misinformed or is well aware he’s misleading his channel? If the magical tax system he’s referring to was in place it’d seem highly unlikely Akshata Murty’s wealth would be anywhere near the UK, which might suit your political ideology but it doesn’t make the UK wealthier so please don’t pretend that it does.
9.5k+ millionaires alrewdy left the UK this year....
That's because the poor hope maybe somehow they'll be rich one day. They're living in a world of hope otherwise there would be violent revolution.. So the TV perpetuates this thought. 🙊🙊🙈
In Italy you have to pay taxes on rents and passive income generated in Italy, even if you are a tax resident elsewhere
One of the few things we got right, allegedly XD
@@manuelrapino5917 yes but this does not stop the phenomenon, so there must be workarounds accessible only to the "initiates" with certain company structures. It would be interesting to dive deeper
This is also true in Britain if the asset is transparently owned and the rents are paid transparently. But for the rich, the asset isn't owned transparently. It will be in a complex legal structure and the rent will end up in an offshore bank account out of reach of the tax authorities. This will be true in Italy, France etc. You have to realise that the rich don't play by the same rules as the non-rich.
Read about the lengths Lewis Hamilton went to to avoid paying taxes on the private aircraft he purchased. This got disclosed by a rare investigative journalist and the same sort of thing happens every day. Many of the high earners in the UK provide these services to the super rich.
@@imbariegh there's always a way around the rules we know it (shell companies, plain fraud, bribes,. ..), but i would say inequality here in the UK is numerically and empirically more noticeable, even in the day to day life.
The same is true in the UK... Gary doesn't seem to understand tax laws in the UK. In the UK, if you have income in Italy, you are not taxed in the UK by UK govt, if you live in the UK and have have overseas income as you are taxed already in that country.
Excellent! Looking forward to this and watching the old one. Thank you. Love your ability as a communicator much appreciated.
In the book 'Rich Dad, Poor Dad', the author explains that whenever the government tries to take money from the rich, it ultimately harms itself.
Can you elaborate?
It is not just bricks and mortar assets it is also services and institutions. NHS health care and dentistry, veterinary practices, energy, water and transport are all owned by wealthy asset managers and corporations and look how much we have to pay for very little in return. A major reason councils are verging on bankruptcy is that both child care and care homes are now owned by corporations that charge huge amounts that councils are obliged to pay and further boost profits by minimal services. The Tories were never interested in small farmers. They were happy for them to go to the wall so industrial farming could grab what they wanted and the marginal land could just be re welded.
Councils are on the financial verge because they have driven out business and squandered their incomes on vanity projects. Just name a council.
@@Art-is-craftCameron and Osborne slashing their govt central funding plays a big part
@@annieschlater1534
Name a council.
@@Art-is-craft Every council in the U.K. had their central govt funding cut by George Osborne from 2013 during austerity. A National Audit Office (NAO) report, showed councils' spending power fell in real terms by more than 50% on a like-for-like basis between 2010-11 and 2020-21.
@@Art-is-craft incidentally you are coming up under a different name in my notifications which says David Devlin not Art -is-craft.
The UK has more offshore tax havens than any other country.
The people should go and get the money back.
Exactly, a big point missing from this is that nation states need to move to eradicate tax havens. The issue is that it is the tax havens, that includes places like Ireland, Holland, Switzerland, Luxembourg etc. that enable this shifting of wealth and avoidance of tax.
@@aldozilli1293i don't think you understand much about how this all works if you're saying that.
Luxembourg, Netherlands & Switzerland can actually be quite high tax.
Don't get misled by reading headlines designed to create outrage or push an agenda. You need to actually dive into the nuances of law to understand what's really going on
@@MichaelRosmer Enlighten me, you sound like you don't understand or you have an agenda yourself. Rosmer? What's that a Swiss banker's surname?
@@MichaelRosmer You mean high tax on working people?
@MichaelRosmer Great point.
Cassandra is an old myth, which has resonated through the ages.
As an ageing regular person I endorse this message.
Back in the day a Tory ex pm made a speech in the Lords about the inadvisability of selling off the family silver.
The filthy rich are rich from those bargain sales the short term profits from which kept Thatcher in power.
I remember Harold Macmillan making that speech, and he was not alone.
But the majority of boomers and older generations now dead didn't heed the warning.
And you and I (for how long I dunno) are reaping the whirlwind.
Being sufficiently clear sighted to see the bleeding obvious is not often a road to popularity or riches.
I just hope young people around now, don't look back from the rubble in forty years time remembering some chap on You Tube explaining where and how the wealth of the country has gone and wonder how so many were fooled for so long.
So taxing the rich means:
a) Land Value Tax
b) Property taxes (community charge needs serious reform- it's highly regressive now)
c) Taxes on dividends or taxes on value of shares held?
d) Taxes on assets such as gold and silver
etc etc- basically taxes on every asset held
Could work as follows. If you hold assets less than x amount (say £10million) no taxation
If you hold assets more than £10 million (could exclude you most valuable house- to avoid any issue of having a valuable home but limited income) you have to make an annual declaration of all the assets you own and then you pay x%- say 1% asset tax. HMRC can audit to verify your declaration- any assets not declared result in 100% fine (so if you declare £15m but fail to declare another £5million of assets, you get fined £5m). Huge incentive to make declaration accurate.
