Yes, please do. I have recently discovered Gary's Economics and have been persuaded by him of the need to mobilise the assets of those who hold >£10m, and that taxing wealth has the potential to raise a meaningful amount of revenue. How would you ensure that your measures targeted the properly rich, and did not also catch the beleaguered middle class wage slaves? I speak as one who has previously been fortunate enough to be a higher rate taxpayer and hopes to be so fortunate again sometime, but currently does not earn enough to need to pay income tax. Indeed, our household income is probably less than a sixth of what it has been, and the difference in how wealthy we feel feels barely discernible! It does not feel fair to risk punishing the middle class more than those who have accumulated significant wealth with little effort in recent years.
If you are rich, you don't pay tax. Leona Helmsley understood this but couldn't keep her mouth shut.Perhaps a solution should be a turnover tax on very big companies in each country in which it operates. Perhaps tax avoidance schemes should be considered by a jury to decide if the object is tax evasion or not. BTW, I think you are doing a great job. You deserve more viewers.
Companies are concentrations of resources designed to make stuff, wealth, employ people etc. The idea that we tax them separately when we could just collect the same (or more?) when the wealth reaches real voting human beings is lunacy -- why do we want complexity just for the sake of it? Corporate & business taxation is about politics not equality, fairness or common sense - imagine how vast the economy would be now with no business taxes.
You can't hide land! You can tax it if the person who owns it isn't the person who lives on it or farms it or trades on it. Has anyone ever seen a shop for sale? Always for let! Always part of some portfolio extracting wealth from the community. Flip it so tax is payable on land unless you can prove that you own and use it. If tax isn't paid then the land is ceased by the state.
Land Reg Office only knows the supposed ownership of 75% of land in England. 'Supposed'- because even a lot of that 75% is owned by untraceable offshore shells... so it seems land can be hidden.
Yep, Henry Geroge's 'Land Value Tax (1890)' and abandoning income tax. The idea is not to tax production, as that benefits us all, but asset ownership, which benefits the just owner. Rentiers of the 19th Century caused the disaster that led to the destructive early 20th century. They were not saved by LVT ( which was the option favoured by Churchill and J.M Keynes) but by Rent Control, which is another way of stopping the exploitation of the rentier landlord and extracting property from the market.
@@tancreddehauteville764 if you read my comment you'll see that I specifically say you only tax land if it isn't productively used by the owner. About half UK farms are owner occupied. Only about 14% are wholly tenanted. In that case they could be sold to the farmer to avoid the tax. It is different for shooting estates and commercial property.
@@tancreddehauteville764being that most farming land isn't owned by the farmers who operate it, but rentiers who would bear the brunt of a LVT, would it make a difference? I mean the landlord could try to pass the LVT onto the farmer, but the farmer would either end up out of business or farming elsewhere, so it'd be counterproductive to the landlord as they'd ultimately lose their income stream.
The tax wealth message is gaining momentum, but I fear the politicians will just tax those with large incomes and pensions, meaning that high-paid professionals and the comfortably-off middle class will be targeted rather than the uber wealthy. £1 million in assets is not unusual nowadays and those with that sum are certainly not wealthy when most of it is tied up in a home and pension. >£10 million maybe worth targeting and >£100 million assets should be the target of a wealth tax.
We have proxy wealth taxes in the UK they are the fact that neither income tax and capital gains tax allow for inflation. People are therefore taxed on amounts that are merely maintaining the real value of their assets, this in turn leads to "investment" in inflation hedges such as works of art rather than productive assets
Though bank lending is under no obligation to lend towards productive investment, they will always choose collateral based lending towards assets such as mortgages first, in turn this pumps asset inflation.
Let's get a Government that DELIVERS on its projects when it takes money compulsorily first, and then fund it. Let's get a Government that does not constantly hand the bill to our children to pay, by issuing Gilts which can never be repaid, and must always be 'serviced' by future tax payers.
@@stephfoxwell4620Innovation is by no means progress, innovations in mass production and manufacturing have continually led to the living standards of millions of people diminishing and this is only one of hundreds of examples
The reasons for world economies teetering surely is linked to the vast wealth inequalities (and hence conversations about wealth tax). If too much money exists in too few hands and the ability to produce stuff globally is so vast, where is the incentive to build factories to make products that people can't afford to buy? They rather use their money to make money, growth ain't happening.
TH-camr Kieran Kaur “ACCOUNTANT EXPOSES: The UK Tax Regime Isn't Set Up For You To Get Rich” 5:46 Multimillionaire Rishi Sunak paid an overall tax rate of only 23%! The system is designed to tax workers not the wealthy who get most of their income from living off their assets.
@@tancreddehauteville764 They take home 800K. They are rich. They will end up wealthy. However, back to the basics. 1. Why has multimillionaire Starmer got a law just so he can evade tax? 2. This tax weatlh idea as the solution. How big are the pension debts run up by the DWP? You need to know that number because its one of the problems. Then you can see if your solution is a fix.
My friend. I appreciate the time you spend on keeping us informed about the economy. As of January 5th i count on $2,500 what do you suggest I invest in?
I sympathize with many people who had o knowledge digital marketing because currently dollar is unstable and coin is taking over to be universal currency
I appreciate maya and her team for providing valuable investment ideas. Initially, I had my doubts, but it turned out to be a significant change. Thank you, Ms Maya.
A Land Value tax would cover 70% of all wealth in the UK and you can structure it so that UK Citizens get a personal threshold of 2 million. Then you can simply structure it companies can report their owners for % shares of the land value tax so they can use their personal threshold if they live and pay tax in the UK. Unlike other wealth taxes it would have a crowding in effect to utilise that threshold and force landowners to be far more active in their utilisation of their land to generate returns.
@@downshift4503 there needs to be enough of a threshold to incentivise any type of landowners to actually pull in capital owners, 2% of 2million is 40k a year. Additionally, it needs to across all land based on local valuation of land in that aera X M^2. If anything that 2 million threshold is too low.
@@siskinedge But if people need to actually live somewhere then they are going to either directly or indirectly pay that tax (save living in a van), that's the goal. I agree land value needs to be part of the equation. My point here is not to raise revenue as the government doesn't require it in order to spend, it is to put downward pressure on prices. Land tax means smaller plots being more attractive. That means more houses, eventually anyway. It means that mature people would have a reason to move rather than sit on larger properties in later life as the costs would never go away.
In theroy, if you increase taxation on rent either rent has to increase proportionally, to ensure that property continues to be a viable investment, or house prices have to fall. Meaning that either renters get squeezed even more, or those with large mortgages (recent first time buyers) end up in negative equity. We saw a version of this over the last few years as interest rates increased the cost of capital for property. That time house prices did not fall, rents increased.
James, some further thoughts: Rent control wiped out the PRS, and 1 million tenants purchased their properties from former landlords. Land values crashed, meaning the proportion of houses was 3-15% of land value and the rest of the build value. Now, 70% equates to land value that, in a nutshell, results from commodification via Big Bang financialised debt. PRS 1910 = 90% of the property (owned by the top 10%), PRS 1980 =9%, Owner-Occupiers 58%, and Social Housing (inc Housing associations) 33%. The governments of the day post-1919 were forced into creating social housing as the PRS abandoned the market as there was no yield (i.e., unearned income). Due to the land value crash, an average postman on one income could get a mortgage for a 2 up 2 down.
@@grantbeerling4396but don't postmen (and postladies) deserve somewhere to live that isn't exploitative to the point of eating 75% of their wages? I mean, don't make the messenger homeless for delivering a final reminder from the utility company. It's not their fault the bill wasn't paid.
So taxing assets would be a better form of taxation. Surely a simple alteration of capital gains to make it the same as income would be a sensible start.
Some of these arguments don't add up. First of, it may be a combination of regulation and tax that addresses equality - it's not necessarily one or the other. Second, if the accumulation of wealth has already happened taxing gains isn't the complete answer, Third, of course taxing wealth is difficult. Lots of things that need and should be done are difficult.
