How about the majority of people, who will just spend that extra money in the first years on iphones and after that complain that everything got more expensive?
@@lukeboy61do you mean emigration? Quite simple, if you, your parents and your grandparents weren’t born in the British Isles then the tax break doesn’t apply to you.
@@BushmanOutdoors yes, I mean there would be an incentive to leave the country with the accumulated wealth after you've taken advantage of the tax break. But yeah I get the two mixed up sometimes. I'll leave it there so these messages make sense
@@BushmanOutdoorsyou do realise it would be ethnic Brits who would abuse this right? Look at the housing market they would just work for 5 years and leave for cheaper rent and lower tax. That's the worst solution ever
To do some numbers on this: The average income for 22-29 year olds in the UK is £30k. At that income level, someone will pay about £3.5k in tax a year and take home £26.5k. So in this proposed system they would take home £290 more a month and use up their allowance over the course of 8 years. Just thought some people might find that interesting.
Did you factor NI payments into that? Because I assume that even if this system was brought in and you paid no income tax for a while you'd still make NI payments.
@tomfurey9062 this doesn't factor in NI. Does NI not get deduced based on your gros income rather than your net income? So the maths would still work out to be the same difference under the proposed new system.
@@vel0_rouge good point, although I did realise when reading your response that you could make that 8 years last longer if you have a Net Pay tax relief pension as your pension money is payed before you are taxed so your taxable income is your salary minus your pension contributions.
When income tax was created here in New Zealand no one who earned less then $100k of today's money had to pay any tax. Then they changed it and took it from people earning $20k today per year
Most people would still not build capital..they'll just spend the extra money in their pocket and still be in the same position by the time they have to pay tax
Only works if you invest it. Most people learn to spend what's in their pockets, the trick with money is to learn how to make it work for you. That's what wealthy people understand
@@J_h-3ik And that’s perfectly okay. They would be pumping money into the economy. Doesn’t matter what you do with your money as long as it gets spent eventually in some way. You come to this earth with nothing and you’ll leave with nothing so you might as well spend every penny.
I’m 60 and I think this is brilliant. Such tax breaks would have made it so much easier to buy our house and bring up children. With fewer and fewer people having children, this would help tremendously.
Um, so what? Why should the government be social engineering things like home ownership and procreation?? People live their lives, let them. Get power-hungry psychopathic people away from our wallets, our families, our bedrooms, our… everything, to the extent possible. They do NOT care about you at a fundamental level.
But now that introduces other problems, like now that more people can afford houses, prices for those houses go up. Its not like more builders magically exist to fill even the current demand, so theyd go up until those same people that managed to save that money to buy a house, could no longer afford the thing they were saving for in the first place.
@@guyfromdubai the reason people can’t afford housing isn’t because people are just willing to pay more, it’s the banks and businesses who are willing to buy above market value which inflates the market and artificially reduces supply. Building more houses isn’t going to solve the issue, it’s just going to feed it as the homes being built are paid for by investors or bought up by investors at above market prices. The only way this gets resolved is through new zoning legislation which restricts the types of ownership in certain areas, preventing the rich from using homes as investment portfolios.
@@guyfromdubaiWhere I live which is Arizona, there is several neighborhoods of just empty houses all own by the same company, prices doesn't go any lower even years after they are built. I used to work as a door to door salesman and every now and then I come back to the neighborhoods, the houses are still empty and up for sales.
_"Such tax breaks would have made it so much easier to buy our house and bring up children. "_ Except this statement demonstrates exactly why his idea is rubbish. He posited that this exemption was a way to _accumulate wealth,_ and the first thing you mention is upon what and upon whom you would have spent it.
Every bit of financial advice I've ever been exposed to since being a teenager has basically boiled down to "as early as you can, always set aside a chunk of whatever you earn towards retirement so that you can finally rest easy once you're old as hell and broken". Sounds great, in the meantime I could barely keep the lights on or get gasoline and food at certain times in my life, and forget about buying a house or saving money that can only be spent once my spirit is sapped.
@commonconservative7551 Your take is from someone whos more well off than most people, or i could be wrong. Dont try to accused someone for something with a huge lack of information about a person. Thats like trying to diagnose someone with cancer or a mental ailment without knowing the person and have the credentials to do so.
In Australia the tax breaks for senior citizens are obscene - and there is nothing that really helps young people - and I say this as someone about to retire.....
It is like that, as it is many countries, because seniors vote. Usually at a rate of 85+%. Young people (especially under 25) generally do not vote. It’s a numbers game, simply.
Because young people don't vote. Oldies vote and are looking for short term gains in tax cuts so more likely to vote for the liberal party. Them giving anything to the young is useless as far as political point scoring is concerned..
He's absolutely right. Our societies need to start genuinely supporting our young hardworking generations instead of no limits at-all-costs ruthlessly and mercilessly exploiting our young hardworking generations 💔
The Chinese are the first to stand up to the treatment of youngsters with their Bai Lan lifestyle choice. It's not good they feel the need to do that, but too many systems are skewed against the youth
@serge2cool exactly! This is exactly what is going on! I have been thinking the exact same thing. You can see this same thing going on in several countries. We need to start acknowledging what is actually going on.
Don't ask Canadians how we're doing in 2024. As 40.000 would not be enough for 1 person to survive living in moms basement. My rent alone costs 2300 without utilities. Groceries for 2 adults and 1 kid 1500. Don't get me started about the cost of electricity, or heating, or the cost of owning a car, since insurance alone is 250 a month. Cell phone with limited internet access and cheapest plan is around a 100. Tax free wages for a few years are useless, when you are in a societal financial prison hell.
Not really. I entered the workforce at 16. (But worked on a farm for $$ since I was 11) My income was significantly higher by my mid-20s, and I'm pretty sure his proposal would lead to a higher percentage of tax ON that income.
I hated paying tax when I was 16 and 17, because the government was taking my money but wouldn’t give me a vote, so I didn’t get to have a say in what they did with the money I was forced into giving them. I’m in my 30’s now and I still feel it’s grossly unfair, a ridiculous inequality that should be remedied immediately.
I’m watching this, a 30yr old sitting in an underfunded public school in a very wealthy area, frustrated that my state and county both give property tax waivers to anyone over 65, while I’m trying to set aside money for my property taxes. If the retirees in this area paid property taxes to fund this school we wouldn’t be underfunded.
Those people over 65 have paid taxes towards schools their entire working lives, and most probably had children attending school at one time. Now that they are retirees and don't have children in school why would you expect them to pay for a service they themselves don't use and no longer need?
@@stanleydragon9548 Because they used the school system themselves, and because the school system is underfunded. To add, taxes are not meant to be for 'services you need', but for 'services the community needs'. This individualistic 'I got mine' mindset is what's destroying wealthy nations right now.
@@c50m4 The key word there is "used", as in past tense. If they are not using it why pay for it. It's not a "I got mine" mindset, it's a I want something of value to me for the hard earned money I'm spending mindset. As for the schools being under funded, that's the fault of local and State governments, not senior citizen tax payers.
@@stanleydragon9548Are they living in an are that could benefit from having citizens who are educated? It doesn't take more than a few seconds to think of many indirect benefits that senior taxpayers (and all taxpayers) get from funding schools.
I wish more interviews were like this. It's jarring watching old interviews where the interviewer would just let the person speak, sometimes for several minutes, before saying anything.
I'm in the US and am much higher in understanding how our Congress works than the average American (which, sadly is nothing to brag about, being that the average is so pitifully low) ; but I would assume that direct lobbying to the House of Commons is not as easy as it is here in the US. (Lobbiests here in the US are a big part of the legislation process.)
@@keldonmcfarland2969 That's even an edited comment and you're still fucking retarded. Somehow your arrogance is greater than your ignorance, that is why this country is fucked, because of people like you.
Change is something that happens on an individual scale. One person can't evoke change by themselves unless they go to their neighbors. Politicians dont care unless there's a bunch of people breathing down their necks or you have money.
I can't comment on the taxation rules where you live but in the UK we have tax bands. Which is a far superior system to the one he proposes here. It would be very bad news for people who spend their whole career in low income jobs. In the current system that group don't pay much income tax in the UK anyway. If your annual income is no longer the factor that dictates your tax bracket, but you instead have a lifetime earnings bracket, it's going to be tough for older low income workers when they hit the magic number and suddenly have to pay it all back at a presumably high rate. If the government want to help ALL lower income people (not just the young) they can simply move the tax brackets. They can raise the lower thresholds and they can make the highest earners pay much more.
I had never heard of Rory before this podcast. What an extremely entertaining and though-provoking guest! I will be buying his book. More guests like this.
It's almost as if the system is meant to stop the poor and middle class from getting rich while helping the rich get richer. And one may think taxes are supposed to be raised to help mostly those who are poor.
I mean, that is why you have such things as tax brackets, but yeah I agree the current systems don't really seem to benefit the poorest in society. Then again, a lot of taxes is also spent on infrastructure (heavily dependant on your nation of residence, obviously).