Governments would still Tax the little people regardless
Yes you are talking about a wealth tax. Some countries already have them such as France and Switzerland if I’m not mistaken. UK has focused too much on taxing consumption (crazy 19% VAT), income (for the bulk of people- getting up early 5 days per week to slog it out), and then corporations tax is pretty chunky- around 20% of a businesses profits- if you can make a profit. Plus all the NICs that workers and businesses pay. Needs a very big rebalance to tax wealth of the top 5% of wealthy folk imo.
The gold amd shares will leave UK in a couple of years.
You can then inly tax the land values which will be falling anyways due to the wealth flight outwards. It would mean bye bye NHS and bye bye state pensions.
@@VTh-f5x Yeah, it works only as a global tax, e.g. nowhere to escape. But that won't happen due to the current opposite tendencies.
@@couldntfindafreename yes. East will under cut the west and vice versa. Race to bottom.
Tax the wealth and build a society worth living in. Kudos, Gary.
I read the other day that foreign ownership of UK firms has gone from 10% in 1990 to 55% in 2020. I don't think you can be worried owners will leave when so many aren't here in the first place.
These remote asset owners also tend to want minimal involvement and push for quick returns rather than long term growth.
You’re completely missing the fact foreign investors would not invest in a higher tax rate country. You pleb.
Well it’s because the British don’t have the money anymore. Foreign people have money
Great video, fingers crossed the wealthy start getting taxed more. I’m in Australia and we really needs to tax the rich and pretty much everyone digging up our resources better. We’re failing massively at it here.
It ain't gonna happen. Why did billionaires fund Starmer? Why did Murdoch's media back him? Not because he was going to tax them more.
The top 20% pays 60% of taxes.
The bottom 80% pays 40% of all taxes.
The bottom 50% don’t pay any taxes.
Sorry but who needs to pay more?
Why do you want the wealthy to be taxed more? Your country has the world's largest steel reserves and almost no steel mills. You have massive coal reserves and you sell it all to China who burn it, build solar panels and wind turbines which they sell back to you. Then you guys pat yourselves on the back and claim to be "green". There is literally no amount of tax that can counteract that level of stupidity.
@@acz88Gary's fans are mostly brain dead English Socialists. There is literally no getting through to them.
The resources were stolen from the aboriginal people of Australia. I hope there is concern for their compensation as well.
As someone who commented on a previous video saying that the rich will leave, this is one of your best videos yet. Thanks for clarifying.
So the answer is to reform the tax system?
It's in the wealthy persons interest to keep the majority on their side, so they should pay their taxes and the government in any country should nationalise totally or in some part vital services. The fact that so many countries have privatised essential services such as transport, water and soon to be the NHS.
If things keep going in this direction there will be a revolution. I have sensed something in the air this year and the voting across europe has shown it to be true. People want change but everyone has to pay their fair share for the good of all, wealthy and not so wealthy.
Thanks Gary, you explained this subject so well, I believe I can now more confidently go ahead and spread this idea
Would be great if you did a history lesson around the circumstances that lead to better equality 50-60 yrs ago.
Pretty sure he's touched on this in previous vids - not sure it's explicitly titled in line with what you've asked tho
Mark Blyth has answers to that question. ua-cam.com/video/tJoe_daP0DE/v-deo.html
I'll tell you something about that equality it was for the middle classes the working classes were not wanted really. It's true there was free university education but who could afford to live on a student grant? Society was divvied up quite nicely for the middle classes by the middle classes. I know this because it was my actual life not from a book but I actually lived this. So you see when I hear that the middle classes are being defenestrated I'm not at my most sympathetic. Anyway of course tax the asset rich and it's important to say that and not high income earners. They will try to hide behind that difference won't they.
Post WWII Labour government
Britain was extremely poor 50-60 years ago. Is that your idea of equality? Having your savings pissed away with 25% inflation, being stuck in the working class no matter how hard you work? Left wing takes on history are bizarre to me.
Everyone needs to hear and understand this. The rich spend vast amounts to keep us all from realizing these facts.
Hey Gary and Viewers,
while I agree with many things you explain to the followers, I felt the urge to correct a few things you are portraying about the tax system. I work in Tax Law and the Tax Man is not stupid.
1) Property is taxed in the jurisdiction it is located in, no matter who owns it. Limited companies, trust funds, and individuals all have to file tax returns in every place they own real estate and pay income tax there, not based on their own residency.
Some double-tax treaties (contracts between two countries on how to handle matters of double taxation; e.g.; on dividends, earned income, etc.) reallocate that right to tax, but Western countries do not have these treaties to avoid double taxation with tax havens like the Bahamas.
2) If you draw dividends/payments from e.g. stocks, bonds, or privately held companies while you live in a low-tax country there is this mechanism called withholding tax (The UK does not impose it on dividend payments, but other countries do). So any dividend payments from for example German-sourced income going across borders to maybe the UAE requires a withholding tax of 25%. That is lower than domestic dividend tax rates, but still, HMRC gets its share before the money leaves the country. (The actual appropriateness of the rate being 25% is debatable and another topic.)
3) One more thing, many countries now levy an exit tax for everyone leaving the country with assets to their name. The same goes for companies relocating their operations. A fictional sale is assumed and tax is due on all the assets and company value, as if they had been sold at market rate. Also, if you move to low-tax countries, many jurisdictions already implemented "extended limited tax liability" which means that for up to a decade upon your move, you remain liable in the country you're moving away from with your worldwide income, as you're classified as someone who is potentially just moving away for tax optimisation.