I agree. Don’t tax the wealth so if you want to be fair don’t tax the poor. Income tax is a corrupible tax on what you earn and I know that no matter what tax, it is corruptible as it is a law and law is what it should be not what it is. Wouldn’t a broad tax on spending be better.
Inequality stifles growth, which is one reason I believe it is necessary to tax wealth. Richard advocates taxing the income from wealth, such as investment income, at a similar rate to work income. His logic seems impeccable. If only Starmer and Reeves would listen...
From a practical point of view, RM is quite right. Let's make sure we're getting everything we can from the sources we've got first. That means taxing dividends, capital gains and property rents properly but also looking for international cooperation to close down tax havens and money laundering.
Things are obviously not improving. I'm looking into high-yield dividend stocks. Selling $200,000 in stocks without reinvesting is stupid. If I don't invest it, I might end up with cash soon. Any particulars? Today, the economy and stocks are not the same thing.
I also believe that everyone should have a Margin of Safety in their portfolios, and keep in mind that time in the market is more important than timing the market.
The market's volatility makes DIY risky. Choose top-tier ETFs, dividend aristocrats, and a trusted planner. I've turned $480,000 into $33,000 in quarterly dividends using a licensed one, which is a significant accomplishment.
Oh very well then, conducting due diligence on Lina Dineikiene should suffice. The lady has established herself over time and really does a great job ion the charts.
This video is both good and frustrating. It’s frustrating because simple wealth tax to people means tax the super rich. What I think Richard is taking about is how we can do that. I think what’s important is people first need to know we need to tax the crap out of wealth. I don’t think they need the detail of how we do that. So this video would be much better if it didn’t start with we don’t need wealth taxes and just focus on how we get wealth from the super rich into the system via dividends, capital gains etc.
Extreme wealth produces goods and services that Society in general cannot consume eg Palaces, Super Yachts and Private Jets let alone monopoly over legal and accounting services!!
Excellent observation. One of the best ways is transparency in law, which leads to accountability in the law for everyone. It is a level playing field for fairness. Then the old 'commercial sensitivity' boll*cks go out the window. This is what the Nordics do.
Yes to the ideas you put forward and a wealth tax, even just a one off. Chase tax avoidance and fraud rather than chasing social security fraud. Captain gains equal to income tax.
You truly believe this.. society is a collective, hopefully like minded ppl.. & as we live by a fiscal system.. protective financial buffers should incorporate all within .. that is not happening.. hence unsettling times, lack of trust in who leads or controls.. high criminality..failing public services.. & ppl feeling disorganised, disoriented.. & we are all told we are all in this together.. sovereignty doesn’t fill bellies..& is Latin for above .. above who ? 🙄🙄🤔🤔😎
Surely action on all the fronts Richard mentions. Why specifically omit wealth tax? None of it will work very effectively though unless we change the culture in the revenue collection agencies. Revenue officers have to be of highest quality and rewarded accordingly as perhaps the best paid and respected of all civil servants. We can't go on despising the taxman while expecting him to do a highly demanding and sophisticated job collecting what's owed by today's rich.
Thanks, Richard - great stuff as always. Hopefully, the tide is turning to rein in these mega-monopolies as kick-monopolistic-butt Lina Khan, Commissioner of the US FTC has been and continues to do on the other side of the pond. Maybe she has a sister.
I’m interested to know more about the accumulation of wealth through the state. I’ve heard it called “ corporate benefits “ and “ corporate socialism “. It seems absurd that within a system built on “ meritocracy” that the “ taxpayer “ is paying billions to corporations who are avoiding paying taxes and avoiding paying good wages. Surely this has a massive impact on the effectiveness of meritocracy? Couple “ corporate benefits” with “corporate monopolies” and surely the system is no longer meritocratic ?
The tax system in this country has more holes than a sieve, we need some simple fixes for that but we can't ignore the problem of taxing billionaires because it is hard. Lets put in some really punitive measure for the mega rich such as 100x the tax found fines for not declaring. Pay first and appeal later principles. Transparency of ownership - not hiding behind companies or tax havens. Simple fixes are that dividends paid in excess of salary drawn will be taxed at your nominal tax rate. A total tax free allowance, not have lots of categories, that could start at the same level as everyone else - what that £12k? No offset of licence or IPR for marketing or trade names to offshore profits, eg if you are a big US corp and want to charge your UK branch £40m a year to use the name then that's not tax deductible as a cost for calculating profits. If they don't like it don't use the brand name in the UK.
Great videos. With this one I can't agree. Yes on regulation changes, and yes a wealth tax will be virtually impossible to implement, but actually what is the problem with some people being uber rich? I don't have a problem with that - why should I? It makes no sense - other than when filtered through an irrational sense of envy. The uber rich (most anyway) provide returns in ways other than through their personal tax bill. As an illustration, the job I have was not created by me but by someone richer than me. It is not MY job, but a job that I fill for a period of time. Someone else will fill that job after I have resigned or retired - a job created by an Elon Musk or a Steve Jobs. And let us be clear - the ordinary Joe doesn't actually pay any income tax - it's all paid by his employer. Joe doesn't have to find the tax each month - the employer does. Elon Musk, if you like, has to find that money. If I pay a higher % tax than the uber rich it's because I am not providing my fellow earthlings with value in any other form. I got paid for doing a job, completely risk free. If I decide one day to risk all my money to start a business or make an investment i do not expect to have to pay tax (in the form of CGT) at the same rate as someone taking no risk and drawing a salary. The REAL answer to the tax problem is for governments not to be so profligate with the money we all, including the uber rich, already give them....
Could you please recommend economics/tax/investment books or articles that you think are usefully? You can do an introductory video on them if you have time? Going through your "The Joy of Tax". Thank you in advance.
@@Redf322 Gary focuses on the big picture while I'm looking into the micro level and you seem to offer that. Hence, my request. Thank you for the reply.
Your right to talk about efficacy of implementing tax. But isn’t another stumbling block to policy and perhaps the biggest, the popular support of policy versus lobbying power against it? Lobbying is where the wealthy influences actual policy. Lobbying organisations can be setup as charities such as the iea. Don’t people get tax breaks for donations to charity? I suppose part of that answer is the better regulate that also?
Didn't mention family offices. wow. That's literally the whole issue. The collapse we have seen in living standards and consumption and wages is either an unexplainable mystery, or it's the ever greater transfer of assets from ordinary people to family offices. I think it should be obvious which of those 2 options is correct.
Many have their wealth tied up in land. Tax land *values.* It cannot be taken offshore. Its location is known to the inch. The tax *cannot* be avoided. It should be implemented asap.
@@downshift4503 We have a problem few know we have. 50% or more of households own a residential property enjoying the *_unearned_* increases in land value, value they did *_not_* create. It is hard for them to actually see the broader picture of how the current system works against _them_ and their _offsprings._
@@downshift4503 The criticism of Land Value Tax is that it focuses only on land. The updated Georgist views of taxing economic rents includes finance, all monopolies and all common resources emanating from land. This is an aspect of Michael Hudson's work on debt.
@@johnburns4017 To me the problem is that people are forced to live somewhere. I've no issue with home equity in principle (ie being "unearned"), but something is required to push in the opposite direction. Houses are not productive assets, the latter of which could be priced to the moon but people aren't forced to buy or rent them. A form of Georgism would make owning land less attractive. Council housing is still necessary. Some people will not have jobs that reflects the cost of owning or renting their own building.
@@johnburns4017 I don't mean pure Georgism necessarily (eg replacing other taxes), but certainly for land / homes. All people require somewhere to live and shouldn't need to bid their lives away to secure that. The free market doesn't function well for homes. Again - it won't be popular now we've spent decades trying to convince everyone to own homes.
By focussing on productive companies, instead of the already wealthy, you are missing the point. The problem is not just the concentration of savings into a few hands, but what they do with them. Inevitably, money seeks the safest investments. That means buying up assets, pricing them out of the hands of ordinary people, and destroying the general economy by rent seeking behaviour. I can guarantee you, that not only are wealth taxes not coming too early… They are probably already too late to avoid another Great Depression. People undervalue the common good, until it’s all gone.