Bingo, it makes it harder to accumulate wealth when young and is not a good incentive for working hard in early life What's even worse is Taxing poor people and disenfranchised people with a savings account. Say the interst is 3%,(33% tax on interest). someone with 3 million dollars can probably live on 60k if they live without luxury. So remove Taxation for saving money for people under a certain income level
A lot of comments are saying that rent would go up because of landlord greed. Landlords could only get that extra rent for one year though. So they can't keep charging that rate, and if you're young you're more likely to stay that extra year at home. It seems like an easily avoidable issue to me.
Alot of people seem to forget the vast majority of landlords are small time property owners like people that buy a house and when their kids move out do something like buy a boat or RV and rent the house out. Can't accuse people that are simply trying to reduce their costs or make a little money off their property of greed.
Alot of people seem to forget the vast majority of landlords are small time property owners like people that buy a house and when their kids move out do something like buy a boat or RV and rent the house out. Can't accuse people that are simply trying to reduce their costs or make a little money off their property of greed.
@@armymatt83 There HAVE to be regulations to limit greed vs someones basic housing needs though. Like if inflation is 2 percent you cant raise someones rent with 10. Like where is that person gonna get the extra money every year?
I always wondered why seniors got discounts when it is the young parents who really need the discounts. I am now a senior and pass the savings on to my kids/grandkids when I use my senior discount(s) to purchase things for them.
I love this idea but no shot of it getting any traction in the US. I think a reasonable start would be making student loan payments 100% tax deductible though, since it encourages college grads to find jobs instead of waiting for the government to bail them out regardless of employment status
@@magicalfrijoles6766 Or just educate them on the benefits and risks and let them decide what to do with their life instead of herding them like sheep.
Frankly anyone who takes those government loans is too stupud to get a proper education so it SHOULD be used as a test before being admitted to college or university
This would trick young people into believing that money comes easy until one day they hit the limit and get slammed with all the heavy taxation they voted for because they thought money came easy. it would also discourage saving because of the mentality of "money comes easy and taxes will never affect me".
@@ElliotKeatonThere are always irresponsible people; the same is true right now. If society at large could stop venerating status and prioritize working class people instead of billionaires, then ideas like this could have a big impact.
I’m… not quite sure how to feel about that idea? It seems sensible but also quite weird, and I can’t think of any reason for anyone to be opposed to it other than it’s not really what we’re used to. If anyone knows some economics or just has a well-founded opinion on it this would be good or bad I’d really like to hear it cuz I’m kinda lost on how to feel about this
It seems it would just shift the tax burden on to those who have already made the $200,000 mark. But really I dont think it would really solve the issue he wants to solve, that being making it easier for young people to get on their feet. Sure, everyone under that mark now has extra money in their pocket. But that doesn’t change the real issue plaguing young people which are high housing prices (or just high prices period) and poor spending/saving habits. And now everyone else who has already hit that mark before that tax policy is issued gets screwed because not only did they not get the same tax advantage, but now also have to pay more in taxes so that the young can receive that benefit.
Yep. But we’re stuck in a system where the money is stuck with people who don’t need it. My parents don’t have a mortgage, but they’ve just inherited hundreds of thousands from my grandparents dying. It’s of no use to them whatsoever unless they want to buy a Rolls Royce, which they don’t. By the time my parents die in 20 years and it comes to me, I won’t have a mortgage, so it will be of no use to me. And so the cycle continues. There’s all this wealth being accumulated that is not being used. It’s just sitting in bank accounts and getting handed over to the next person.
This is brilliant. The tax free amount should also include paying off student loans so people can get ride of it quickly. Allows people to get a house and get some money in savings so there are not constantly scrambling to stay afloat. Also between the ages and 15-18 be taught how to manage money so you can fully take advantage of this tax break.
The trouble is, if people did that then they would be able to retire early and not be forced into working until 80 just to keep a roof over your head. And the government really wouldn't like that.
@@MrEdrftgyuji I think you are being extremely optimistic here lol. The large majority of young people wouldn't save any of the money so any impact it has would be negligible. At most it might help uni students study while working less hours on the side.
Problem with that is that taxation isn’t the only (or even the primary) barrier to people building wealth. If I make 40k a year and my living expenses are 30k, in five years I start being taxed but I haven’t accumulated much wealth by then at all
@@forwardmoving8252 no. I’m saying the way it is now (where the first however-much you make in a year is tax free) every year is a better system than the one he’s proposing replacing it with
It looks good on the surface. The biggest issue I see with this is that young earners are much more likely to spend their money more frivolous. Especially in the U.S., wages stagnate so heavily that most people would see their wages go down effectively, which would just exacerbate a bunch of the financial burdens in the U.S.. I am not familiar enough with other countries' exenomic situations to say that there isn't a country where such an idea wouldn't help the younger generations amass wealth. I am strictly talking about the U.S., and as far as that's concerned, wealth is already too fragile. The second issue I see with this is that it backloads the tax system, so a drastic increase in population would burden the taxes of a country even further because that generation won't be paying into taxes until much further down the line.
When it comes to spending frivolously, I don’t see that that is an issue here since they’d still be paying sales tax which would in turn increase the tax revenue and GDP. If we look at the housing issues across many countries right now, something like this could ease that issue by increasing the number of first time buyers. I also don’t think they are as frivolous as they were in the past with cost climbing globally. The cost of a phone has gone up 1000% in the last 30 years so spending has become far more limited to whatever is possible for young people now. If we look around supermarkets and compare costs to back then there are many items that cost more than 100% more than they did back then too. The cost of living all over the world has climbed so much more than any inflation rates. It’s just not sustainable for these things to keep on climbing if we wish for younger people to get anywhere in life. In the UK the average house price 40 years ago was 3x the average salary. Today it is 12x the average salary, and in cities like Oxford and Brighton it is above 20x the average. People are being forced to pay more to rent homes than it would cost to pay a mortgage for one, but they cannot get a mortgage without having a 10% deposit for, something they cannot save for because they’re paying an extortionate amount in rental fees. There are similar issues spreading throughout Europe with the exception of the Baltic states whose populations are decreasing year on year. For countries like that, having such a tax break for younger people until they’ve earned enough might actually see the populations climb back above the 2 million mark for each once again, though with the worries about a Russian invasion right now there are many wishing to be further away from the border. With regard to the US, the amount of debt a person comes out of university with, especially if they become a medical professional is truly insane. Whilst this kind of tax break at the start of their career may help in many ways, when the student debt comes to over half a million to become a surgeon. This kind of tax break could give such people a much better starting point once they have completed their doctorates. An adage of older people is that youth is wasted on the young, but when the young these days have the kind of financial worries that just weren’t anywhere near as much of an issue 30-40 years ago, so many are working huge amounts only to come out owning nothing. When I was young, it was the dream of many to own a nice home and have a family. Now, young people are having to ask if there will ever be a time when they can afford to even get on the housing market since the deposit is more than they’re able to save, meaning only those who remain living with family or those who inherit wealth or a family home have that kind of hope for a future and their chances of retirement before they’re dead are becoming more and more slim. People used to have that goal to live for, but now we’re asking kids to work their entire lives and to end up owning nothing but the clothes they are in.
People spending money in the economy is almost always a good thing. Even nonproductive things. Keeps more people employed, means there is more demand and supply. Higher consumption = more GDP, generally. A big reason the stimules checks were offered to americans during Covid was to keep the economy running by having people spend money, for example. An increase in population seems incredibly unlikely with currents trends. Generally as seen with most western countries and wealthy countries in general; people are having less kids not more. And even then things like birthrates are registrated by the government by law so its pretty easy to see big changes in population and change accordingly.
@benross9174 Yes, but trends change. Just because birthrate is declining now, that doesn't mean there isn't potential for there to be a massive spike decades from now, and at the pace of legislative tax reform, that could very well happen soon after the tax changes are implemented, especially with young workers effectively getting the most immediate benefit. This will incentivise things like early parenthood and so on, as the financial burden is somewhat alleviated, until much later, when out of nowhere, taxes are due, and the parents' wages suddenly plummet. This is almost a trap of sorts. It's often very hard for younger workers to rationalize what that financial shift might look like, so many families will end up with a sudden financial burden that, rather than one they've grown accustomed to over time and adjusted for.