Cheers, and have a great weekend everyone!
Thank you for your most sensible comment about this topic. Though it still boggles my mind that you can be held liable to pay tax in a country you no longer live in for up to ten years after you leave. That just seems wrong to me.
And the parts that Gary does not understand (or he does, but doesn't trust his viewers to understand)... [1] unrealized gains and (the problem of) taxation, [2] trusts and taxation, [3] carry forward losses and taxation [4] CGT calculation and taxation, [5] inter-group loans, treasury functions and taxation, and [6] structuring the sale of assets and taxation.
The tax man may not be stupid, but there is a hell of lot of voluminous local tax legislation without even looking at international obligations. Its a cat chasing its own tail.
If I may add to that for Gary's attention, it's not just assets owned by individuals, its corporations owning assets. There are a lot of convoluted group company structures with companies incorporated in various different countries and with different tax laws which make it difficult to see who the benificiaries are. The ultimate owners of these are the ones who benefit and will take money through dividends.
What specific tax changes would you make to balance the capital asset inequality? Changes to capital gains, income, inheritance tax?
@@james3744 Well put, inter-company base opens so many doors and closing one opens another, it’s a rabbit hole. Government is too busy chasing big law’s global structures to rethink the entire taxation system. Especially agree with you on the TLCFs.
@@Pravine9 I understand where you’re coming from, the layering and anonymity of beneficiaries is not the matter at hand. It’s about people leaving if taxes are increased and whether they’re taxed properly or not.
Those global structures you mentioned usually trigger taxes on every step of the earnings moving up the chain to the beneficiary, or if not, they’re usually being deferred.
What to change?
Eliminate “buy, borrow, die” on capital assets. (Germany for example, did it already)
Impose taxes on trusts once every 30 years or so to simulate a generational exchange to treat it the same way as asset exchanges among individuals.
Apart from that, taxation is often ineffective and not worth the effort, which is why many countries abandoned wealth tax and taxing unrealized gains, it needs to many people working on it and is therefore unaffordable. We all know that ownership is the way to wealth so we need more ways to make workers owners, like simplifying stock option plans and automatically investing National Insurance contributions and ISA contributions into the stock market to participate while investing in financial education for the masses.
Incentives are much easier to control that more tax layers.
Then decrease income tax for the average income range and charging a few percentage points more on income of the top executives and advisors who do have earned income in the millions while not capping national insurance contributions at any income level. Problem is: it could result in >60% taxes for earned income.
Only way to tax more regularly is fixing trust taxation to not let profits accumulate for eternity and maybe prohibit borrowing against stocks to force realisation of capital gains.
In Victorian and Georgian times, the mill owners lived beside the mill. You could point to the wealthy. This is a very narrow example, as many owned plantations in America and the Caribbean, but ai find it interesting in comparison to now. I haven't got a clue who owns what now.
Saudi Arabia and Russia own central London.
Yeah but there was always an entity above them who financed those mills in the first place.
I'm so grateful for everything you put out Gary. Besides telling our friends and our Mums, what else can we do to spread the word? Thank you
I’m going to send an email to my local MP and link Gary’s video - I’ve never done anything like that in my life! But something’s got to change! I’ve got to do something different! Good luck 🤞🏼 💪🏼
@@80schunkaymunkay Great idea!!
So good. Thank you.
Brilliant video, will be saving this to link to people who say this!
On this Gary is 100% right. Its time for all the classes/socio/economic groups below the Wealthy elite of billionnaires and corporations and their political cronies to unite in awareness and action worldwide to force change .
Those billionaires can take their capital elsewhere where. Ireland next door has already enticed mantra to its shores and guess what this might be a big surge to Ireland, Switzerland, Netherlands and the US.
@@Art-is-craft Did you watch the video? The owners of the national grid aren't just going to suddenly take all their power lines with them lol
@@keifer7813
So you want to tax National Grid plc on its wealth?
What if they cannot pay for the levy do you want them to sell off assets to pay for it or is your proposal on the basis of ability to pay?
@@Art-is-craft No, that's corporation tax. The discussion is about a wealth tax i.e taxing the owners of National Grid plc. Of course its means tested. If they meet the threshold for the wealth tax, we tax them.
@@keifer7813
You said the owners national grid I assume you meant the registered owners. Do you mean share holders?
Having heard similar in the past; they will leave the country. I previously reached the conclusion that wouldn't happen, and if they did somehow leave something new would fill the void. The country is the asset, the population is the customer base, these form the nation and cannot be separated. It's for the Government to implement measures to prevent the exploitation of the assets and customer base, as explained in the video.
It happened in the 1960s, the rich left the uk in great numbers. It depends a lot on what the tax rate is? Though the 1960s was at 90% above a certain amount
@@larrygerry985 High levels of innovation and industry occurred in USA in the 1950s at a time when the highest level of taxation was levied on the highest earners. Innovation wasn't stifled, but rather flourished. Perhaps then were more optimistic times!
Gary is mostly addressing the passive incomes of the wealthiest asset-owning class, rather than an earned income tax rate. Progressive tax probably works best, instead of clobbering the same high levels on those with more modest income-earning assets such as dividend paying equities.
tbh i don't think some of them leaving the country would be necessarily bad. no more monopoly/oligarchy by big corps could mean local businesses will thrive. even now it's not like uk manufacturers a lot of stuff, we're paying imports on those either way.