Regulation is made through/by governments. Billionaires bankroll politicians and political Parties, effectively controlling, safeguarding and protecting the very financial mechanisms that made them obscenely rich in the first place! Reform is not going to happen, things will get worse. The rich just need to keep the perceived societal balances within a certain range in order to carry on carrying on.
Still waiting Richard for why Civil service pension debts, like other state pension debts are off the books? You're an accountant. Why are they not on the balance sheet?
@@Vroomfondle1066 The reason that Richard won't answer is becaue £16 trillion of debt is a disaster. People would go after socialists for the mess. They would go after the accountants. ===== The state can create money to cover pension liabilities - whether that causes inflation ===== MMT for you. So you print to pay. Prices double. What happens to teh £16 trillion debt? It's now £32 trillion. Infllation linked debt doesn't work the same way as fixed rate debts.
@@Vroomfondle1066 So lets put the other angle on it. If people had invested their NI, what would have happened? For Mr Avearge, 1.2 million in a fund. 35K income, fund not touched. So why don't we have a full audit, and everyone gets told what they have now, and what they could have had? Transparency and openness.
@@tancreddehauteville764 , they are liabilities that become payable when the individuals retire Liabilities are debts. Debts are liabilties. The reason is they are things that they owe. The borrowing, just like the pensions and other debts/liabilties are only paid when the conditions in the law/contract say they are paid. IFRS state that pensions are liabilities or debts. They appear on the balance sheet. Why would the state hide its liabilities off the balance sheet? I know. I'm interested as to why you think they do it? For example, gilts are a contract, civil service pensions a contract. Why omit one? They aren't going to pay the pensions.
@@tancreddehauteville764 There's always a test. Cancel the civil service pension. They aren't owed, its not a debt. Do you think that those with no pensions, will state they are owed a pension?
Unlike you, Professor Murphy, Gary Stevenson (YT "Gary's Economics") has actually gone out in the real world and *actually become wealthy* - is a *MASSIVE FAN* of a harsh, direct Wealth Tax.
But Richard, the issue is not just the rich companies. The issue is the small group of people who own the shares of the companies, the buildings, the infrastructure, the services, and so on. Let's not pretend these companies are not driven by the interests of the ultra rich. We have to hit the ultra rich, the companies are a consequence of the financial desires of the ultra rich. While we should absolutely stop subsidies and raise taxes on capital gains, if we don't tax the wealth the situation is not gonna change fast enough. We don't tax wealth because it's easy, we tax wealth because it's necessary.
@@Vroomfondle1066 The two are not mutually exclusive. I absolutely agree that the capital gains taxation is needed to make investments less attractive. But the inequality is too big, we must correct it before we settle on "cruise speed"
@@Vroomfondle1066 Publicly Owned Scottish Water awarded Best in the UK in the 2024 UK Annual Water Company Performance Survey. Publicly Owned ScotRail recognised as a top employer in the UK in the 2024Top Employers Institute Certification Programme. Publicly Owned Inverness Airport awarded 2023 best airport in Europe in under 2 million passengers category by the Airports Service Quality Awards Publicly Owned Prestwick Airport is hosting the International Ayr Show next month.
Richard seems to have completely missed the accumulation of assets such as housing. Which once in the hands of the super rich rarely ever passes out of their hands. See Piketty 2014 for the best research into this. I fear Richard is being contrary here simply because he fears the likes of Piketty and Stevenson who have become more in touch with the politics than he is.
Are you not slightly confusing people by referring to Tax as revenue. I'm sure that is the technical term for it but that just perpetuates the myth that tax pays for stuff. I agree that regulation would help with the things you say it does but seems to me that we need to stop the wealthy from buying up all the assets, thus generating even more wealth at the expense of everyone else. That in my mind needs to stop, either by regulation, or taxation or both!
We already have a wealth tax- it is called inflation and targeted at 2% in the UK. Even better, it costs nothing to collect, and applies only to static wealth (invest in equities, and the underlying value of companies is not reduced by inflation). Try to do it by direct tax and a host of difficulties ensue- visibility, cost of liquidation (if you have to realize value in an asset to pay, you also pay capital gains tax- tax being taxed), illiquid assets (little old lady in big house). Inheritance tax is a wealth tax too- and you can make a case for 100% on that (why is it fair that the chance of birth gives you wealth? You will probably already have benefited from a privileged upbringing)
@@RogerRoving That was my point. You want to ensure money is working, and most fixed assets produce a return (land = rent). Only idle money suffers from inflation. A targeted wealth tax that is easy to collect and difficult to avoid. At the right rate, it is a 'boiling frogs' type of tax. What is not to like?
@@Tensquaremetreworkshop Money invested in capital is idle. The problem with the modern economy is overvalued capital assets. Meanwhile there is no such thing as an "easy to collect" wealth tax.
@@RogerRoving 1) Which part of 'capitalist society' do you not understand? A key measure of performance of any listed company (including property companies) is ROI - return on investment. Far from idle. It underlies the operation of our economy. The price of an asset should be its discounted present value. Errors in valuation, of course, exist- but the market exists to arbitrage this away. 2) Did you read? This was my point- inflation is very easy to collect. Controlling it has to be done anyway, so that is not a cost attributable to collection. Other methods have high friction and error- as well as disincentive. In our tax systems, we do not count wealth until it is realized. You pay capital gains tax when you sell shares at a profit, not before. At what point do you wealth tax that money? Before the sale? After? If the latter, the tax base shrinks greatly. If the former, you would have to sell shares to pay the tax, causing CGT to apply- taxing the tax. The tax system is complex enough without this...
GROSS inequality-ee. The problem is not the 1% - Inequality - it's the 1% of the 1% - Gross Inequality - the 0.01%. And it's not just that it's bad, it's that it's accelerating; it's getting worse at an unimaginable rate. Every year, vastly more wealth is concentrated in fewer and fewer hands. Even when someone comes up with a method of reversing the flow, making a dent will take thousands of years because the amounts of concentrated wealth are so great, and we are incapable of imagining what a billion is. If you were paid £1,000 a day, it would take less than 3 years to reach a million. To reach a billion would take 2,737 years. 34 life spans. You'd have to start saving 700 years before the birth of Jesus, the debt campaigner. "Forgive us our debts, as we forgive our debtors" We are the 99.99%. Feudalism is history. Every billionaire is a policy failure: the cost of every billionaire is 1,000 millionaires
"We don't need a wealth tax because my small terrace house in west London that I bought on an average salary 40 years ago is now worth 1.2 million & I did absolutely nothing to increase its value".
The problem with inheritance tax is that only successful/lucky middle class families pay it. The very wealthy make sure they don't through various means. I suppose it depends on what you consider "wealth". For me it is consumption and ownership of resources. I.e. things with universal value such as land and energy. All adults should get an allowance of these and have to pay additional tax if they want more than their fair share. The tax rate should rise exponentially once the threshold is crossed.
@@tancreddehauteville764 I don't disagree with you. It's just that the very wealthy (£10m+) can afford the services of professional tax dodgers, thus the lucky middle classes get hammered and the very wealthy avoid it, so massive inequality persists and gets even worse. Better to tax land and energy consumption above a threshold exponentially. Even tax lawyers can't change the laws of physics!
Yes, all very good in principle. But the reason the system is like it is, is because rich, powerful and influential people made it that way, and will not allow it to change anytime soon or you wouldnt have needed to make this video.
@@Vroomfondle1066 You think? It's all very clever, isn't it. The PR costs millions. The banks didnt want to be controlled by the EU so we left and a large part of the public thought they'd 'won', because that's what they were told.
th-cam.com/video/777XvUo-8eI/w-d-xo.html if they go the LLP route you will never pay tax. Considering that tax pays for nought and is merely a drain on any economy which has its place this could be a good thing.The privacy aspect is that no one ever knows who to tax
Would it not be simpler to tax all income from all/any sources (including “perks”, bonuses, shares, cars, homes, anything which is effectively income) aggregated together at the same level, and rising incrementally to well above 50% for extremely high incomes.