"A drastic increase in population" would also result in a large surge in tax revenue from those who become of age. Your comment isn't very well thought out
Being old shouldn't be enough to qualify for government assistance. If you've made tens of millions of dollars I don't think you need the same subsised access to support or whatever. When my grandparents were old they had to spend almost all of their savings to live comfortably, meanwhile there's other old people who own multiple properties, live off their pensions and get to benefit from all the same services as any other old person. I know it feels unfair, they're old and they worked hard for what they have, but the vast majority of us will also end up in that boat and it seems like by the time that we're in their situation there won't be any money left for us to have a comfortable and easy end to our lives. I don't want to take any benefits away from elderly people who need them. If changes to these laws and systems results in retirees having to return to work then it's gone too far, but I think there's a lot of people that age who could comfortably provide for themselves who don't need to get so much help. I recently turned 30 and most people my age can't get access to proper healthcare now let alone 40 years from now when they're reaching a point where they can't work like the used to. Taking moneyn(taxing) the elderly is never a popular idea politically, but the younger generations are broke and have been hanging by a thread for decades. It sounds almost like "trickle down" economics in reverse, but I think it's actually logical to assume that if younger people are able to properly make and save money, they're probably likely to take some responsibility for caring for their parents and paying for housing when they retire. I for one would much prefer to pay for my parents retirement than I would want to have to ask them for help. Unfortunately I don't have a lot of faith that the government (either of the parties) to implement those taxes fairly since they'd essentially be targeting politicians. Politics on both sides is already mostly made up by rich old people who could probably already afford to retire. It's hard to imagine them agreeing to tax themselves and instead they'd probably find a way to screw people who actually rely on their aged pension to survive. Really we need more help for the elderly poor than there is, but I think people tend to view old people as one contiguous people when it's really quite unfair to expect rich people to reap the same benefits as poor people simply because they're old. Our economy hugely favours old people already, if you're old and rich you already won.
That wouldn’t be fair. Rich people shouldn’t pay the government for the wealth created by their poorly paid labourers. That money should go to the workers.
@Alkalion69 They pay less as a percent than the average blue-collar worker. Sometimes, even outright dodging taxes altogether. This myth that they pay more is some pretty obvious bs.
The first, but not only criticism of this idea that comes to mind is that it presumes people are financially responsible enough to save that tax free money in their early years. The belief here is that people will accumulate wealth in their 20’s and therefore be owning homes and financially secure by the time they start families. If you’re not saving money on a tax rate of 0% for the first £12,500 then 20% on additional income, you’re not going to save it being given the first decade of your working life tax free.
I agree this is an issue. Remember what you spent your first paycheck on? Probably not investing or saving for a house. Maybe put the equivalent tax amount straight into Superannuation (like 401k?) so it can start growing early, and allow it to be used towards buying a house if/when that time comes.
and why does this happen? Because NONE of this is taught to us in school in our younger years. Why isn't financial literacy a core subject in high school?
I think the first $200k being tax free followed by our current system would be better. Keep in mind that the first $200k being tax free would be pretty useless for someone making minimum wage. The standard deduction in the US basically ensures that people not making much money pay 0 taxes. The first 200k never would have gotten taxed in the first place. The more I think about this system the less I feel like it would work out.
Or here’s thought, big Gov can fund itself(assuming your gov doesn’t run a giant fiat currency Ponzi scheme) by leveraging import/export tariffs and fees. Which is already produced off the backs of its own citizens and considering government produces NOTHING itself. If this is inadequate for the scope of gov, THEN REDUCE ITS SIZE and return the responsibly to citizen.
Also, taxes are here to give you social security later,e.g. when being pregnant, maternity money, schooling children etc. As well as free medicine etc. But pensions get taxed as well. Pensioners certainly aren't going to get pregnant.
That’s the idea to keep you working till your are nearly dead then get jack shit to show for all your hard work why do you think everyone except braindead idiots and rich people hate governments
The biggest issue with the tax system is that it is lower for the use of resources than the use of your time (labour). The wealth gap will always increase and keep increasing when people starting out cannot catch up. When you can make more money from your money than you can from yourself then you will divide society, and that's not good for anyone.
Having a tax free period early really disadvantages those that are ipl during that period or who haven't learnt about money by then. Having a tax free pension element is intended to get people to care about saving for pension as it is really hard to get people to care about long term finances, it is to lessen the burden on tax payers and lessen the chance that people who can no longer work have savings for themselves, it also means that the government gets an advance on taxation as they need to earn more before people start paying less tax in pension, they can invest tax prematurely to assist people when they stop working rather than take it at the time.
It makes total sense on paper. Not sure how practical it would be. Say people get their tax break and then stop working or move to a different country. Maybe there would be a workable solution. I have the same issue with inheritance. If inheritance was always taxed at 100% above a fixed threshold, society would be much better off. Concentration of wealth would be limited to one lifetime effectively solving the biggest inequality issues. Kids of rich people would still have plenty of advantages in termes of experience, education and connexions. They don't need to also have an unearned mass of capital. But now people wouldn't accumulate wealth for ever, they would actually use it before their deaths. However, I don't see a practical way to make it work. How do you manage donations before death, and people moving their assets to a different country?
The moving away thing can be solved by doing something we should really be doing anyway, and is the one thing the US gets right which is to tax citizens living abroad, but give them a credit against what they pay where they are living. Meaning that if someone moves to a country with the same or higher tax than the UK they'd pay nothing to the UK, but if they move to a country with a lower tax rate or tax haven with no tax then they would pay the difference to the UK. Often this is countered with "why should I pay tax to a country I don't live in", but: a) most people living abroad wouldn't pay anything to the UK anyway. b) as a citizen you've still almost certainly used UK services, you may have had an education, you may later rely on the NHS when you're old. All of those things you use most when you're not working or paying tax, so you pay off those debts during your working years, wherever you happen to live. Expats also benefit from the foreign office, who provide consular services, and they also have the insurance policy that if shit hits the fan in the country they live in the UK will get them out. c) if you really want out you can renounce your citizenship, but UK tax should be the cost of holding UK citizenship. We make a point about not having taxation without representation, but citizens living abroad can still vote, so why should they have representation without taxation.
@@zaphod4245 really intelligent comment this I think. Probably a way through bilateral arrangements to set it up so that it works something close to PAYE with various common expat countries with good national bureaucracies too - in the sense that you, as a brit, wouldn't need to file a complex tax return with the UK like Americans do every year, if you're in regular salaried work you could just register yourself with the relevant service & HMRC then gets given the info they need; what you make & what you paid in tax that year etc., and then bill you for whatever you owe if there's a difference wrt what your equivalent UK tax burden would be. Obviously you wouldn't have that for every country/situation, but it would probably be east to set up for e.g. a salaried worker in most EU countries at least (because that's one thing the Americans do get wrong haha. The more frictionless it is for your citizens to pay tax, the better it is for you and the less they will resent the number 😂 Sometimes I wonder just how much of American anti-tax popular sentiment is not actually because of any fundamental cultural or political difference, but just because Americans have to file a complex tax return every year, and have to do mental Arithmetic every time they go to the fucking supermarket if they want to know how much things actually cost lol)
The problem is that employers would simply pay less to young people. Even if they didn’t, plenty of people wouldn’t save money, would make a bad financial decision, or would get unlucky and would end up permanently screwed. What young people actually need is negotiating power with their employers. Unions, labor laws, whatever, as long as it actually raises their wages above the cost of living.
Artificially raising wages above the cost of living won't help anyone. You'll get young people with no jobs, instead of young people with poorly paying jobs, and that's _far_ worse.
@@robertmartin6800 Raising minimum wage/unionization/worker protection laws doesn’t reduce employment rates, and even if it did, the government should just implement jobs programs too.
@@haph2087 They very much do reduce labor force participation. In market based economies prices regulate consumption, when the price of a commodity is increased but its value remains constant, its consumption declines, when the price of a commodity falls but its value remains constant, consumption increases. Why do you imagine that the same principle does not apply to labor? The state paying people to pretend to work is not a viable solution to low labor force participation. Putting people out of work, then taxing the few who are left working into the ground so that you can subsidize the idle consumption of their newly unemployed peers is _insane._ When has that ever worked?
@@robertmartin6800 That’s only true for elastic demand. Labor, being necessary for almost every corporations methods of value generation, isn’t actually very elastic. When the choice is between paying more of the profit to the employees, or making no profit, the former is always the correct choice. Again, even if this wasn’t the case (but it is), that doesn’t mean that we shouldn’t promote workers rights, because the government can create/promote employment opportunities in forms *other* than wage slavery.
@@haph2087 There's no such thing as inelastic demand, demand always fluctuates, _especially_ for things like labor. That's not the choice that people who purchase labor are given to make when the costs of labor are artificially increased. If they _can_ stay solvent, then their incentives will be to minimize their losses, and most often that will entail cutting labor input costs. Jesus Christ, it's like I'm debating Lenin. "All citizens are transformed into hired employees of the state . . . ". Everyone knows that old Soviet laborer's joke, "they pretend to pay us, we pretend to work," taking labor from productive, economically viable private industries and putting into unsustainable, unproductive, public enterprises _will not_ solve any of our problems, it most certainly won't liberate us from want. "Wage slavery", please, as if you people actually thought slavery was wrong.