@@brianmorrison6636
The US had a 90% tax on realised gains not on gains. That 90% could be avoided by keeping the money in the business. Many did not withdraw at 90% against their business and instead invested the money into plant, resources and employees. Is that what you mean?
@larrygerry985 a lot of those that left in the 1960's went to South Africa. They are now desperately using their uk citizenship rights to send their kids back to live in the UK. Also returning themselves and claiming UK pension and pension credits
Impeccable, as always. I can hear your frustration with people who don't get it.
@garyseconomics love your work. I was telling a friend about your channel and was explaining it to them. I found myself using the term 'ultra rich' or 'assest rich' rather than just 'rich' it really helped to differentiate and explain we're not the 'rich' you're talking about. PS. Fuck the frog
Working for a living = wealth creation, ownership of assets = wealth extraction. At some point we stopped understanding the difference. We need to remember again.
Well put
Good point. Note you need to maintain the right incentivizes in there.
That's cause we decided to base our entire economy on people shuffling bits of paper around, calling it 'wealth generation' - no wonder everything is so confused
Why would I put so much into creating something if I can’t extract from it once it’s made? Unlikely PAYE; a field doesn’t yield as you sew. A good farmer creates better systems so they can work less and extract more. As per they guy above: the correct incentives need to be in place.
@RugbyPass81 define “the rich”?
This is the first time I've heard a proper rebuttal explained - Thank You!
Too good Gary. Clear on how to fix the problem. Looking forward to getting the message out 👍
The problem is that these people are wealthy enough to spend enough money and pay for resources to thwart most attempts to tax them. People are easily bribed even if that is in an indirect and morally acceptable way.
Also, large companies like Google and Facebook, Merck and Pfizer have left countries like the US and Germany for tax havens like Ireland.
Ireland is not a tax haven. Ireland was raped for centuries by the Europeans and British. To get a head start it needs its own tax policy. Would you not agree.
Agree Pfizer left Sandwich in Kent due to local government pissing them off !
Not exactly correct. Try reading the Google 10k and see how much tax they've paid relative to net income
@@MichaelRosmer far less than had they been elsewhere, I'm sure
Going to email Rachel Reeves and my new Labour MP. Even if someone else deals with the emails, if they see emails from lots of people saying something about ‘wealth inequality’ and taxing people with ‘extreme wealth’ in the title, at least it will let them know it’s something people are bothered about.
Even Labour know it would catastrophic to tax the rich.
Agree that we all need to communicate to our MPs about wealth inequality and the need to redress the situation 👍(search contact my MP).
@@maaziy_ghaziyIYI why
@@maaziy_ghaziyIYII’m ready to be part of a movement that stands up to bullies.
@@maaziy_ghaziyIYI Explain why you say that after watching this video. Or did you not watch it?
KNOWLEDGE (like yours Gary) IS POWER.
I hope you keep going and the bastards don’t get you down.
A society cannot be held hostage by the threat of super riches leaving the country. It's ridiculous that some people justify the current situation by saying that we need to accept that some people contribute less, because making them contribute more will result in them contributing less. It's almost as stupid argument as the reasoning of why private schools shouldn't be paying the same tax as every other business in the UK.
I think that's a fair position sort of.
The issue is I think more one of not understanding the trade offs you're taking and needing to properly evaluate those.
Nothing is free so you need to ask if you think you're getting this good thing what is the price you're paying? When you really understand then you can decide
@@MichaelRosmer Not when 20%+ people is under the poverty line and the rest of the things happening in Britain...Politically it is unjustifiable when we are on the way to the Dickensian world and this way of thinking is a contribution factor. Too big to fail companies and too big to fail individuals. Look at where the UK is with them. Thames Water was privatised via a leveraged buyout. So the general public is paying for the debt, the company paid shareholders instead of fixing the infrastructure and then they want a 49% increase on bills to cover the mistakes they made. And on top of this they will get reduced fines comparing to the compliant companies, because they would not be able to get out of the hole they dug themselves. The excuse here is the same...it would be more expensive to do anything else.
@@MichaelRosmer You people always say "Nothing is free nothing is free" but no one is saying that it's free?!! The fact is that NOT doing this COSTS US. Choosing to ignore the issue of inequality has an associated cost, this basic economics: opportunity costs. The more we allow this continue, the worse things get.
and why they discriminate based on sex
@@finalcut612 Well, YOU people always say ‘we need to do this because it costs us’ without realising that if we ‘do this’ it ends up costing us even bloody more! Labour notoriously short sighted economically, I’m very very worried for the future of this country
The rents, mortgages and council tax bills as well as the electricity bill are a huge amount to be found by families. Single people often can't rent homes or if they do it's a struggle.
its a struggle when you dont have a good job yea
if you dont care/didnt care to get qualifications better than your neighbour then you cant complain that lifes a struggle can you.
Wealthy people pay that as well.
I’m guessing the qualifications that make you so superior to your neighbour, weren’t in English.
Land registry is notoriously hard to examine. The Scottish Government has tried to find out who owns Scotland and the same has been done in England through private efforts... very little progress has been made. I can only assume that there is no motivation to do this. It seems fairly clear to me that if you turned the tables and gave , say , 12 months for those Land owners to declare their interests in Land, with the penalty for non compliance being that the Land would revert to the state. Similarly for any asset.