The “perks”, bonuses, shares, cars, homes as you call them are taxed and have been for decades. The value of these perks is included each year on a P11D form that is then considered by HMRC as income and taxed accordingly.
CGT is only taxed at the point of sale. I'm all for equalising the rates on CGT, IHT etc, but we need a wealth tax too. I agree that a wealth tax won't solve all societal problems, but that's not a reason not to do it.
If the wealth was created with the aid of Government legislation. Then Tax is justifiable. Which pretty much applies to all wealth denominated in currency.
Yes -- simplified taxation; broad, simple and low. The same rate for any sum earned regardless of source; it is immoral that the tax-payer who gains wealth by selling his labour pays a higher rate than the tax-payer who trades in assets. BUT -- in a supposed liberal democracy the idea that the state has unlimited redistributative authority is ludicrous. Nobody in the UK has authorised centralised ideology in the UK because they haven't been asked - because we don't have a constitution constraining our politicians - because Democracy has been standing still for a century. Big-State thinkers deciding what freedom they will allow others is just continuing authoritarian dystopia. In real democracies people don't spend time obsessing about relative wealth mainly because so much more is created -- see the Scandis or Switzerland who have only marginally more freedom.
@@downshift4503 - Why should your neighbour subsidise/encourage your risk taking? At a basic level we tax on wealth acrual. If we have different rates for different risks or behaviours then we need a million different rates to treat all fairly. Where is the evidence that different CGT/Income rates is beneficial to the community? This is just custom & habit and breaks the 'first law of democracy' - equality of treatment before the state.
@@andyinsuffolk They are not subsidising it. Taxes don't fund government spending. They act to drain the reserves of previous spending. The primary reason for tax is to force people to obtain money and for most this means needing a job. The government isn't going to provide all those jobs, so the private sector doe and needs to innovate in order to grow. Consider how much of UK PLC is tech, next to nothing. It's a disaster in the UK. The US meanwhile has individual companies that are as similar in size to the UK entire stock markets, That's a loss for the UK in GDP, jobs etc. The economy thrives on investment. If entrepreneurs have good ideas, who is going to invest in their risky ventures if CGT tax rates are high? Investors will shift to low risk because the risk / return ratio will suffer (risky ventures often fail which means permanent losses). If I can currently get 5% in a savings account for zero risk (paid for by the government), why would I bother taking risks to get a few % more only to hand over half of that to the government? Everyone gains where investment means higher GDP. Higher GDP means that the government debt falls (as its true measure is Debt to GDP). Where is the evidence that identical CGT / income tax rates is beneficial to the economy?
@@andyinsuffolk To add.... what I would like to see is more risk taking, not less. Instead of paying people risk free money, interest rates should be lowered to encourage investment. Instead of banks lending money on asset speculation (mortgages) the focus should be lending into productive ventures.
@@downshift4503 - Too many points to answer there.. but you are making the (very narrow) special interest argument. If employed tax-payer gets to keep as much of his income as the asset trader he will probably more quickly become an investor himself especially as the tax implication is the same! That might even represent greater investment capacity overall - or better risk taking - or ... You also demonstrate the problem of artificial thresholds how do we know that the numerical differential between CGT/IT is good, bad or indifferent? NO thresholds is the 'natural' basis.
@@Vroomfondle1066 I think typically inflation does help the poor, not always of course, its not perfect. Benefits, minimum wage, state pensions typically rise with inflation over time. That's not true when it comes to all assets. It certainly helps in terms of government "debt" as debt / GDP can diminish with inflation... therefore the government gets to reduce the national debt in real terms without doing anything at all. Debtors tend to do ok with inflation.
@@stephfoxwell4620 So how big are the socialist welfare state's pension debts? Lets get the problems out there. How do the socialist pay the £16 trillion debt with no assets that they have created?
@@stephfoxwell4620 Socialism is just predation on a small number of people and the masses to enrich the socialist elite. Some animals are more equal than others
@@stephfoxwell4620 The answer to that we already know from history: capitalism! Read professor Bas Van Bavel's 'The invisible hand'. Unless of course, Steph, you define progress as having as much poverty as possible, and a handful of ever richer robber barons? And no, poverty has not decreased under capitalism. Those are cherry picked figures, when looking at the full world wide picture, poverty has reached an all time high.
Wealth tax is not to bring billionaires into line... It's to raise more revenue from people who can afford it. I agree with you that it won't do what you say it will do... but i disagree that's the point of a wealth tax. If you're a billionaire... you can afford to pay an extra X amount. What effect will that have? It will put more money into the coffers of the uk so it can be spread out - or simply wasted as is being done right now with support for wars etc.
@@tancreddehauteville764people register in other countries to avoid tax, you know that argument of 'if you tax the rich, they'll leave'? Let them leave, most of them have on paper, the assets are there still. If you let the rich keep sucking up all the assets with their income from existing assets, they'll own it all.
Sounds reasonable. Or just create a massive bureaucracy of easily corruptible jobsworths whose job it is to hunt down and assess every bit of (offshore/overseas?) wealth of individuals. This would also be a job creation scheme getting unemployment right down. What could go wrong?🤣
This is definitely a topic that you and Gary's Economics should have an extensive collaboration over.
Please do try to make that happen.
They would both be saying the same thing.
@@Redf322 I'm not sure they would. I mean, yes, in terms of taxing the wealthy, but not necessarily in terms of the strategy.
@@nickhbttrue enough it could be interesting.
Yes, please do. I have recently discovered Gary's Economics and have been persuaded by him of the need to mobilise the assets of those who hold >£10m, and that taxing wealth has the potential to raise a meaningful amount of revenue.
How would you ensure that your measures targeted the properly rich, and did not also catch the beleaguered middle class wage slaves?
I speak as one who has previously been fortunate enough to be a higher rate taxpayer and hopes to be so fortunate again sometime, but currently does not earn enough to need to pay income tax. Indeed, our household income is probably less than a sixth of what it has been, and the difference in how wealthy we feel feels barely discernible!
It does not feel fair to risk punishing the middle class more than those who have accumulated significant wealth with little effort in recent years.
If you are rich, you don't pay tax. Leona Helmsley understood this but couldn't keep her mouth shut.Perhaps a solution should be a turnover tax on very big companies in each country in which it operates. Perhaps tax avoidance schemes should be considered by a jury to decide if the object is tax evasion or not. BTW, I think you are doing a great job. You deserve more viewers.
A common tax regime for companies is desirable. Problem is, countries are in competition for tax.
I agree with taxing companies registered outside this country on its turnover in the UK, to stop the intellectual property offshore scam.
Companies are concentrations of resources designed to make stuff, wealth, employ people etc. The idea that we tax them separately when we could just collect the same (or more?) when the wealth reaches real voting human beings is lunacy -- why do we want complexity just for the sake of it? Corporate & business taxation is about politics not equality, fairness or common sense - imagine how vast the economy would be now with no business taxes.
It's not tax evasion if the rich don't have an income, they don't take income like regular folk, their profits remain in stock, they live off loans...
@@andyinsuffolk Couldn't agree more.
You can't hide land! You can tax it if the person who owns it isn't the person who lives on it or farms it or trades on it. Has anyone ever seen a shop for sale? Always for let! Always part of some portfolio extracting wealth from the community. Flip it so tax is payable on land unless you can prove that you own and use it. If tax isn't paid then the land is ceased by the state.
Land Reg Office only knows the supposed ownership of 75% of land in England. 'Supposed'- because even a lot of that 75% is owned by untraceable offshore shells... so it seems land can be hidden.
@@garyb455 I don't think land ownership is transparent in Russia.
Yep, Henry Geroge's 'Land Value Tax (1890)' and abandoning income tax. The idea is not to tax production, as that benefits us all, but asset ownership, which benefits the just owner. Rentiers of the 19th Century caused the disaster that led to the destructive early 20th century. They were not saved by LVT ( which was the option favoured by Churchill and J.M Keynes) but by Rent Control, which is another way of stopping the exploitation of the rentier landlord and extracting property from the market.