Ok, but here’s the thing: what if people work the 5-10-20 years till they have earned their 500k tax free and then bail to another country? The government have spend money on their education, maintaining whatever the government maintains and what else the tax goes to, but they never see a penny from those people who enjoyed parts of that. And those who don’t bail are made to pick up the slack, work in worsening conditions as the government has to save money to make up for the lose the people who left caused, so not only will they earn less then their system abusing counterparts, they also have to carry a heavier burden than otherwise
Firstly, the example was 200k tax free, not 500k. And I'm sure it would be adjusted by country / by region depending on the relative cost of things like housing. Secondly, I can't see how that would be more likely to happen under this hypothetical policy than it is currently. You could graduate from university and move abroad immediately and the state would never get back what it invested in your education and other public services (this is actually one of the big problems with Western universities training so many foreign students, as a % of them immediately return to leverage their new skills back in their home countries). On the contrary, you could argue fewer people would leave the country. The point of the policy would be to enable young people to afford to buy property and start families at a younger age, and most people do this in their own countries, not abroad.
Thats more likely to happen now anyway. People are crippled with lifelong education debts, which they could evade by jumping the country and starting over financially, instead of continuing from a negative position with a broken tax system designed to keep the working class down.
Problem is this isn’t taking into account that the government and powerful people dont want you to be wealthy. They need their peasant like working class
There will always be peasant like working class, as there will always be people shit with money. Who will happily blow it on stuff they don't need. Thus the wheel keeps turning
Completely agree. I’m 39. I have a four year old and a house with 65k left on the mortgage. My pension is worth 60k. Why can’t I take that, pay off my mortgage with 1 year of hard saving then being mortgage free, take risks on other investments and hammer my pension with 10x what I am now I’m paying a mortgage.
He's got a point. I feel poorer now in my mid thirties with three young kids and a new mortgage, than ever before, yet i know the long term outlook is great once I've paid a few years off and have no childcare fees. The costs of life are so jagged, being able to smooth them out over the years would have huge benefit.
This would be incredible. My wife and I were lucky to have my parents that helped us buy our first rental. Starting in rentals at 24yrs old allowed us to build to 40 units by 37yrs old. Not only does the money early help but also we were physically able to work 140+hr weeks while raising 4 kids.
Yes!!! I completely agree! I total stored wealth should be taxed and very little amounts. It equates to far more income for the state and far less damage on GDP and the drive to work.
My first job paid so low as a "trainee programmer" that I was working at a loss after mortgage and travel expenses and they were taking out compulsory pension contributions.
As a Canadian. I like what hes saying, but sadly, i doubt that will ever happen with our current politicians. they ALL seem like they are against us at this point in time.
Except now as a pensioner, I could not survive with the deprivation I lived with when I was a young man. Think of it this way, as a young man a cheap push lawnmower was fine. In fact for extra cash I could do other people's lawns. By midlife and a bigger garden, I needed a somewhat more expensive self-propelled lawnmower. Now as a pensioner I either need to get rid of the garden, pay someone else to do it or get an expensive robot to do it. A further issue is how would I pay someone else to do it if they are eking out their tax holiday and not needing to work for extra cash.
My background Politics, Philosophy, and Economics. This concept has REAL strength to it and should be looked at further. This would turn a shrinking middle class households into economic powerhouses a decade or so into the programs with the right implementation strategies and citizen guidance could be invaluable. Not everyone has the earning potential to make it big… giving the little folks a better life foundation can go a hell of a long way.
There was a time, when there was no income tax, in the US. The 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913, changed all that.
Old folks should be helping their youngins more. Simple as. Take care of them young and they'll be able to afford to help their own later down the road.
When we started and lived in her mum's house we paid room and dinner at 50each which was less than half if we rented a room anywhere or 2/3 on a house share... So for two years we tucked the difference. After, we had a deposit for our own place and had been promoted so combined income was over 30%. This was easily saved and invested. The party people we hung around with posing yet with no money in the clubs, buying magnums... The ones who used to laugh at our generic smokes, Fiat 500 with zero assist, at us drinking cask ale a quid a pint while they're on foreign beer at twice the price... We all came from the same background. They're in a tighter bind in midlife... We worked, saved, invested and reaped. Now the kids are spoiled and the people who can't imagine (or have the imagination) how we done it, cry to income tax us more😂😂😂
Andy Serkis is spittin some truths here
He ain’t spitting out any food.
Very precious points
How about the majority of people, who will just spend that extra money in the first years on iphones and after that complain that everything got more expensive?
@@Bellephrontos Yeah they would probably buy eleven iPhones each. Thats what young people do….because they are stupid.
@@Bellephrontos Then they'll only have themselves to blame.
I’ve never heard anyone suggest this, but it’s genius. Getting started really is the hardest part.
There would need to be a way of dis-incentivising immigration after the initial tax break
@@lukeboy61do you mean emigration? Quite simple, if you, your parents and your grandparents weren’t born in the British Isles then the tax break doesn’t apply to you.
@@BushmanOutdoors yes, I mean there would be an incentive to leave the country with the accumulated wealth after you've taken advantage of the tax break. But yeah I get the two mixed up sometimes. I'll leave it there so these messages make sense
@@lukeboy61Not really. Most countries have income tax. Moving won’t necessarily gain you an advantage.
@@BushmanOutdoorsyou do realise it would be ethnic Brits who would abuse this right? Look at the housing market they would just work for 5 years and leave for cheaper rent and lower tax. That's the worst solution ever
To do some numbers on this:
The average income for 22-29 year olds in the UK is £30k. At that income level, someone will pay about £3.5k in tax a year and take home £26.5k. So in this proposed system they would take home £290 more a month and use up their allowance over the course of 8 years.
Just thought some people might find that interesting.
There are also the taxes your employee pays for you, and the percentage grows a lot if you are a freelance… at least in italy
Did you factor NI payments into that? Because I assume that even if this system was brought in and you paid no income tax for a while you'd still make NI payments.
@tomfurey9062 this doesn't factor in NI. Does NI not get deduced based on your gros income rather than your net income? So the maths would still work out to be the same difference under the proposed new system.
@@vel0_rouge good point, although I did realise when reading your response that you could make that 8 years last longer if you have a Net Pay tax relief pension as your pension money is payed before you are taxed so your taxable income is your salary minus your pension contributions.
I know this is all a theory but a lot of people have to pay plan 2 student loan. How do you think that would be taken into consideration?
To quote Alex: "hmmmmmmmmm"
Honestly same tho
"Hmmmmm" with gerontophilia on screen is absolutely wild 😂
"hmmmm" with gt.philia on screen is absolutely wild😂
Alex “I’m killing it right now sshhhh….”
He’s actually listening and thinking through the idea rather than immediately interjecting his own thoughts/ideas, that’s so rare and great
With that mustache Alex is looking like a British soldier from WWI.
They fought Jabba the Hutt in wwi?
Also. Is there a midget working his tail? Small person*.
@@kkupsky6321😂
Captain Darling
😂 Respect he fought for your freedoms
Thankyou lmao 😂
When he said I’m 58 , I realized no amount of money is worth trading a life of doing what you love and being healthy.
When income tax was created here in New Zealand no one who earned less then $100k of today's money had to pay any tax. Then they changed it and took it from people earning $20k today per year
I love crack
As a 52 year old, I think that's an awesome idea. Makes complete sense.
Most people would still not build capital..they'll just spend the extra money in their pocket and still be in the same position by the time they have to pay tax
Only works if you invest it. Most people learn to spend what's in their pockets, the trick with money is to learn how to make it work for you. That's what wealthy people understand
@J_h-3ik be nice to have the chance though. I know I wouldn't waste it.
@@J_h-3ik And that’s perfectly okay. They would be pumping money into the economy. Doesn’t matter what you do with your money as long as it gets spent eventually in some way. You come to this earth with nothing and you’ll leave with nothing so you might as well spend every penny.
The big problem is that most people don't reach 200k so they will never pay taxes. lol
I’m 60 and I think this is brilliant. Such tax breaks would have made it so much easier to buy our house and bring up children. With fewer and fewer people having children, this would help tremendously.
Um, so what?
Why should the government be social engineering things like home ownership and procreation?? People live their lives, let them. Get power-hungry psychopathic people away from our wallets, our families, our bedrooms, our… everything, to the extent possible. They do NOT care about you at a fundamental level.
But now that introduces other problems, like now that more people can afford houses, prices for those houses go up. Its not like more builders magically exist to fill even the current demand, so theyd go up until those same people that managed to save that money to buy a house, could no longer afford the thing they were saving for in the first place.
@@guyfromdubai the reason people can’t afford housing isn’t because people are just willing to pay more, it’s the banks and businesses who are willing to buy above market value which inflates the market and artificially reduces supply.
Building more houses isn’t going to solve the issue, it’s just going to feed it as the homes being built are paid for by investors or bought up by investors at above market prices.
The only way this gets resolved is through new zoning legislation which restricts the types of ownership in certain areas, preventing the rich from using homes as investment portfolios.
@@guyfromdubaiWhere I live which is Arizona, there is several neighborhoods of just empty houses all own by the same company, prices doesn't go any lower even years after they are built. I used to work as a door to door salesman and every now and then I come back to the neighborhoods, the houses are still empty and up for sales.