Then taxing those assets would be a matter of record.
If you have a Labour Government who were founded to literally represent the working classes ( the clue is in the name) , who are unwilling to make any in-roads in to the inequalities in this Country, whilst we have seen an explosion of food banks, then you have to ask who are these people really working for?
Labour hasn't represented the working class since the 80s.
We need to be voting Left, these center left parties are economically right wing with slightly more progressive social policies, both labour and the Tories represent corporate interests.
Respect to you I would love to be part of you stand for I'm 63 years old and it's good to look at things differently take care brother
Property cannot leave - tax it. The higher the value, the higher the tax.
Only someone that don't own anything could say something like this.when I get taxed for stuff I've already paid for from my hard earned taxed pounds on a yearly basis its not my property anymore I'm merely renting it
I left. Took my 3 businesses with me. Communism doesn't work pal.
@@Spencertarring out of curiosity, what happened to your previous customers? Did they move to a competitor, did they come with you or did they do without the service? I'm just curious about what happened to them, given the subject of this video.
Depends what the goal is. If its to make property cheaper, yeah, that will work. If its to raise revenue, not so much. Values are a matter of opinion, as they say, and an annual property tax eats into yields, the value must reduce accordingly to hold up yields.
@@Spencertarring Could you explain your statement in a less passive aggressive way? I think it would be very helpful in this discussion.
@garyseconomics I think another version of the argument "the rich will leave" is that imposing a wealth tax is going to disincentivise future investments.
In this video you've effectively argued against the notion that existing owners of assets can avoid a wealth tax by leaving the country. But don't economies also rely on continued investments in the pursuit of growth, and don't governments rely on investors buying government bonds in order to raise debt?
Could you please comment on the consequences of reduced investment in / into the UK due to the introduction of a less attractive tax system, and how one should address this problem?
Good point, thanks for raising this I would also like to know how this could be addressed.
Thanks for raising this. Just recently I was arguing for a wealth tax with an Australian friend and he said but Australia needs foreign investment.
but hes talking bout owning property, how is owning property investing in the economy the only people who benefit from that are the companies who make the property in the first place, when some one else who lives in this country could do that instead for a lower cost
@@hoktoshinkenmaster the issue I'm describing is that people who wish to invest their money will seek the best return on their investment. If a person has the choice between investing in an asset which is subject to a wealth tax and an equivalent asset which isn't, then I'd expect most people to choose the latter, unless there's very strong reasons to nonetheless invest in the former inspite of the greater tax burden.
Crucially this applies to foreign nationals as well as British citizens since any Brit can easily invest their wealth in non British assets (as well as leave).
This also applies to all kinds of assets and not just real estate.
As far as I can tell, the consequence will be that unless Gary's tax proposals are implemented in many, if not all, major economies, the level of investment in the UK will substantially drop.
I'm a big fan of Gary's purpose and vision, but this is an aspect that I've not been able to reason away.
I'm not an economics expert and would therefore appreciate Gary's take on this.
@@cormacbiggar
The straightforward counter is that rich investors generally invest to extract value, not to improve the investment (essentially forms of rent). So those investments don't actually grow the economy for anyone except the very rich. If you disincentivise them, they stop extracting rent from the economy and everyone else in the country gets a bigger slice of the pie.
French Economist Gabriel Zucman is calling for a 2% Global tax on the Ultra Rich. Germany, Spain, South Africa and Brazil have all expressed support and the French Economy and Finance Minister has stated commitment to implementing at G20, OECD, and EU levels. Not sure 2% is enough when their wealth is increasing by 21-27% year on year, but it's definitely a step in the right direction.
Socialists always come out of the wood work in these times of broke governments, that couldn't run a piss up in brewery. Wasting taxes and they need more and more and more.
Somebody who has a net worth of 1 billion but only has 2 million in cash would have to sell of some of that 1 billion to pay the tax. So do you think it would work.
It is worth pointing out that the US taxes on citizenship. So, as an American citizen living elsewhere (as I do, in the UK) I am responsible for filing and potentially paying tax to the US every year. In practice, I don't pay anything to the US because I already pay a higher tax rate on my income in the UK and there is a tax treaty between the US and UK saying that because I already pay more tax in the UK and I live in the UK, I don't need to pay US taxes. It is no doubt different for businesses and people that earn enough to pay accountants and lawyers to move their non-US income around so it doesn't look like they have any US tax reporting requirements or have to pay US tax. The US and Eritrea are the only countries in the world that tax you just because you are a citizen (even if you don't live there).
I think what you are saying is basically correct, but there is a big caveat, and also a big caveat to the caveat.
Big caveat: The wealthy have real-time influence over international trade, including debt and currency trade. Therefore if you go after them, they are in a position to punish the nation collectively by pushing currency value down and debt interest up. For a country with the reliance on imports that our has, this is very bad. What happened to Liz Truss was essentially just a taste of this kind of punishment.
Caveat to the caveat: The UK is a major cog in the world economy. Therefore if the government were willing to play hardball with the investor class - in terms of changing regulations around investment, legislating to prevent capital flight, using the BoE as a creditor and credibly theatening to renege on our international debts - they would have to back down, because the UK is quite simply "too big to fail" in terms of international economic fallout.