@@tancreddehauteville764 if you read my comment you'll see that I specifically say you only tax land if it isn't productively used by the owner. About half UK farms are owner occupied. Only about 14% are wholly tenanted. In that case they could be sold to the farmer to avoid the tax. It is different for shooting estates and commercial property.
@@tancreddehauteville764being that most farming land isn't owned by the farmers who operate it, but rentiers who would bear the brunt of a LVT, would it make a difference? I mean the landlord could try to pass the LVT onto the farmer, but the farmer would either end up out of business or farming elsewhere, so it'd be counterproductive to the landlord as they'd ultimately lose their income stream.
The tax wealth message is gaining momentum, but I fear the politicians will just tax those with large incomes and pensions, meaning that high-paid professionals and the comfortably-off middle class will be targeted rather than the uber wealthy. £1 million in assets is not unusual nowadays and those with that sum are certainly not wealthy when most of it is tied up in a home and pension. >£10 million maybe worth targeting and >£100 million assets should be the target of a wealth tax.
We have proxy wealth taxes in the UK they are the fact that neither income tax and capital gains tax allow for inflation. People are therefore taxed on amounts that are merely maintaining the real value of their assets, this in turn leads to "investment" in inflation hedges such as works of art rather than productive assets
Though bank lending is under no obligation to lend towards productive investment, they will always choose collateral based lending towards assets such as mortgages first, in turn this pumps asset inflation.
Let's get a Government that DELIVERS on its projects when it takes money compulsorily first, and then fund it. Let's get a Government that does not constantly hand the bill to our children to pay, by issuing Gilts which can never be repaid, and must always be 'serviced' by future tax payers.
💯. It’s time we stop the scam.
Tax AND regulate. Nationalise everything that is too big to be a cooperative and make everything else except small family businesses a cooperative.
@@stephfoxwell4620 Because that's working well for us, right?
+ Replacing number of shares = number of votes with 1 person 1 vote, a useful potential tool in the shift to worker-coop.
Force PLCs to democratise
@@stephfoxwell4620Innovation is by no means progress, innovations in mass production and manufacturing have continually led to the living standards of millions of people diminishing and this is only one of hundreds of examples
The reasons for world economies teetering surely is linked to the vast wealth inequalities (and hence conversations about wealth tax). If too much money exists in too few hands and the ability to produce stuff globally is so vast, where is the incentive to build factories to make products that people can't afford to buy? They rather use their money to make money, growth ain't happening.
TH-camr Kieran Kaur “ACCOUNTANT EXPOSES: The UK Tax Regime Isn't Set Up For You To Get Rich” 5:46 Multimillionaire Rishi Sunak paid an overall tax rate of only 23%! The system is designed to tax workers not the wealthy who get most of their income from living off their assets.
The Kier Starmer QC tax avoidance law. Not ever Sunak had a personalised tax evasion law.
Frankly I'm surprised that RS paid as much as 23% tax rate. He must have had poor advice along the way.
@@tancreddehauteville764 They take home 800K. They are rich. They will end up wealthy.
However, back to the basics.
1. Why has multimillionaire Starmer got a law just so he can evade tax?
2. This tax weatlh idea as the solution.
How big are the pension debts run up by the DWP?
You need to know that number because its one of the problems. Then you can see if your solution is a fix.
@@tancreddehauteville764 Also, isn't it very patriachal, that the left say that his wife's money is his money.
@@tancreddehauteville764 that same fund manager will pay close to £1M in tax and NI. Why should he pay more?
My friend. I appreciate the time you spend on keeping us informed about the economy. As of January 5th i count on $2,500 what do you suggest I invest in?
investment has been the easiest means to save and multiply income.
I sympathize with many people who had o knowledge digital marketing because currently dollar is unstable and coin is taking over to be universal currency
However, you work with an expert to help you make informed lnvestment decisions and increase your chances of achieving your financial goals.
I appreciate maya and her team for providing valuable investment ideas. Initially, I had my doubts, but it turned out to be a significant change. Thank you, Ms Maya.
What is the process?
Clear and concise. A very welcome contribution!
A Land Value tax would cover 70% of all wealth in the UK and you can structure it so that UK Citizens get a personal threshold of 2 million. Then you can simply structure it companies can report their owners for % shares of the land value tax so they can use their personal threshold if they live and pay tax in the UK. Unlike other wealth taxes it would have a crowding in effect to utilise that threshold and force landowners to be far more active in their utilisation of their land to generate returns.
I don't see why any land owners should be exempt where its for residence.
@@downshift4503 there needs to be enough of a threshold to incentivise any type of landowners to actually pull in capital owners, 2% of 2million is 40k a year. Additionally, it needs to across all land based on local valuation of land in that aera X M^2. If anything that 2 million threshold is too low.
@@siskinedge But if people need to actually live somewhere then they are going to either directly or indirectly pay that tax (save living in a van), that's the goal. I agree land value needs to be part of the equation. My point here is not to raise revenue as the government doesn't require it in order to spend, it is to put downward pressure on prices. Land tax means smaller plots being more attractive. That means more houses, eventually anyway. It means that mature people would have a reason to move rather than sit on larger properties in later life as the costs would never go away.
In theroy, if you increase taxation on rent either rent has to increase proportionally, to ensure that property continues to be a viable investment, or house prices have to fall.
Meaning that either renters get squeezed even more, or those with large mortgages (recent first time buyers) end up in negative equity.
We saw a version of this over the last few years as interest rates increased the cost of capital for property. That time house prices did not fall, rents increased.
I do think Georgism is the solution to housing, combined with council housing.
James, some further thoughts: Rent control wiped out the PRS, and 1 million tenants purchased their properties from former landlords. Land values crashed, meaning the proportion of houses was 3-15% of land value and the rest of the build value. Now, 70% equates to land value that, in a nutshell, results from commodification via Big Bang financialised debt.
PRS 1910 = 90% of the property (owned by the top 10%), PRS 1980 =9%, Owner-Occupiers 58%, and Social Housing (inc Housing associations) 33%. The governments of the day post-1919 were forced into creating social housing as the PRS abandoned the market as there was no yield (i.e., unearned income). Due to the land value crash, an average postman on one income could get a mortgage for a 2 up 2 down.
@@grantbeerling4396but don't postmen (and postladies) deserve somewhere to live that isn't exploitative to the point of eating 75% of their wages?
I mean, don't make the messenger homeless for delivering a final reminder from the utility company. It's not their fault the bill wasn't paid.
@@richardswift4196 You may need to re-read the comment.
The answer is yes and that is via rent control.
Couldn't agree more. Nobody ever said this was supposed to be easy.
The old adage; if it was, we'd have done it by now.
So taxing assets would be a better form of taxation. Surely a simple alteration of capital gains to make it the same as income would be a sensible start.
Some of these arguments don't add up. First of, it may be a combination of regulation and tax that addresses equality - it's not necessarily one or the other. Second, if the accumulation of wealth has already happened taxing gains isn't the complete answer, Third, of course taxing wealth is difficult. Lots of things that need and should be done are difficult.
I agree. Don’t tax the wealth so if you want to be fair don’t tax the poor.
Income tax is a corrupible tax on what you earn and I know that no matter what tax, it is corruptible as it is a law and law is what it should be not what it is. Wouldn’t a broad tax on spending be better.
Yes we do. The differential between rich and poor is obscene....
+ the political power aspect is fundamental on so many levels
Inequality stifles growth, which is one reason I believe it is necessary to tax wealth. Richard advocates taxing the income from wealth, such as investment income, at a similar rate to work income. His logic seems impeccable. If only Starmer and Reeves would listen...
From a practical point of view, RM is quite right. Let's make sure we're getting everything we can from the sources we've got first. That means taxing dividends, capital gains and property rents properly but also looking for international cooperation to close down tax havens and money laundering.
Excellent Richard - it all makes sense (even to me)!