_"Such tax breaks would have made it so much easier to buy our house and bring up children. "_
Except this statement demonstrates exactly why his idea is rubbish. He posited that this exemption was a way to _accumulate wealth,_ and the first thing you mention is upon what and upon whom you would have spent it.
This whole episode was a goldmine, absolutely loved this gentleman and his ideas
Every bit of financial advice I've ever been exposed to since being a teenager has basically boiled down to "as early as you can, always set aside a chunk of whatever you earn towards retirement so that you can finally rest easy once you're old as hell and broken". Sounds great, in the meantime I could barely keep the lights on or get gasoline and food at certain times in my life, and forget about buying a house or saving money that can only be spent once my spirit is sapped.
do not buy stuff for girls or women, they just give it away to secondhand shops one year later.
@@commonconservative7551 or... he got paid barely above minimum wage for years because of corporate greed...
@@commonconservative7551 I've done none of those. Good job making an ass of yourself.
@@commonconservative7551dude just stay off UA-cam lmfao. Honestly everywhere, just stay inside.
@commonconservative7551 Your take is from someone whos more well off than most people, or i could be wrong.
Dont try to accused someone for something with a huge lack of information about a person. Thats like trying to diagnose someone with cancer or a mental ailment without knowing the person and have the credentials to do so.
In Australia the tax breaks for senior citizens are obscene - and there is nothing that really helps young people - and I say this as someone about to retire.....
It is like that, as it is many countries, because seniors vote. Usually at a rate of 85+%. Young people (especially under 25) generally do not vote. It’s a numbers game, simply.
@lukek1949 except that reason doesnt work in Australia, because we a legally required to vote
its bs politicians who are old and dont care.
@@lukek1949 no it is previous generations being greedy and in positions of power.
Because young people don't vote. Oldies vote and are looking for short term gains in tax cuts so more likely to vote for the liberal party. Them giving anything to the young is useless as far as political point scoring is concerned..
@@lukek1949 Voting is compulsory in Australia, with few exceptions.
That would be a great improvement to add to the tax system.
He's absolutely right. Our societies need to start genuinely supporting our young hardworking generations instead of no limits at-all-costs ruthlessly and mercilessly exploiting our young hardworking generations 💔
The Chinese are the first to stand up to the treatment of youngsters with their Bai Lan lifestyle choice. It's not good they feel the need to do that, but too many systems are skewed against the youth
@serge2cool exactly! This is exactly what is going on! I have been thinking the exact same thing. You can see this same thing going on in several countries. We need to start acknowledging what is actually going on.
That's how the elites have made their billions, so why would they stop exploiting us now? It doesn't make financial sense to them
Older ppl will always be our down fall
Don't ask Canadians how we're doing in 2024. As 40.000 would not be enough for 1 person to survive living in moms basement. My rent alone costs 2300 without utilities. Groceries for 2 adults and 1 kid 1500. Don't get me started about the cost of electricity, or heating, or the cost of owning a car, since insurance alone is 250 a month. Cell phone with limited internet access and cheapest plan is around a 100. Tax free wages for a few years are useless, when you are in a societal financial prison hell.
I think we should introduce a system where we have to vote in polititians who have our interests at heart, we could call it a democracy.
Funniest comment on the internet... 😂
It would never work. They wouldn't let us vote for people devoted to public service
Shut up commie!
Wouldn’t that be a good idea!!x
Would never work they'd just vote among themselves the actual laws and all we do is vote in people we hope and pray do the right thing. Oh wait ....
One of the best things I've ever heard
....huh, you know, that's quite interesting.
I despising taxes, so this actually seems very reasonable
Not really.
I entered the workforce at 16.
(But worked on a farm for $$ since I was 11)
My income was significantly higher by my mid-20s, and I'm pretty sure his proposal would lead to a higher percentage of tax ON that income.
@@lordfraybinyeah but by having more available cash at the beginning of your life, you'll be more sorted then
@timmanning5206 the few hundred I saved in taxes each year, wouldn't have made any difference.
@@lordfraybin I would have saved thousands. I'm not saying it's the best idea but it merits more thought
I hated paying tax when I was 16 and 17, because the government was taking my money but wouldn’t give me a vote, so I didn’t get to have a say in what they did with the money I was forced into giving them. I’m in my 30’s now and I still feel it’s grossly unfair, a ridiculous inequality that should be remedied immediately.
What country do you live in?
The United Kingdom
Wait till you find out how much your boss is stealing from you.
@@Nun195elaborate….
Lol and you think you have influence now?
I’m watching this, a 30yr old sitting in an underfunded public school in a very wealthy area, frustrated that my state and county both give property tax waivers to anyone over 65, while I’m trying to set aside money for my property taxes. If the retirees in this area paid property taxes to fund this school we wouldn’t be underfunded.
Those people over 65 have paid taxes towards schools their entire working lives, and most probably had children attending school at one time. Now that they are retirees and don't have children in school why would you expect them to pay for a service they themselves don't use and no longer need?
@jedaniels94 What say you?
@@stanleydragon9548 Because they used the school system themselves, and because the school system is underfunded.
To add, taxes are not meant to be for 'services you need', but for 'services the community needs'. This individualistic 'I got mine' mindset is what's destroying wealthy nations right now.
@@c50m4 The key word there is "used", as in past tense. If they are not using it why pay for it. It's not a "I got mine" mindset, it's a I want something of value to me for the hard earned money I'm spending mindset. As for the schools being under funded, that's the fault of local and State governments, not senior citizen tax payers.
@@stanleydragon9548Are they living in an are that could benefit from having citizens who are educated? It doesn't take more than a few seconds to think of many indirect benefits that senior taxpayers (and all taxpayers) get from funding schools.
If I took a very deep breath, I could probably quote every word Alex said in this 1 hour and 48 minute interview.
Insanely accurate lol. He could have left a cutout for this guy to talk to
When you’ve got a guest as entertaining as this, sometimes the job of the interviewer is to allow them to elaborate. Alex did well in this regard imo
@@eoghan7406 very true, hahaha
That's the litmus test for a good interviewer tbf
I wish more interviews were like this. It's jarring watching old interviews where the interviewer would just let the person speak, sometimes for several minutes, before saying anything.
Telling it to the wrong people! Should be telling this to parliament and make them put stuff like this into action
I'm in the US and am much higher in understanding how our Congress works than the average American (which, sadly is nothing to brag about, being that the average is so pitifully low) ; but I would assume that direct lobbying to the House of Commons is not as easy as it is here in the US.
(Lobbiests here in the US are a big part of the legislation process.)
@@keldonmcfarland2969 That's even an edited comment and you're still fucking retarded. Somehow your arrogance is greater than your ignorance, that is why this country is fucked, because of people like you.
Haha, you think they actually care about you?
Like he said , the system is gerontophilic. Most politicians don't give a damn about young people
Change is something that happens on an individual scale. One person can't evoke change by themselves unless they go to their neighbors. Politicians dont care unless there's a bunch of people breathing down their necks or you have money.
This idea is just absolutely brilliant!
I can't comment on the taxation rules where you live but in the UK we have tax bands. Which is a far superior system to the one he proposes here.
It would be very bad news for people who spend their whole career in low income jobs. In the current system that group don't pay much income tax in the UK anyway.
If your annual income is no longer the factor that dictates your tax bracket, but you instead have a lifetime earnings bracket, it's going to be tough for older low income workers when they hit the magic number and suddenly have to pay it all back at a presumably high rate.
If the government want to help ALL lower income people (not just the young) they can simply move the tax brackets. They can raise the lower thresholds and they can make the highest earners pay much more.
I had never heard of Rory before this podcast. What an extremely entertaining and though-provoking guest! I will be buying his book. More guests like this.
He's got a good ted talk and even if you don't like the other stuff in the magazine his spectator column is always top tier
@@ewangent Yes, that TED talk on 'perceived value' changed my life. One of those rare speakers who can entertain and leave you feeling smarter
Sounds like someone who likes the sound of his own voice.
This was an extremely interesting and entertaining conversation 👌🏻👍🏻
💯
Great empathy and social care. That is wonderfully wise.
I suspect there would be immense unintended consequences.
It's almost as if the system is meant to stop the poor and middle class from getting rich while helping the rich get richer.
And one may think taxes are supposed to be raised to help mostly those who are poor.
I mean, that is why you have such things as tax brackets, but yeah I agree the current systems don't really seem to benefit the poorest in society. Then again, a lot of taxes is also spent on infrastructure (heavily dependant on your nation of residence, obviously).
Nope. The whole purpose of raising taxes is to allow the state to run the country
Bingo, it makes it harder to accumulate wealth when young and is not a good incentive for working hard in early life
What's even worse is Taxing poor people and disenfranchised people with a savings account.
Say the interst is 3%,(33% tax on interest). someone with 3 million dollars can probably live on 60k if they live without luxury.
So remove Taxation for saving money for people under a certain income level
At least in the US poor people don't pay income taxes, but you still have to pay into Medicare and social security.
Bang on that is what's happening.
Thay what us to poor .