But for that you need a government with the courage to face up to the finacial markets, call out their anti-democratic influence over economic policy for what it is, and deal with the short-term economic shocks that the conflict would entail with a kind of "war economy" mentality (market interventions, forced loans, rationing etc etc). I dare say such a government is a very (very very) long way from what we now have.
Still you gotta start somewhere, so thanks for your efforts!
Also a friend of mine came up with this (related) argument - "If the UK Government increased taxes on property then international property investors would switch new investments to those countries with lesser rates of tax. Higher taxes on property here would cause said property to lose value. Capital seeks the highest return." Is he correct?
@@stuartelton2678 Yeah absolutely, taxes on property will depress property prices, so you have to factor in that whatever your headline projected yield from that tax may be, the real yield will be substantially less. It also causes all kinds of short term problems for mortgage holders. Again, if the government hasn't got the stones to bring in emergency measures (in this case a BoE scheme to provide low-interest mortgages to those in distress) it would be a disaster. But if they do what it takes to tackle the short-term problem, in the longer term there are many more winners than losers, because the losers are those who treat housing as a financial asset, while the winners are anyone who relies on wages to cover housing costs (whether through mortgages or through rent).
@stuartelton2678 Switch means sell. The asset stays in place. Sell to someone who will pay the tax.
Yes Big man. A couple of questions...
1) What percentage of the assets are owned by 'foreign investors'?
2) How much money does this amount to?
3) How much tax can we raise from the rich? i.e rate/total
4) What benefit will we get from taxing the rich?
Can we fight back by not paying Council Tax/other taxes? If so, educate us please!
Awesome video, this will soon start gaining momentum! Keep it up G!!
The rich led the charge to strip the Councils of their assets starting with Thatcher. If we stop paying Council Tax the situation gets worse, not better. We need to provide the means and drive for the government, both national and local to start reacquiring some assets. Then, we the people, start to gain moneys into our services in much the same way as the rich do - through passive income.
The far more important question.
What is that tax money going to be spent on. The government wastes so much money as it is with a massive deficit. What's the point in raising more taxes if the government is going to waste it.
We send million in foreign aid to India. India has its own space programme, we don't yet we send them aid.
It isn't a race to the bottom @@quillo2747
@@quillo2747 It's all part of trying to keep India onside with tariffs and diplomacy. And since India is a major player in the so-called BRICS bloc the UK along with the much of the west is trying to prevent them from turning too much towards Russia/China. Think of it as bribes on an international scale cloaked as aid to the poor or helping Indian transform into a 'net zero' economy.
Over 1000 views in 11 minutes! See how far this channel has come.
Thank you Gary! I only recently discovered your channel. I have been pounding the table for years saying we need to save our country/economy/future from collapse and it starts with taxing the rich. Thank you for getting this message out. Also thank you for providing us with some very helpful information we can use when talking with our friends and family. I’m so grateful that there are great people like you out there trying to make a difference for our future.
*let them leave* and when they try to their physical assets and can't, they'll come back or sell it off, and we should just demand that it can only be sold to UK nationals who live here and pay tax.
At a preferential rate. It’s there to be taken back.
fantasy land. Foreigners can buy property in virtually any country they like.
if they dont want to pay, we either take it back as payment, or force sale as payment and stipulate rules on who the buyer may be
@@littlewol2620 you ain't gonna do any of that 😂
@@books4739 didnt say "we " would. but it is the rational answer. as gary said. it will not be easy.
I remember talking to a guy on a plane and he said that the way to break the economy of a country is to sell off all the public assets and here we are, in the UK.
I believe in the near future, the recent history of the UK will be studied as the definition of disaster economics, and our children and grand children will ask how we allowed this to happen.
More power to you Gary.
Keep up the good fight!
I really enjoy your videos. Thank you. Don't stop lobbying. Greens and Libs could do with this explanation on their channels for the next election. You are helping to change the rhetoric 🎉
This is one of the most important videos on the internet!
So, spread the word!
Great answer to such a common criticism of taxing the filthy rich.
Drop all income tax. Raise tax somewhere else and not on productivity.
The country would be bouncing if they dropped income tax and could get it elsewhere instead, imagine having an extra £10k a year to play with
@@UIM_Moose you're right, people having disposable income is the main driver in economic growth via consumerism, if no one's buying goods or services, growth stops.
The stagnation of people literally working to survive will be the eventual collapse of the whole system, less purchasing of goods/services means these businesses go under, less jobs, higher unemployment, the longer the snake eats it's tail the worse it becomes.
I think the scam of a trickle down economy has well and truly come home to roost.
They papered over the cracks from the crash in 2008, we've limped along ever since, being told we're OK, our growth is better than other countries blah,blah,blah, yet the vast majority of us are feeling the real effects in our standard of living and way of life, which has declined massively.
I think change will happen regardless because we're circling the drain, and it's getting quicker.
@@UIM_Moose .....and government spending would plummet (NHS, roads, police, armed forces....), or government borrowing would balloon : interest rates would have to rise significantly for the government to borrow more than £250 billion per annum (latest Income Tax receipts : 2022-2023). You'd keep more of your income, but the government would be unable to provide the level of services that we, as a country, have decided to spend. Your mortgage would rise significantly, the pound would collapse so imported goods would be more expensive. Be very, very careful what you wish for - we'd be bouncing our way to widespread poverty and economic oblivion.