The problem with taxing the rich is basically they have the wealth and the connections to prevent that from happening in any meaningful way.
Things are obviously not improving. I'm looking into high-yield dividend stocks. Selling $200,000 in stocks without reinvesting is stupid. If I don't invest it, I might end up with cash soon. Any particulars? Today, the economy and stocks are not the same thing.
I also believe that everyone should have a Margin of Safety in their portfolios, and keep in mind that time in the market is more important than timing the market.
The market's volatility makes DIY risky. Choose top-tier ETFs, dividend aristocrats, and a trusted planner. I've turned $480,000 into $33,000 in quarterly dividends using a licensed one, which is a significant accomplishment.
I'm intrigued by this. I've searched for CFA online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Oh very well then, conducting due diligence on Lina Dineikiene should suffice. The lady has established herself over time and really does a great job ion the charts.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I sent her an email hopefully she responds.
This video is both good and frustrating. It’s frustrating because simple wealth tax to people means tax the super rich. What I think Richard is taking about is how we can do that. I think what’s important is people first need to know we need to tax the crap out of wealth. I don’t think they need the detail of how we do that.
So this video would be much better if it didn’t start with we don’t need wealth taxes and just focus on how we get wealth from the super rich into the system via dividends, capital gains etc.
Extreme wealth produces goods and services that Society in general cannot consume eg Palaces, Super Yachts and Private Jets let alone monopoly over legal and accounting services!!
Excellent observation. One of the best ways is transparency in law, which leads to accountability in the law for everyone. It is a level playing field for fairness. Then the old 'commercial sensitivity' boll*cks go out the window. This is what the Nordics do.
It seems he is not against taxing wealth but in favour of being clever about how this tax works
So your main idea is not to bother, in the main !
Yes to the ideas you put forward and a wealth tax, even just a one off. Chase tax avoidance and fraud rather than chasing social security fraud. Captain gains equal to income tax.
Logical points well explained. Are you advising or speaking to any minister?
You truly believe this.. society is a collective, hopefully like minded ppl.. & as we live by a fiscal system.. protective financial buffers should incorporate all within .. that is not happening.. hence unsettling times, lack of trust in who leads or controls.. high criminality..failing public services.. & ppl feeling disorganised, disoriented.. & we are all told we are all in this together.. sovereignty doesn’t fill bellies..& is Latin for above .. above who ? 🙄🙄🤔🤔😎
Well said!
Surely action on all the fronts Richard mentions. Why specifically omit wealth tax? None of it will work very effectively though unless we change the culture in the revenue collection agencies. Revenue officers have to be of highest quality and rewarded accordingly as perhaps the best paid and respected of all civil servants. We can't go on despising the taxman while expecting him to do a highly demanding and sophisticated job collecting what's owed by today's rich.
excellent vid, well worth hearing out - despite the off-putting title
Thanks, Richard - great stuff as always. Hopefully, the tide is turning to rein in these mega-monopolies as kick-monopolistic-butt Lina Khan, Commissioner of the US FTC has been and continues to do on the other side of the pond. Maybe she has a sister.
I’m interested to know more about the accumulation of wealth through the state.
I’ve heard it called “ corporate benefits “ and “ corporate socialism “. It seems absurd that within a system built on
“ meritocracy” that the “ taxpayer “ is paying billions to corporations who are avoiding paying taxes and avoiding paying good wages.
Surely this has a massive impact on the effectiveness of meritocracy?
Couple “ corporate benefits” with “corporate monopolies” and surely the system is no longer meritocratic ?
The tax system in this country has more holes than a sieve, we need some simple fixes for that but we can't ignore the problem of taxing billionaires because it is hard. Lets put in some really punitive measure for the mega rich such as 100x the tax found fines for not declaring. Pay first and appeal later principles. Transparency of ownership - not hiding behind companies or tax havens.
Simple fixes are that dividends paid in excess of salary drawn will be taxed at your nominal tax rate. A total tax free allowance, not have lots of categories, that could start at the same level as everyone else - what that £12k?
No offset of licence or IPR for marketing or trade names to offshore profits, eg if you are a big US corp and want to charge your UK branch £40m a year to use the name then that's not tax deductible as a cost for calculating profits. If they don't like it don't use the brand name in the UK.
Great videos. With this one I can't agree. Yes on regulation changes, and yes a wealth tax will be virtually impossible to implement, but actually what is the problem with some people being uber rich? I don't have a problem with that - why should I? It makes no sense - other than when filtered through an irrational sense of envy. The uber rich (most anyway) provide returns in ways other than through their personal tax bill. As an illustration, the job I have was not created by me but by someone richer than me. It is not MY job, but a job that I fill for a period of time. Someone else will fill that job after I have resigned or retired - a job created by an Elon Musk or a Steve Jobs.
And let us be clear - the ordinary Joe doesn't actually pay any income tax - it's all paid by his employer. Joe doesn't have to find the tax each month - the employer does. Elon Musk, if you like, has to find that money.
If I pay a higher % tax than the uber rich it's because I am not providing my fellow earthlings with value in any other form. I got paid for doing a job, completely risk free. If I decide one day to risk all my money to start a business or make an investment i do not expect to have to pay tax (in the form of CGT) at the same rate as someone taking no risk and drawing a salary.
The REAL answer to the tax problem is for governments not to be so profligate with the money we all, including the uber rich, already give them....
Could you please recommend economics/tax/investment books or articles that you think are usefully? You can do an introductory video on them if you have time? Going through your "The Joy of Tax".
Thank you in advance.
Gary Stevens new book is excellent. His channel on here is also good.
@@Redf322 Gary focuses on the big picture while I'm looking into the micro level and you seem to offer that. Hence, my request. Thank you for the reply.
@@Redf322 Probably I should have asked which book/s related to economics/business/etc made an impression on you or your students.
Perhaps Rachel Reeves will pleasantly surprise you by putting some of these ideas in her budget.
Your right to talk about efficacy of implementing tax.
But isn’t another stumbling block to policy and perhaps the biggest, the popular support of policy versus lobbying power against it?
Lobbying is where the wealthy influences actual policy.
Lobbying organisations can be setup as charities such as the iea. Don’t people get tax breaks for donations to charity? I suppose part of that answer is the better regulate that also?
What we really need is an honest non corruptable govt.
What is defined as rich?
Some think being on a salary of £100k makes you rich.
Normal people’s incomes are declared to the state and are taxed without a problem.
These rules should also apply to wealthy people.
Wealthy people do declare their income each year via a tax return. Why do you think otherwise?
@@kevinsyd2012
The whole video says we can’t do a wealth tax.
Didn't mention family offices. wow. That's literally the whole issue. The collapse we have seen in living standards and consumption and wages is either an unexplainable mystery, or it's the ever greater transfer of assets from ordinary people to family offices. I think it should be obvious which of those 2 options is correct.
Many have their wealth tied up in land. Tax land *values.* It cannot be taken offshore. Its location is known to the inch. The tax *cannot* be avoided. It should be implemented asap.
Georgism, sure, I'm all for it. You'll upset a lot of home owners though.
@@downshift4503
We have a problem few know we have. 50% or more of households own a residential property enjoying the *_unearned_* increases in land value, value they did *_not_* create. It is hard for them to actually see the broader picture of how the current system works against _them_ and their _offsprings._
@@downshift4503
The criticism of Land Value Tax is that it focuses only on land. The updated Georgist views of taxing economic rents includes finance, all monopolies and all common resources emanating from land. This is an aspect of Michael Hudson's work on debt.
@@johnburns4017 To me the problem is that people are forced to live somewhere. I've no issue with home equity in principle (ie being "unearned"), but something is required to push in the opposite direction. Houses are not productive assets, the latter of which could be priced to the moon but people aren't forced to buy or rent them. A form of Georgism would make owning land less attractive. Council housing is still necessary. Some people will not have jobs that reflects the cost of owning or renting their own building.
@@johnburns4017 I don't mean pure Georgism necessarily (eg replacing other taxes), but certainly for land / homes. All people require somewhere to live and shouldn't need to bid their lives away to secure that. The free market doesn't function well for homes. Again - it won't be popular now we've spent decades trying to convince everyone to own homes.