A lot of comments are saying that rent would go up because of landlord greed. Landlords could only get that extra rent for one year though. So they can't keep charging that rate, and if you're young you're more likely to stay that extra year at home. It seems like an easily avoidable issue to me.
In my country there is maximum percentage a year rent is allowed to go up. It should stay close to the inflation percentage.
Alot of people seem to forget the vast majority of landlords are small time property owners like people that buy a house and when their kids move out do something like buy a boat or RV and rent the house out. Can't accuse people that are simply trying to reduce their costs or make a little money off their property of greed.
Alot of people seem to forget the vast majority of landlords are small time property owners like people that buy a house and when their kids move out do something like buy a boat or RV and rent the house out. Can't accuse people that are simply trying to reduce their costs or make a little money off their property of greed.
@@armymatt83
There HAVE to be regulations to limit greed vs someones basic housing needs
though. Like if inflation is 2 percent you cant raise someones rent with 10. Like where is that person gonna get the extra money every year?
@@alphatrion100 no there doesn't, someone raises your rent that much then move
I always wondered why seniors got discounts when it is the young parents who really need the discounts. I am now a senior and pass the savings on to my kids/grandkids when I use my senior discount(s) to purchase things for them.
I love this idea but no shot of it getting any traction in the US. I think a reasonable start would be making student loan payments 100% tax deductible though, since it encourages college grads to find jobs instead of waiting for the government to bail them out regardless of employment status
I'm encouraging my kids to not go to college unless they can get it paid for through scholarship or GI bill. The ROI is trash on a lot of degrees.
@@magicalfrijoles6766 Or just educate them on the benefits and risks and let them decide what to do with their life instead of herding them like sheep.
Frankly anyone who takes those government loans is too stupud to get a proper education so it SHOULD be used as a test before being admitted to college or university
And by the government bailing them out, you mean the tax paying citizens. The government doesn't do s hit.
@@LlamaBearMan what on earth about their response felt like they was herding their kids like sheep?!
Unnecessary
That is a very good idea to have a 200K minimum before you have to pay tax
I’ve said this for years. Simple to administer, fair, motivating an a head start when you need it.
Word. Government should doing all it can to encourage saving as young as possible.
They won’t ever do that beecause then they’ll lose out and Would rather screw everyone else over for profit
This would be doing the opposite...
This would trick young people into believing that money comes easy until one day they hit the limit and get slammed with all the heavy taxation they voted for because they thought money came easy.
it would also discourage saving because of the mentality of "money comes easy and taxes will never affect me".
@@ElliotKeatonThere are always irresponsible people; the same is true right now.
If society at large could stop venerating status and prioritize working class people instead of billionaires, then ideas like this could have a big impact.
I’m… not quite sure how to feel about that idea? It seems sensible but also quite weird, and I can’t think of any reason for anyone to be opposed to it other than it’s not really what we’re used to. If anyone knows some economics or just has a well-founded opinion on it this would be good or bad I’d really like to hear it cuz I’m kinda lost on how to feel about this
It *is* kinda mind bending and seems incredibly sensible... would even incentivize the system the start paying higher wages all around
It could turn out like people who win the lottery though. They get a lot of money to fund a lavish lifestyle but after they can't afford to keep it up
@@blubblewubblenot really tho, I don't see the connection
It seems it would just shift the tax burden on to those who have already made the $200,000 mark. But really I dont think it would really solve the issue he wants to solve, that being making it easier for young people to get on their feet.
Sure, everyone under that mark now has extra money in their pocket. But that doesn’t change the real issue plaguing young people which are high housing prices (or just high prices period) and poor spending/saving habits.
And now everyone else who has already hit that mark before that tax policy is issued gets screwed because not only did they not get the same tax advantage, but now also have to pay more in taxes so that the young can receive that benefit.
@@snuffmeister6720 idk just a thought. Some people would definitely rent a place they can't afford after though probably
Rory is great , always comes out with little gems of wisdom .
Always? He only a piered a phew weeks ago!!
This is such an amazing idea to help those now who are struggling early which is 99% of people
Yep. But we’re stuck in a system where the money is stuck with people who don’t need it. My parents don’t have a mortgage, but they’ve just inherited hundreds of thousands from my grandparents dying. It’s of no use to them whatsoever unless they want to buy a Rolls Royce, which they don’t. By the time my parents die in 20 years and it comes to me, I won’t have a mortgage, so it will be of no use to me. And so the cycle continues. There’s all this wealth being accumulated that is not being used. It’s just sitting in bank accounts and getting handed over to the next person.
Well stop letting it sit in a bank account! Inflation outpaces your interest rate. Ridiculous really.
@@garethhutchison5830 yeah but that’s what people do with it! I know it’s wrong!
And that's why they will never do this
Don’t be absolutely ridiculous. That makes far too much sense.
Brilliant start for young people ❤
First time I've heard this bloke. What a lad
mY SENSES SAY HE'S A PLANT. nOT GROWING on me either!!
This is brilliant. The tax free amount should also include paying off student loans so people can get ride of it quickly. Allows people to get a house and get some money in savings so there are not constantly scrambling to stay afloat. Also between the ages and 15-18 be taught how to manage money so you can fully take advantage of this tax break.
The trouble is, if people did that then they would be able to retire early and not be forced into working until 80 just to keep a roof over your head. And the government really wouldn't like that.
Yes so important to live within your means and not be influenced by others.
@@MrEdrftgyuji I think you are being extremely optimistic here lol. The large majority of young people wouldn't save any of the money so any impact it has would be negligible. At most it might help uni students study while working less hours on the side.
Nah, student loans are a choice. Have to live with your mistakes
Is managing money something that really needs 3 years of teaching, it’s pretty simple really, don’t spend more than you make
Reality right there!!! respect 👍👍
Problem with that is that taxation isn’t the only (or even the primary) barrier to people building wealth. If I make 40k a year and my living expenses are 30k, in five years I start being taxed but I haven’t accumulated much wealth by then at all
50k savings are much
A disposable income of 25%? That's a luxury most people would dream of.
Your argument is basically "I don't want help because it wouldn't be enough help anyways so I'd rather get nothing" 😂😂
@@forwardmoving8252 no. I’m saying the way it is now (where the first however-much you make in a year is tax free) every year is a better system than the one he’s proposing replacing it with
You missed the point. This was primarily for high earners, like 100k a year. With 40k it would take you 5 years, and you wouldn't benefit as much.
It looks good on the surface. The biggest issue I see with this is that young earners are much more likely to spend their money more frivolous. Especially in the U.S., wages stagnate so heavily that most people would see their wages go down effectively, which would just exacerbate a bunch of the financial burdens in the U.S.. I am not familiar enough with other countries' exenomic situations to say that there isn't a country where such an idea wouldn't help the younger generations amass wealth. I am strictly talking about the U.S., and as far as that's concerned, wealth is already too fragile.
The second issue I see with this is that it backloads the tax system, so a drastic increase in population would burden the taxes of a country even further because that generation won't be paying into taxes until much further down the line.
When it comes to spending frivolously, I don’t see that that is an issue here since they’d still be paying sales tax which would in turn increase the tax revenue and GDP. If we look at the housing issues across many countries right now, something like this could ease that issue by increasing the number of first time buyers. I also don’t think they are as frivolous as they were in the past with cost climbing globally. The cost of a phone has gone up 1000% in the last 30 years so spending has become far more limited to whatever is possible for young people now. If we look around supermarkets and compare costs to back then there are many items that cost more than 100% more than they did back then too. The cost of living all over the world has climbed so much more than any inflation rates. It’s just not sustainable for these things to keep on climbing if we wish for younger people to get anywhere in life.
In the UK the average house price 40 years ago was 3x the average salary. Today it is 12x the average salary, and in cities like Oxford and Brighton it is above 20x the average. People are being forced to pay more to rent homes than it would cost to pay a mortgage for one, but they cannot get a mortgage without having a 10% deposit for, something they cannot save for because they’re paying an extortionate amount in rental fees.
There are similar issues spreading throughout Europe with the exception of the Baltic states whose populations are decreasing year on year. For countries like that, having such a tax break for younger people until they’ve earned enough might actually see the populations climb back above the 2 million mark for each once again, though with the worries about a Russian invasion right now there are many wishing to be further away from the border.
With regard to the US, the amount of debt a person comes out of university with, especially if they become a medical professional is truly insane. Whilst this kind of tax break at the start of their career may help in many ways, when the student debt comes to over half a million to become a surgeon. This kind of tax break could give such people a much better starting point once they have completed their doctorates.
An adage of older people is that youth is wasted on the young, but when the young these days have the kind of financial worries that just weren’t anywhere near as much of an issue 30-40 years ago, so many are working huge amounts only to come out owning nothing. When I was young, it was the dream of many to own a nice home and have a family. Now, young people are having to ask if there will ever be a time when they can afford to even get on the housing market since the deposit is more than they’re able to save, meaning only those who remain living with family or those who inherit wealth or a family home have that kind of hope for a future and their chances of retirement before they’re dead are becoming more and more slim. People used to have that goal to live for, but now we’re asking kids to work their entire lives and to end up owning nothing but the clothes they are in.