Trouble is most wealth taxes have been abandoned in Europe as they generate only 0.5% of tax revenue - only Norway, the Swiss and Spain keep them up - the super rich are super tax literate in avoiding them
You don't need a direct wealth tax in order to tax wealth. Wealth is owned in industry, land, companies, stocks and bonds. You can tax these assets, for example company tax rates in 'Western' countries are across the board lower than income taxes. Land taxes also don't exist in many countries compared to the stamp duties that many pay which is a tax on buyers. You can tax the things that people own which will tax their wealth without a tax directly on wealth.
Not sure where you're getting this idea from, because its not fact. Even France has a wealth tax it was reformed and changed names (to IFI in 2018) but wasnt abandoned; 0-1.5% of what people gain starting with an estate over 1.3M euros. You speak about 0.5% of tax like its nothing, 0.7% of UK tax revenue funds ALL academic research. Doubling the input to this would have profound impact on our economy within a decade.
That's what Gary described as State Capture, and like gunk in the drains blocking the flow of water, it's a perennial problem because extendive asset wealth gives you power and influence. But it doesn't have to be that way. If we don't put the effort to ensure our politicians serve the interests of every citizen, then that's on us. Our ancestors came back after World War II, and used the ballot box to draw a line in the sand. And unfortunately, we can't say "one and done". It's only taken 50 years or so to erode that legacy, of the electorate really taking back control. We didn't realise that that legacy had to be defended. A legacy that fought ignorance and despair, cannot defend itself against a system that relies on leveraging some of the worst traits in human nature. We must protect ourselves against those traits getting out of control in those we reward for exploiting them. Democracy is the only means the people have to tame it, because to govern the country requires our approval to have legitimacy. The cynical say if voting meant anything, they wouldn't let us do it. But I say, if voting meant nothing, why do the plutocrats spend so much time, effort, and money on trying to influence who and what we vote for? Why did certain people try to make it more difficult for certain citizens to vote. For once, Rees-Mogg wasn't lying when he admitted that Voter ID was gerrymandeting. That's why our voting system needs to upgraded and made more effective democratically. We have to move to a system where every vote counts. It's only one defence against those who would manipulate us, but it's an essential one for our democracy to act more effectively. We have to have systems of governing that ensure that our best interests of our communities and country are served. We have to stop being dependent on being lucky. Our democracy needs strengthening, and so do our communities. Neoliberalism isnt just an economic experiment gone badly wrong. It was a social and political one gone awry too. The ideology wanted us to believe that there was no such thing as Society, until those pushing that nonsense wanted it to replace the state's collective support that had been deliberatively withdrawn to provide bug tax cuts to cipirations and their owners, who had 8nturn suppressed wage growth fir decades. They encouraged us to believe that John Donne was wrong when he asserted that No An is an Island, written when the powerful wealthy elite wreaked havoc on their people to entrenched their power. Donne wrote that passage as a survivor of political and economic upheaval in England in the late 16th century that was dressed up as a religious and political struggle, but was the wealthy throwing the little people under the bus yet again, to secure their power. Like a gardener having to keep on weeding the garden, the citizens if this nation have to keep fighting time and time again, against those who would put themselves above the interests of the country and their people. And as austerity and the pandemic showed us, the tendency for the asset wealthy and entitled to throw poor people under the bus never goes away. So we must be able to weed them out. And we must work at it to protect the harvest of our sweat, of our hard work being stolen and hoarded while we suffer. That's the part 9f our history not exactly taught and it should be, because the work can never stop, can it? It's not the 16th century. it's not the 20th century. It's the 21st century. And the work has to continue for the next generation not to slip into poverty again.
@@aoikk9966
Europe is a failing market place and the UK is about to follow this example. I wonder will labour try to re-enter the EU as it sinks.
Don’t a lot of countries tax income earned within their borders? So in your example of someone owning assets in France but living in the Cayman Islands, wouldn’t they pay tax on any rental income earned within the country they reside i.e France?
What about the fact that a greater proportion of assets are becoming digital in the modern era? Estimates say digital assets are currently 20% of global wealth and growing each year.
For example, almost all of my assets are UA-cam videos which can be moved abroad with no problems. I’m not rich, what I’m alluding to is you can’t tax rich people who have significant assets in the digital realm which can easily cross boarders.
It's a really interesting point!
Edit: Maybe it's more important where the income is paid from (for instance where does youtube send you the money from) and where the recipient of the income lives rather than where the digital asset is stored. Kind of like a source of foreign income. You'll have to declare it in the country in which you reside.
The 171 UK billionaires together are worth around £655 billion. If we confiscated 100% of their wealth, we’d raise enough to run the UK government for about 6 months.
Perhaps our problem isn't how much billionaires have but how much and where politicians spend.
Yeah, but it's not about taking all of it in one go. Its about taking 30% every year to help fund services
I do get your point though
I think its both. The left makes a sound point regarding inequality and rent seeking, while the right makes a sound point regarding government inefficiency and overspending. An ideal government would take action on all of those things.
There is a reason the largest GDP growth in UK history was when we had the highest top rate of tax and everytime it has been lowered so has our gdp growth
When was this magical period.
@@Art-is-craft what are you on about, post world war 2.