By focussing on productive companies, instead of the already wealthy, you are missing the point.
The problem is not just the concentration of savings into a few hands, but what they do with them.
Inevitably, money seeks the safest investments.
That means buying up assets, pricing them out of the hands of ordinary people, and destroying the general economy by rent seeking behaviour.
I can guarantee you, that not only are wealth taxes not coming too early…
They are probably already too late to avoid another Great Depression.
People undervalue the common good, until it’s all gone.
Regulation is made through/by governments. Billionaires bankroll politicians and political Parties, effectively controlling, safeguarding and protecting the very financial mechanisms that made them obscenely rich in the first place! Reform is not going to happen, things will get worse. The rich just need to keep the perceived societal balances within a certain range in order to carry on carrying on.
Still waiting Richard for why Civil service pension debts, like other state pension debts are off the books?
You're an accountant. Why are they not on the balance sheet?
Good question
@@Vroomfondle1066 The reason that Richard won't answer is becaue £16 trillion of debt is a disaster.
People would go after socialists for the mess.
They would go after the accountants.
=====
The state can create money to cover pension liabilities - whether that causes inflation
=====
MMT for you. So you print to pay. Prices double. What happens to teh £16 trillion debt? It's now £32 trillion.
Infllation linked debt doesn't work the same way as fixed rate debts.
@@Vroomfondle1066 So lets put the other angle on it.
If people had invested their NI, what would have happened?
For Mr Avearge, 1.2 million in a fund. 35K income, fund not touched.
So why don't we have a full audit, and everyone gets told what they have now, and what they could have had?
Transparency and openness.
@@tancreddehauteville764 , they are liabilities that become payable when the individuals retire
Liabilities are debts. Debts are liabilties. The reason is they are things that they owe.
The borrowing, just like the pensions and other debts/liabilties are only paid when the conditions in the law/contract say they are paid.
IFRS state that pensions are liabilities or debts. They appear on the balance sheet.
Why would the state hide its liabilities off the balance sheet? I know. I'm interested as to why you think they do it?
For example, gilts are a contract, civil service pensions a contract. Why omit one?
They aren't going to pay the pensions.
@@tancreddehauteville764 There's always a test. Cancel the civil service pension. They aren't owed, its not a debt.
Do you think that those with no pensions, will state they are owed a pension?
If we can change the laws about taxation, cant we change the laws aout thrusts and hiding wealth just as easily?
Unlike you, Professor Murphy, Gary Stevenson (YT "Gary's Economics") has actually gone out in the real world and *actually become wealthy* - is a *MASSIVE FAN* of a harsh, direct Wealth Tax.
But Richard, the issue is not just the rich companies. The issue is the small group of people who own the shares of the companies, the buildings, the infrastructure, the services, and so on. Let's not pretend these companies are not driven by the interests of the ultra rich. We have to hit the ultra rich, the companies are a consequence of the financial desires of the ultra rich. While we should absolutely stop subsidies and raise taxes on capital gains, if we don't tax the wealth the situation is not gonna change fast enough.
We don't tax wealth because it's easy, we tax wealth because it's necessary.
@@Vroomfondle1066 The two are not mutually exclusive. I absolutely agree that the capital gains taxation is needed to make investments less attractive. But the inequality is too big, we must correct it before we settle on "cruise speed"
Land value tax ?
Break up the monopolies and reintroduce real competition again. Go back to actual capitalism rather than pseudo feudalism.
It’s a long way back. A handful of companies own nearly everything .
Only in the private sector.
@@Vroomfondle1066
Publicly Owned Scottish Water awarded Best in the UK in the 2024 UK Annual Water Company Performance Survey.
Publicly Owned ScotRail recognised as a top employer in the UK in the 2024Top Employers Institute Certification Programme.
Publicly Owned Inverness Airport awarded 2023 best airport in Europe in under 2 million passengers category by the Airports Service Quality Awards
Publicly Owned Prestwick Airport is hosting the International Ayr Show next month.
Richard seems to have completely missed the accumulation of assets such as housing. Which once in the hands of the super rich rarely ever passes out of their hands.
See Piketty 2014 for the best research into this. I fear Richard is being contrary here simply because he fears the likes of Piketty and Stevenson who have become more in touch with the politics than he is.
the assumption is that all rich people are bastards who will do their best not to pay taxes
Are you not slightly confusing people by referring to Tax as revenue. I'm sure that is the technical term for it but that just perpetuates the myth that tax pays for stuff.
I agree that regulation would help with the things you say it does but seems to me that we need to stop the wealthy from buying up all the assets, thus generating even more wealth at the expense of everyone else. That in my mind needs to stop, either by regulation, or taxation or both!
Your 7.00 min towards low Capital Gains and NI avoidance have always annoyed me.
Why not both? Billionaires should be taxed out of existence
100% agree
Tax the public sector. Tax solves everything
Like Stamer and his personal tax avoidace law.
I think there is a lot that can be done before a wealth tax. As you argue and have argued before.
We already have a wealth tax- it is called inflation and targeted at 2% in the UK. Even better, it costs nothing to collect, and applies only to static wealth (invest in equities, and the underlying value of companies is not reduced by inflation). Try to do it by direct tax and a host of difficulties ensue- visibility, cost of liquidation (if you have to realize value in an asset to pay, you also pay capital gains tax- tax being taxed), illiquid assets (little old lady in big house).
Inheritance tax is a wealth tax too- and you can make a case for 100% on that (why is it fair that the chance of birth gives you wealth? You will probably already have benefited from a privileged upbringing)
Most fixed assets keep pace with inflation in value, like land and property values. So how is inflation a tax?
@@RogerRoving That was my point. You want to ensure money is working, and most fixed assets produce a return (land = rent). Only idle money suffers from inflation. A targeted wealth tax that is easy to collect and difficult to avoid. At the right rate, it is a 'boiling frogs' type of tax. What is not to like?
@@Tensquaremetreworkshop Money invested in capital is idle. The problem with the modern economy is overvalued capital assets. Meanwhile there is no such thing as an "easy to collect" wealth tax.
@@RogerRoving 1) Which part of 'capitalist society' do you not understand? A key measure of performance of any listed company (including property companies) is ROI - return on investment. Far from idle. It underlies the operation of our economy. The price of an asset should be its discounted present value. Errors in valuation, of course, exist- but the market exists to arbitrage this away.
2) Did you read? This was my point- inflation is very easy to collect. Controlling it has to be done anyway, so that is not a cost attributable to collection. Other methods have high friction and error- as well as disincentive.
In our tax systems, we do not count wealth until it is realized. You pay capital gains tax when you sell shares at a profit, not before. At what point do you wealth tax that money? Before the sale? After? If the latter, the tax base shrinks greatly. If the former, you would have to sell shares to pay the tax, causing CGT to apply- taxing the tax. The tax system is complex enough without this...
GROSS inequality-ee. The problem is not the 1% - Inequality - it's the 1% of the 1% - Gross Inequality - the 0.01%. And it's not just that it's bad, it's that it's accelerating; it's getting worse at an unimaginable rate. Every year, vastly more wealth is concentrated in fewer and fewer hands.
Even when someone comes up with a method of reversing the flow, making a dent will take thousands of years because the amounts of concentrated wealth are so great, and we are incapable of imagining what a billion is. If you were paid £1,000 a day, it would take less than 3 years to reach a million. To reach a billion would take 2,737 years. 34 life spans. You'd have to start saving 700 years before the birth of Jesus, the debt campaigner. "Forgive us our debts, as we forgive our debtors"
We are the 99.99%. Feudalism is history. Every billionaire is a policy failure: the cost of every billionaire is 1,000 millionaires
"We don't need a wealth tax because my small terrace house in west London that I bought on an average salary 40 years ago is now worth 1.2 million & I did absolutely nothing to increase its value".
The problem with inheritance tax is that only successful/lucky middle class families pay it. The very wealthy make sure they don't through various means.
