We can copy good ideas without paying to be in a club that despises us.
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Just as when the dot.com bubble burst, as well and the sub-prime issues with the fall of Fannie May and Freddy Mac.
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What rate do you set the tax threshold is the problem.
Traditionally it was a tithe or 10%
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Remember, the top 0.5 to 1% of the eligible tax paying population contribute 30%+ of the income tax take and 30% pay no tax at all.
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No income tax. Everyone pays VAT, fuel duty, āsinā taxes etc.
Depends on how much you sin? VAT on domestic fuel is iniquitous, as we all need heat and light in whatever form to actually live a life.
Iāve not commented on this thread properly yet, but one thing Iāll say is I support taxing the super rich more.
And Iām not talking about the top 1%. To be in the top 1% you need to be on about Ā£160k a year. Iām talking about those in the top 0.1%. Those earning 7 figures and more a year.
The thing that is getting worse and worse though is the amount earnt by the top 1% compared to the other 99%. In the 80s the top 1% of earners represented about 7% of total national income. Itās now more like 14%.
That income inequality is unsustainable. The financial crisis did level it off a bit though.
We need to look to reduce the tax burden for those lower earners. Increase the personal allowance and increase the basic rate, higher rate and additional rate. But then we need to consider either increasing the % at the additional rate band, or, better, add a new, higher band.
We also need to change the way asset movement is taxed. In an ideal world, there should be no stamp duty when someone is buying a new home that they will live in as their only home. But for second, third etc it should be increased. Likewise with IHT. Increase the threshold, but look to increase the rates on the new, higher threshold. But at the same time, stop the current ways the ultra wealthy get around paying it at all.
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The so-called super rich have both mobility and very good accountants.
If, as Reeves is likely to do and not increase tax thresholds, more people including pensioners are drawn into tax with any increase in pensions. People who are earning more than, for Instance Ā£160k+ may just opt to work less rather than pay more tax in a higher bracket. A friend who is an ANP will not do overtime as she moves up into the next tax bracket.
What was the population then compared to now?
many people inherit a property on parents death as I did and on selling it would have been liable for CGT, simple remedy, sold my house moved into hers, declared it my primary residence and paid no CGT at all and doubled my initial outlay for me, all perfectly legal.
Stop one route and another opens up.
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Yes, the failure to adjust the bands is throttling us, I paid Ā£1500 in income tax alone this month, my total deductions were in excess of Ā£2500.
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I think taxation has to increase (as much as I hate the idea) and it needs to be across the board to a degree - everyone needs to feel it but levels have to be appropriate.
However, at the end of the day spending has to go down and no Govt likes to be seen to take things away (see Welfare debacle this year).
I agree with the ST Clarkson article a couple of weeks ago where he came to the conclusion that the NHS is beyond saving (being hyper exagrated as usual!). When it was introduced it gave out bandages and asprin - now its service portfolio is bigger than can be imagined, everything has increased in price well above inflation, drugs bill is eyewatering etc. Can we really afford it?
Likewise with Welfare? Yes I do not want to go back to Victorian scenes of dead babies in gutters etc but can we really afford the system we have
I am sure a large % of MPs really do recognise this - but to actually voice this is to get them voted out ASAP if against someone who promises to keep it all in place.
Unfortunately, for any Govt to fix any of this they need a sizeable majority and the set of steel sphericals to force it through despite the howls of pain and anger that it will generate.
And once we get the deficit back to āmanageable levelsā or preferably gone then we can start again but with systems designed for the times and not 70 years old and constantly tinkered with until noone nows how they ever worked in the first place
Kevlar on
Demographics
Aging population, falling birthrate.
Rising expectations of what the state can do.
Low productivity and a reliance on low-wage jobs.
The first 3 common across the west. The last two are certainly areas where the UK could do better. A lot better.
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Assets donāt move.
If they sell them, then tax is being paid and a new owner has them.
To stop spiraling wealth inequality (which is rising fastest between the very rich and the super rich), taxing wealth is necessary.
People make more in their sleep than we normal folk make in a lifetime. Itās obscene and a lie that you could ever be that rich.
Meanwhile, the only thing left to spend that spiralling wealth on is all the stuff we might traditionally collect as a middle class asset (eg a house), but now canāt affordā¦
Roman Abramowich was a great example. Couldnāt take that football club with him, could he?
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I can 100% guarantee that the āsuper-richā are just leaving the country to the Channel Islands, Portugal, Switzerland, then playing their 90 (?) days a year theyāre allowed in the UK. Theyāre avoiding Rachel from accounts upcoming plans. Many assets are held in trust outside of the UK.
Itās a shame, I was having dinner earlier this week with one of my clients who is doing exactly this, and he would much rather stay in the UK and spend his money here, but instead heās spending it abroad.
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Canāt afford houses due to unfettered immigration plus more people living alone, and low house building rates, finite resource, infinite demand.
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Whilst there me a link to your point I think part of that is due to too many consortiums buying houses to turn into HMO & rent out as slum accommodation.
Builders are also causing the issue with delay in building due to house prices not being high enough & new builds having too many strings such as āestate charges through resident associationsā
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The problem is that the rest of us basically spend all our money here.
The richer you get, the less you spend in a meaningful way. You end up investing the rest of it. And investing gets talked about as this essential entrepreneurial spirit that provides opportunity, but itās hardly all like that. Much of it is just buying stuff that other people need, except the price keeps going up because there isnāt enough of it and these people have more money than they know what to do with it.
We canāt afford to have so many billionaires and multimillionaires buying up all the assets. The rest of us literally canāt afford it.
And then, because we tax income, weāre not making money on all those assets! We already canāt trust people with the means not to hide it all overseas or dodge taxes the rest of us have to pay with trusts.
We need a fair system that prevents the kind of runaway wealth that negatively affects the rest of us.
In board game terms: thereās no ācatch-up mechanicā
We all look at Russia and think āoligarchy badā, then look at the UK and forget all about it.
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The quite I have seen is % of adults but gives no detail of what that adult is. nearly 20% of the UK population is retired which as a parentage of adults would be higher. Most of them will not be paying income tax.
It could be worse, Look what is happening in France when they try and cut their welfare state costs. They cannot even form a stable government.
And no corresponding rises in government revenue (taxes) to pay for it.
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