@@Alex-cw3rz
I wanted to know what period you were referring to. Britains GDP post WW2 was driven by rebuilding the country once that party stopped there was the 1970s economy.
@@Art-is-craft how do you think we paid to rebuild the country after WW2?
@@Art-is-craftfallacy of the single cause
Hi. I love your content. I work in Finance and came across you from your insider interview. I honestly think you could unlock a whole new audience with more cuts in your content. I’m happy to sit here and watch you talk but I feel like younger people need some more content dense stuff
The usual important message put across very clearly. The main objection that’ll be put up is going to be “how do we identify the beneficial owners with all the myriad Cayman, BVI, CI etc based companies hiding them?” Well let me tell you this can be done, it revolves around bank accounts and money transfers, no bank account should be open without beneficial ownership being established and no money transfers allowed until this is the case. Establishing the chain of asset ownership > bank account > beneficial owners ties the wealthy to their assets which we can then tax.
Keep telling the truth!
@garyseconomics Most of the videos I've watched you put out effectively argue for a wealth tax.
This is the first video I've seen which additionally states that we also need to implement taxation based on asset / transaction location rather than the owner's domicile. I think this is a really important point which you should be making in every single breadth in which you advocate for a wealth tax. They're two policy proposals which are inextricably linked and therefore ought to be presented hand in hand, always.
I am 53 and I have been hearing this argument since I was a kid. I have always believed that taxing the rich is fair and will not result in them leaving.
Problem is a big part of the issue is that those of us who are high earners via a job, or own their business and have a good life through it, THINK! that they are part of this 'Rich' club. They are working class and always have been.
Politics and media have made the term 'Working class' a negative dirty thing, so we try to separate ourselves from it when life is going well. Leaves us wide open to politicians using this to their advantage and putting fear into high earners by saying "see they are going increase your taxes". 🤦🏿♂️ So frustrating that people can't see through it!
Exactly this: if your main source of income is from a job or work that you do, you're working class. If your main source of income comes from your ownership of assets, you're asset class. There's another class whose main income comes from receipt of benefits, including pensions; this cohort could be referred to as benefit class, but this also has negative connotations which have been instilled into others
That said, the middle class is where people's wealth is a mix of working for their money and owning assets, like a house. Lot of snobbery around what's essentially a caste system based on perceived wealth, which is nuts given that 85% of the money in the UK economy is credit money. We're (nearly) all living on tick
Speaking as someone who was nearly bankrupted by the Revenue on my fairly average earnings as a contractor I want to see your ideas put to work by the government
Just say taxing the ultra rich, instead of explaining not taxing the normal rich.
But non residents are liable to tax on uk rental income. They don’t get it tax free.
@@mattsmith1157 This is what I thought was already happening aswell? Unless there’s some difference when owning the properties in a limited company which is registered abroad or something?
@@킹링-c9l Foreign individuals and foreign companies are both liable to tax on UK property income and on gains they make on the sale of UK properties. The same rules apply in most western countries so it is difficult to avoid tax on physical assets held in a country.
@@mattsmith1157 in that case I don’t understand which tax loophole Gary is referring to regarding property
There are ways to release wealth from Perry you own that aren't taxed so efficiently. For instance, look at Thames Water. The owners, or major shareholders, loaded the corporation up with debt repayable to the same shareholders, who directly or indirectly owned the companies that were Thames Water's creditors.
@@킹링-c9li think he is referring to the secondary mortgage market, ie mortgage backed securities, not an individual person owning a few houses earning rental income and the gain on the price increase when selling any of those houses.
There's also a very special category of "the rich" in UK which exploited non-dom status. Most people probably don't understand that this category of the rich and super-rich never actually helped UK with anything. They are here in the UK because their assets and income are located abroad, so no matter what UK does they cannot be taxed or cannot be taxed easily. And UK made it extremely easy for these non-doms to operate such model. So whether they stay in UK or go makes no difference to UK economy really because they never paid tax here and never will. But they can make excessive demands on UK infrastructure by keeping many empty houses which are not providing accommodation to anyone. By making huge demands even on drinking water systems - famous case - Rishi Sunak's MacMansion in north of England required huge water resource diverted towards his property because he decided to construct huge swimming pool - which again will be unused most of the time, but requires resources which could be used by entire community in a communal swimming pool.
I like the sound of this but raising wealth taxes in Norway made many of the richest Norwegians to leave the country. Their argument is often that they have to sell assets to pay for the taxes which they don't like. So what is it that Norway can do differently? 🤔
Mostly the rich leave for Switzerland that also has a wealth tax but not as high.
Tax wealth over income!
Harder to say than do
Well...if they do it's no big loss since most of them don't pay taxes anyway
Well it is because 1) they do pay tax - the vast majority of the tax pot comes from the higher earners. 2) if they own companies, everyone employed by them will be either unemployed or forced to relocate which means they will help a different economy.
Anyone with enough money to help someone else, without adverse effects on their own financial position, is making a choice.
Let us not operate under a misapprehension. The rich stand on the shoulders of the working man but do not want to reward a single one of them.
Hey! Could you make a video suggesting what these taxes would look like,
a) would it be a yearly tax on all assets owned as some are suggesting in the comments - what is the system for valuing these assets?
b) Is it just a tax on the income and CGT and IHT on the assets no matter where in the world you live - do we have any existing idea how much money that would bring in?