I suppose it depends on what you consider "wealth". For me it is consumption and ownership of resources. I.e. things with universal value such as land and energy. All adults should get an allowance of these and have to pay additional tax if they want more than their fair share. The tax rate should rise exponentially once the threshold is crossed.
@@tancreddehauteville764 I don't disagree with you. It's just that the very wealthy (£10m+) can afford the services of professional tax dodgers, thus the lucky middle classes get hammered and the very wealthy avoid it, so massive inequality persists and gets even worse. Better to tax land and energy consumption above a threshold exponentially. Even tax lawyers can't change the laws of physics!
Yes, all very good in principle. But the reason the system is like it is, is because rich, powerful and influential people made it that way, and will not allow it to change anytime soon or you wouldnt have needed to make this video.
@@Vroomfondle1066 You think? It's all very clever, isn't it. The PR costs millions. The banks didnt want to be controlled by the EU so we left and a large part of the public thought they'd 'won', because that's what they were told.
th-cam.com/video/777XvUo-8eI/w-d-xo.html if they go the LLP route you will never pay tax. Considering that tax pays for nought and is merely a drain on any economy which has its place this could be a good thing.The privacy aspect is that no one ever knows who to tax
Would it not be simpler to tax all income from all/any sources (including “perks”, bonuses, shares, cars, homes, anything which is effectively income) aggregated together at the same level, and rising incrementally to well above 50% for extremely high incomes.
The “perks”, bonuses, shares, cars, homes as you call them are taxed and have been for decades. The value of these perks is included each year on a P11D form that is then considered by HMRC as income and taxed accordingly.
@@PhilipMatthewsPAEACP For sure we need a new system!
@@kevinsyd2012 Unearned income?
@@theotherandrew5540 unearned income is taxed as income in the usual way. The clue's in the name - income tax..!!
CGT is only taxed at the point of sale. I'm all for equalising the rates on CGT, IHT etc, but we need a wealth tax too. I agree that a wealth tax won't solve all societal problems, but that's not a reason not to do it.
If the wealth was created with the aid of Government legislation. Then Tax is justifiable. Which pretty much applies to all wealth denominated in currency.
It's practically built in anyway. Taxes are required in order for people to need the currency in the first place.
@@downshift4503 Yes. but not all wealth is measured in currency.
@@boptah7489 how are you going to assess its value then?
@@downshift4503 there is only one assessment of wealth. What is it worth to you ?
@@boptah7489 OK, so let's say I claim that I value my assets at £1, is the state going to accept a % of that as tax?
+1. Need gift tax and inheritance tax as well as CGT
There is already a gift tax and inheritance tax. Has been for decades.
@@kevinsyd2012 in the Uk yes. Point was all these taxes are needed to capture income transfers if there isn’t a wealth tax
Yes -- simplified taxation; broad, simple and low. The same rate for any sum earned regardless of source; it is immoral that the tax-payer who gains wealth by selling his labour pays a higher rate than the tax-payer who trades in assets. BUT -- in a supposed liberal democracy the idea that the state has unlimited redistributative authority is ludicrous. Nobody in the UK has authorised centralised ideology in the UK because they haven't been asked - because we don't have a constitution constraining our politicians - because Democracy has been standing still for a century. Big-State thinkers deciding what freedom they will allow others is just continuing authoritarian dystopia. In real democracies people don't spend time obsessing about relative wealth mainly because so much more is created -- see the Scandis or Switzerland who have only marginally more freedom.
Risking money by investing is a different to being paid to do a job. If CGT is equalised then there is little point in taking bigger risks.
@@downshift4503 - Why should your neighbour subsidise/encourage your risk taking? At a basic level we tax on wealth acrual. If we have different rates for different risks or behaviours then we need a million different rates to treat all fairly. Where is the evidence that different CGT/Income rates is beneficial to the community? This is just custom & habit and breaks the 'first law of democracy' - equality of treatment before the state.
@@andyinsuffolk They are not subsidising it. Taxes don't fund government spending. They act to drain the reserves of previous spending. The primary reason for tax is to force people to obtain money and for most this means needing a job. The government isn't going to provide all those jobs, so the private sector doe and needs to innovate in order to grow.
Consider how much of UK PLC is tech, next to nothing. It's a disaster in the UK. The US meanwhile has individual companies that are as similar in size to the UK entire stock markets, That's a loss for the UK in GDP, jobs etc.
The economy thrives on investment. If entrepreneurs have good ideas, who is going to invest in their risky ventures if CGT tax rates are high? Investors will shift to low risk because the risk / return ratio will suffer (risky ventures often fail which means permanent losses). If I can currently get 5% in a savings account for zero risk (paid for by the government), why would I bother taking risks to get a few % more only to hand over half of that to the government?
Everyone gains where investment means higher GDP. Higher GDP means that the government debt falls (as its true measure is Debt to GDP).
Where is the evidence that identical CGT / income tax rates is beneficial to the economy?
@@andyinsuffolk To add.... what I would like to see is more risk taking, not less. Instead of paying people risk free money, interest rates should be lowered to encourage investment. Instead of banks lending money on asset speculation (mortgages) the focus should be lending into productive ventures.
@@downshift4503 - Too many points to answer there.. but you are making the (very narrow) special interest argument. If employed tax-payer gets to keep as much of his income as the asset trader he will probably more quickly become an investor himself especially as the tax implication is the same! That might even represent greater investment capacity overall - or better risk taking - or ... You also demonstrate the problem of artificial thresholds how do we know that the numerical differential between CGT/IT is good, bad or indifferent? NO thresholds is the 'natural' basis.
Oh no!! "They" got to Richard! 😁 Just get a 99% inheritance tax for everything over say a million pounds. Regular tax below that.
Man, make your mind up.
Tax money not people.
already happens via inflation
@@Vroomfondle1066 I think typically inflation does help the poor, not always of course, its not perfect. Benefits, minimum wage, state pensions typically rise with inflation over time. That's not true when it comes to all assets. It certainly helps in terms of government "debt" as debt / GDP can diminish with inflation... therefore the government gets to reduce the national debt in real terms without doing anything at all. Debtors tend to do ok with inflation.
The answer is
#DemocraticSocialism
Where are the trillions the workers have paid the socialist welfare state for their old age?
@@stephfoxwell4620 So how big are the socialist welfare state's pension debts?
Lets get the problems out there.
How do the socialist pay the £16 trillion debt with no assets that they have created?
@@stephfoxwell4620 Good reply!
@@stephfoxwell4620 Socialism is just predation on a small number of people and the masses to enrich the socialist elite.
Some animals are more equal than others
@@stephfoxwell4620 The answer to that we already know from history: capitalism! Read professor Bas Van Bavel's 'The invisible hand'. Unless of course, Steph, you define progress as having as much poverty as possible, and a handful of ever richer robber barons? And no, poverty has not decreased under capitalism. Those are cherry picked figures, when looking at the full world wide picture, poverty has reached an all time high.
I don’t think you realise how confusing your videos can be when it sounds like you’re contradicting yourself 🤔
Wealth tax is not to bring billionaires into line...
It's to raise more revenue from people who can afford it.
I agree with you that it won't do what you say it will do... but i disagree that's the point of a wealth tax.
If you're a billionaire... you can afford to pay an extra X amount.
What effect will that have? It will put more money into the coffers of the uk so it can be spread out - or simply wasted as is being done right now with support for wars etc.
@@tancreddehauteville764
Although it's not really a response to my comment, I don't disagree with you.
Tax the assets, not the income.
@@tancreddehauteville764people register in other countries to avoid tax, you know that argument of 'if you tax the rich, they'll leave'? Let them leave, most of them have on paper, the assets are there still.
If you let the rich keep sucking up all the assets with their income from existing assets, they'll own it all.
Sounds reasonable. Or just create a massive bureaucracy of easily corruptible jobsworths whose job it is to hunt down and assess every bit of (offshore/overseas?) wealth of individuals. This would also be a job creation scheme getting unemployment right down. What could go wrong?🤣