People spending money in the economy is almost always a good thing. Even nonproductive things. Keeps more people employed, means there is more demand and supply. Higher consumption = more GDP, generally. A big reason the stimules checks were offered to americans during Covid was to keep the economy running by having people spend money, for example.
An increase in population seems incredibly unlikely with currents trends. Generally as seen with most western countries and wealthy countries in general; people are having less kids not more. And even then things like birthrates are registrated by the government by law so its pretty easy to see big changes in population and change accordingly.
Simply not true, middle class spend more this is well documented
@benross9174 Yes, but trends change. Just because birthrate is declining now, that doesn't mean there isn't potential for there to be a massive spike decades from now, and at the pace of legislative tax reform, that could very well happen soon after the tax changes are implemented, especially with young workers effectively getting the most immediate benefit. This will incentivise things like early parenthood and so on, as the financial burden is somewhat alleviated, until much later, when out of nowhere, taxes are due, and the parents' wages suddenly plummet. This is almost a trap of sorts. It's often very hard for younger workers to rationalize what that financial shift might look like, so many families will end up with a sudden financial burden that, rather than one they've grown accustomed to over time and adjusted for.
"A drastic increase in population" would also result in a large surge in tax revenue from those who become of age. Your comment isn't very well thought out
Rory is becoming one of my favourite personalities
Problem is that the policy would have to stay the same for decades to have effect. Governments change and they change the policies and laws.
Policies never change that radically, which is also why this policy will probably never be a thing.
Raising kids, paying for costs of living and caring for elderly parents and not making more money decimated most American seniors.
Being old shouldn't be enough to qualify for government assistance. If you've made tens of millions of dollars I don't think you need the same subsised access to support or whatever.
When my grandparents were old they had to spend almost all of their savings to live comfortably, meanwhile there's other old people who own multiple properties, live off their pensions and get to benefit from all the same services as any other old person.
I know it feels unfair, they're old and they worked hard for what they have, but the vast majority of us will also end up in that boat and it seems like by the time that we're in their situation there won't be any money left for us to have a comfortable and easy end to our lives.
I don't want to take any benefits away from elderly people who need them. If changes to these laws and systems results in retirees having to return to work then it's gone too far, but I think there's a lot of people that age who could comfortably provide for themselves who don't need to get so much help.
I recently turned 30 and most people my age can't get access to proper healthcare now let alone 40 years from now when they're reaching a point where they can't work like the used to.
Taking moneyn(taxing) the elderly is never a popular idea politically, but the younger generations are broke and have been hanging by a thread for decades.
It sounds almost like "trickle down" economics in reverse, but I think it's actually logical to assume that if younger people are able to properly make and save money, they're probably likely to take some responsibility for caring for their parents and paying for housing when they retire.
I for one would much prefer to pay for my parents retirement than I would want to have to ask them for help.
Unfortunately I don't have a lot of faith that the government (either of the parties) to implement those taxes fairly since they'd essentially be targeting politicians. Politics on both sides is already mostly made up by rich old people who could probably already afford to retire.
It's hard to imagine them agreeing to tax themselves and instead they'd probably find a way to screw people who actually rely on their aged pension to survive.
Really we need more help for the elderly poor than there is, but I think people tend to view old people as one contiguous people when it's really quite unfair to expect rich people to reap the same benefits as poor people simply because they're old.
Our economy hugely favours old people already, if you're old and rich you already won.
PS I'm not American, these issues are pretty significant in most of the "western" world at the moment.
Thanx for saying this. Yes!
And rich people should be made to pay MORE.
That wouldn’t be fair. Rich people shouldn’t pay the government for the wealth created by their poorly paid labourers. That money should go to the workers.
@@JeffBetker Why not both?
@@JeffBetkerhere-here! Tax everyone less but insure the money goes to where it should be.
They pay the most. How about instead of trying to collect more taxes you get the government to actually spend your current taxes wisely?
@Alkalion69 They pay less as a percent than the average blue-collar worker. Sometimes, even outright dodging taxes altogether. This myth that they pay more is some pretty obvious bs.
The first, but not only criticism of this idea that comes to mind is that it presumes people are financially responsible enough to save that tax free money in their early years. The belief here is that people will accumulate wealth in their 20’s and therefore be owning homes and financially secure by the time they start families.
If you’re not saving money on a tax rate of 0% for the first £12,500 then 20% on additional income, you’re not going to save it being given the first decade of your working life tax free.
I agree this is an issue. Remember what you spent your first paycheck on? Probably not investing or saving for a house.
Maybe put the equivalent tax amount straight into Superannuation (like 401k?) so it can start growing early, and allow it to be used towards buying a house if/when that time comes.
and why does this happen? Because NONE of this is taught to us in school in our younger years. Why isn't financial literacy a core subject in high school?
I think the first $200k being tax free followed by our current system would be better.
Keep in mind that the first $200k being tax free would be pretty useless for someone making minimum wage. The standard deduction in the US basically ensures that people not making much money pay 0 taxes. The first 200k never would have gotten taxed in the first place.
The more I think about this system the less I feel like it would work out.
@@ChristopherCricketWallaceit use to be
Sounds so simple it's brilliant
Or here’s thought, big Gov can fund itself(assuming your gov doesn’t run a giant fiat currency Ponzi scheme) by leveraging import/export tariffs and fees. Which is already produced off the backs of its own citizens and considering government produces NOTHING itself. If this is inadequate for the scope of gov, THEN REDUCE ITS SIZE and return the responsibly to citizen.
It makes so much sense that it'll never be done.
it makes Zero sense... we already get 28000 tax free each year... its called Tax brackets...
this would be a game changer for so many
The same applies to social security. You're forced to pay into it for decades to get back a very small portion at the end of your life.
Social security should be an optional thing for irresponsible people.
Social security is _literally_ a ponzi scheme. It’s mind-blowing to me that anybody supports it.
Also, taxes are here to give you social security later,e.g. when being pregnant, maternity money, schooling children etc. As well as free medicine etc.
But pensions get taxed as well. Pensioners certainly aren't going to get pregnant.
That’s the idea to keep you working till your are nearly dead then get jack shit to show for all your hard work why do you think everyone except braindead idiots and rich people hate governments
@@adamsmith1813? No one is forced to claim social security. It’s insurance.
Here's a thought. How about not penalizing production at all. Rather than tax production and earnings, we could tax consumption and make it logical.
He speaks like my GP and I love it.
The biggest issue with the tax system is that it is lower for the use of resources than the use of your time (labour). The wealth gap will always increase and keep increasing when people starting out cannot catch up. When you can make more money from your money than you can from yourself then you will divide society, and that's not good for anyone.
Having a tax free period early really disadvantages those that are ipl during that period or who haven't learnt about money by then. Having a tax free pension element is intended to get people to care about saving for pension as it is really hard to get people to care about long term finances, it is to lessen the burden on tax payers and lessen the chance that people who can no longer work have savings for themselves, it also means that the government gets an advance on taxation as they need to earn more before people start paying less tax in pension, they can invest tax prematurely to assist people when they stop working rather than take it at the time.
Exactly, this tax system may have been good for _him_ but for the general population who may not be good with finances, it would be risky.
Yes, this is a good idea ! I've had very irregular incomes, and taxes have been killing me.
It makes total sense on paper. Not sure how practical it would be. Say people get their tax break and then stop working or move to a different country.
Maybe there would be a workable solution.
I have the same issue with inheritance. If inheritance was always taxed at 100% above a fixed threshold, society would be much better off. Concentration of wealth would be limited to one lifetime effectively solving the biggest inequality issues. Kids of rich people would still have plenty of advantages in termes of experience, education and connexions. They don't need to also have an unearned mass of capital.
But now people wouldn't accumulate wealth for ever, they would actually use it before their deaths.
However, I don't see a practical way to make it work. How do you manage donations before death, and people moving their assets to a different country?
The moving away thing can be solved by doing something we should really be doing anyway, and is the one thing the US gets right which is to tax citizens living abroad, but give them a credit against what they pay where they are living. Meaning that if someone moves to a country with the same or higher tax than the UK they'd pay nothing to the UK, but if they move to a country with a lower tax rate or tax haven with no tax then they would pay the difference to the UK.
Often this is countered with "why should I pay tax to a country I don't live in", but:
a) most people living abroad wouldn't pay anything to the UK anyway.
b) as a citizen you've still almost certainly used UK services, you may have had an education, you may later rely on the NHS when you're old. All of those things you use most when you're not working or paying tax, so you pay off those debts during your working years, wherever you happen to live. Expats also benefit from the foreign office, who provide consular services, and they also have the insurance policy that if shit hits the fan in the country they live in the UK will get them out.
c) if you really want out you can renounce your citizenship, but UK tax should be the cost of holding UK citizenship. We make a point about not having taxation without representation, but citizens living abroad can still vote, so why should they have representation without taxation.
@@zaphod4245 really intelligent comment this I think. Probably a way through bilateral arrangements to set it up so that it works something close to PAYE with various common expat countries with good national bureaucracies too - in the sense that you, as a brit, wouldn't need to file a complex tax return with the UK like Americans do every year, if you're in regular salaried work you could just register yourself with the relevant service & HMRC then gets given the info they need; what you make & what you paid in tax that year etc., and then bill you for whatever you owe if there's a difference wrt what your equivalent UK tax burden would be. Obviously you wouldn't have that for every country/situation, but it would probably be east to set up for e.g. a salaried worker in most EU countries at least
(because that's one thing the Americans do get wrong haha. The more frictionless it is for your citizens to pay tax, the better it is for you and the less they will resent the number 😂
Sometimes I wonder just how much of American anti-tax popular sentiment is not actually because of any fundamental cultural or political difference, but just because Americans have to file a complex tax return every year, and have to do mental Arithmetic every time they go to the fucking supermarket if they want to know how much things actually cost lol)
The problem is that employers would simply pay less to young people.
Even if they didn’t, plenty of people wouldn’t save money, would make a bad financial decision, or would get unlucky and would end up permanently screwed.
What young people actually need is negotiating power with their employers. Unions, labor laws, whatever, as long as it actually raises their wages above the cost of living.
Artificially raising wages above the cost of living won't help anyone. You'll get young people with no jobs, instead of young people with poorly paying jobs, and that's _far_ worse.
@@robertmartin6800 Raising minimum wage/unionization/worker protection laws doesn’t reduce employment rates, and even if it did, the government should just implement jobs programs too.
@@haph2087 They very much do reduce labor force participation. In market based economies prices regulate consumption, when the price of a commodity is increased but its value remains constant, its consumption declines, when the price of a commodity falls but its value remains constant, consumption increases. Why do you imagine that the same principle does not apply to labor?
The state paying people to pretend to work is not a viable solution to low labor force participation. Putting people out of work, then taxing the few who are left working into the ground so that you can subsidize the idle consumption of their newly unemployed peers is _insane._ When has that ever worked?
@@robertmartin6800 That’s only true for elastic demand. Labor, being necessary for almost every corporations methods of value generation, isn’t actually very elastic.
When the choice is between paying more of the profit to the employees, or making no profit, the former is always the correct choice.
Again, even if this wasn’t the case (but it is), that doesn’t mean that we shouldn’t promote workers rights, because the government can create/promote employment opportunities in forms *other* than wage slavery.
@@haph2087 There's no such thing as inelastic demand, demand always fluctuates, _especially_ for things like labor.
That's not the choice that people who purchase labor are given to make when the costs of labor are artificially increased. If they _can_ stay solvent, then their incentives will be to minimize their losses, and most often that will entail cutting labor input costs.
Jesus Christ, it's like I'm debating Lenin. "All citizens are transformed into hired employees of the state . . . ". Everyone knows that old Soviet laborer's joke, "they pretend to pay us, we pretend to work," taking labor from productive, economically viable private industries and putting into unsustainable, unproductive, public enterprises _will not_ solve any of our problems, it most certainly won't liberate us from want. "Wage slavery", please, as if you people actually thought slavery was wrong.
So, I watched it twice so I could pause it on the definition of 'gerontophilia', completely worth it!!!!!
seems good?
Ok, but here’s the thing: what if people work the 5-10-20 years till they have earned their 500k tax free and then bail to another country?
The government have spend money on their education, maintaining whatever the government maintains and what else the tax goes to, but they never see a penny from those people who enjoyed parts of that.
And those who don’t bail are made to pick up the slack, work in worsening conditions as the government has to save money to make up for the lose the people who left caused, so not only will they earn less then their system abusing counterparts, they also have to carry a heavier burden than otherwise
Net migration is very small in developed countries in healthy financial times. You're not wrong but you're looking at a tiny percentage.
So should we cancel out all the people who live off welfare and food stamps? Most of them don't have jobs and just rake in the tax payer benifits
Firstly, the example was 200k tax free, not 500k. And I'm sure it would be adjusted by country / by region depending on the relative cost of things like housing.
Secondly, I can't see how that would be more likely to happen under this hypothetical policy than it is currently. You could graduate from university and move abroad immediately and the state would never get back what it invested in your education and other public services (this is actually one of the big problems with Western universities training so many foreign students, as a % of them immediately return to leverage their new skills back in their home countries).
On the contrary, you could argue fewer people would leave the country. The point of the policy would be to enable young people to afford to buy property and start families at a younger age, and most people do this in their own countries, not abroad.
Thats more likely to happen now anyway. People are crippled with lifelong education debts, which they could evade by jumping the country and starting over financially, instead of continuing from a negative position with a broken tax system designed to keep the working class down.
Best take I've ever heard
Problem is this isn’t taking into account that the government and powerful people dont want you to be wealthy. They need their peasant like working class
There will always be peasant like working class, as there will always be people shit with money. Who will happily blow it on stuff they don't need. Thus the wheel keeps turning
Yoooo you got Rory on
Good observartion. Brilliant idea!
Completely agree. I’m 39. I have a four year old and a house with 65k left on the mortgage. My pension is worth 60k. Why can’t I take that, pay off my mortgage with 1 year of hard saving then being mortgage free, take risks on other investments and hammer my pension with 10x what I am now I’m paying a mortgage.
He's got a point. I feel poorer now in my mid thirties with three young kids and a new mortgage, than ever before, yet i know the long term outlook is great once I've paid a few years off and have no childcare fees. The costs of life are so jagged, being able to smooth them out over the years would have huge benefit.
Fantastic idea!
This would be incredible. My wife and I were lucky to have my parents that helped us buy our first rental. Starting in rentals at 24yrs old allowed us to build to 40 units by 37yrs old. Not only does the money early help but also we were physically able to work 140+hr weeks while raising 4 kids.
Very good point
great ideas 💡
This is perfect!!!
We need people like this in parliament. ...
Beautiful idea in its simplicity
Yes!!! I completely agree! I total stored wealth should be taxed and very little amounts. It equates to far more income for the state and far less damage on GDP and the drive to work.
Fully support this idea.
This makes so much sense.
My first job paid so low as a "trainee programmer" that I was working at a loss after mortgage and travel expenses and they were taking out compulsory pension contributions.
Thanks to the editor for saving me a trip to Webster lol
This is brilliant idea for all currant and future Finance Ministers of any country which cares about it's citizens !! So there is hope.
That's a brilliant idea!
As a Canadian. I like what hes saying, but sadly, i doubt that will ever happen with our current politicians. they ALL seem like they are against us at this point in time.
They don't expect you to leave that long 😂😅
It is so simple and is too hard for the system.
Brilliant 🤓🤓🤓 more people like this running the world thank you
I wish this was how it was because it's just so hard to get by now.
This is unbelievable!
This is a really good idea, but the cap should be a little bit higher ... set to whatever the market cost of your first house is.
Fantastic idea
Except now as a pensioner, I could not survive with the deprivation I lived with when I was a young man. Think of it this way, as a young man a cheap push lawnmower was fine. In fact for extra cash I could do other people's lawns. By midlife and a bigger garden, I needed a somewhat more expensive self-propelled lawnmower. Now as a pensioner I either need to get rid of the garden, pay someone else to do it or get an expensive robot to do it. A further issue is how would I pay someone else to do it if they are eking out their tax holiday and not needing to work for extra cash.
Very valid points. I am 38 and the tax money that could help my family I need to pay to the government.
I basically think we should all be supporting young people more. I agree with this.
this is such a spectacular idea
My background Politics, Philosophy, and Economics. This concept has REAL strength to it and should be looked at further. This would turn a shrinking middle class households into economic powerhouses a decade or so into the programs with the right implementation strategies and citizen guidance could be invaluable. Not everyone has the earning potential to make it big… giving the little folks a better life foundation can go a hell of a long way.
The absolute best idea I've ever heard. It's a shame the politicians and most of the voters are too old to benefit so they'll never embrace it
There was a time, when there was no income tax, in the US.
The 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913, changed all that.
Old folks should be helping their youngins more. Simple as. Take care of them young and they'll be able to afford to help their own later down the road.
It is actually such a brilliant scalable model.
When we started and lived in her mum's house we paid room and dinner at 50each which was less than half if we rented a room anywhere or 2/3 on a house share... So for two years we tucked the difference. After, we had a deposit for our own place and had been promoted so combined income was over 30%. This was easily saved and invested.
The party people we hung around with posing yet with no money in the clubs, buying magnums... The ones who used to laugh at our generic smokes, Fiat 500 with zero assist, at us drinking cask ale a quid a pint while they're on foreign beer at twice the price... We all came from the same background. They're in a tighter bind in midlife... We worked, saved, invested and reaped. Now the kids are spoiled and the people who can't imagine (or have the imagination) how we done it, cry to income tax us more😂😂😂