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Many political activists have called for a wealth tax, but I find the concept beset with practical difficulties. I remember Dennis Healey, a British Labour chancellor of the exchequer in the 1970s, saying in an interview years later that he had wanted to introduce a wealth tax but couldn't find any practical way of implementing it.

Firstly, there is a problem with defining exactly what it is that I own. If I have money in a bank account, then I don't own it; it is legally the property of the bank and I am just a creditor of the bank. (If anyone reading this has just learned that for the first time, please feel free to say, "Holy bad!" as loudly as you like.) But I can hardly suppose that a government would allow that money in a bank account doesn't count towards one's wealth. The concept of ownership would have to be widened to include debts owing, but that itself is fraught with difficulties.

Secondly, there is a problem with valuing collectables, especially if they are illiquid. Who is to say what they are worth? What would be the procedure for valuing them, and for challenging that valuation?

Thirdly, there is a problem with promises of future receivables, such as pensions. Some people have expectations of pensions from other parties, such as employers, others have private pensions, others do not have pensions at all under that name, just investments or assets that they intend to draw down upon when they retire. I don't see any simple way to treat these on an even footing. I'm fairly sure that a public sector employee approaching retirement age would be very surprised to learn that their pension is worth £500,000 and this together with the value of their house would push them over a wealth tax threshold. I've no doubt they would want their pension pot exempted from the tax, but this just reinforces the difficulty in treating investments equitably.

Fourthly, there will inevitably be all kinds of exceptions that don't count towards the assessed value, and these would give rise to anomalies. No doubt it will also give rise to clever people devising schemes for managing assets in such a way as to exclude them from the assessment. If I set up a private company and transfer some of my assets into it, who is to say what the shares in the company are worth?

Fifthly, there is a problem in valuing assets, such as shares, when they are owned in large quantity by a single individual. Jeff Bezos is often described as having a net worth over $120 billion, because he owns nearly 80 million shares of Amazon at over $1500 each. But that is really a market cap, not a value. If he sold his shares the price would fall considerably and the total he would receive would be far less.

The above are only concerned with how the tax applies: there is also the issue of how it would be enforced. How can the government discover the silver coins that I have buried in my garden, or the timeshare I own in Greece? Or for that matter, what will happen when wealthy people just decide to leave and reside elsewhere?

Are there any examples of countries implementing an effective wealth tax?

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I am unsure about wealth tax in the UK PAYE Tax Brackets with National Insurance / Council Tax / Road Tax / Stamp Duty / Inheritance Tax / (have I missed any?) more than enough to ensure majority of people working till their later years in life.

image.png.7db78acbe734c296bf6d826dac5db5dc.png

It is about the elimination of tax havens and governments sharing financial data between each other to ensure that everyone (especially the rich and elite) is paying their fair share into society.

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But do the rich and elite pay their fair share into society? How many BBC people have accounts in Panama? Quite a few it turns out. If you are wealthy you can afford to pay 'experts' to ensure you pay the least amount of tax. It's the middle and middle to high income earners who tend to get slogged. 

Oh, and you forgot about probate going up in April depending on your estate.

The taxman has eyes everywhere. 

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All taxation is theft, and we already have a very progressive tax system in this country.  The fact is that the wealthy already pay far more than they ever did towards the public coffers.

As you grow older you will realise that they can NEVER collect enough revenue to fund everything activists and government want to fund. It is not the funding, it is the very notion of removing market price discovery that make public finances an unsustainable huge black hole.

I recommend that you do everything you can to shield your income from taxation. Defer it; max out your tax-advantaged accounts. Seriously consider if you want to pursue a  high-flying, high-stressing career just to pay 50p in the pound vs leading a simpler, easy-going life with a more modest income. F%$k 'em, your duty is to look after your own, not your neighbour.

Edited by vand

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Theft ? Sorry but that is bollocks. We pay taxes to have hospitals, police, teachers, social welfare, our rubbish collected, a military, subsidize the elderly with transportation and medicine (one day you too will be old and infirm), roads, bridges, etc..., the list goes on and on.

I agree that it is common sense to use legal means to avoid overpaying but it is responsible to pay the correct amount. It forms the basis of any caring society and is one of the concepts that puts us, as the British, in a separate class from the rest.

Edited by Oldun

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I agree with Oldun here.

All you have to do is look at the USA, piss poor healthcare for the poors, inmates rented out as slaves, schools were they actually teach creationism (facepalm), police forces stealing money from motorists, Townships using citizens as cash cows and failure to pay leads to jail (sorry forced labour camps).

We do need taxes but do we need ALL the taxes?

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It is by definition theft. It is stealing money giving people no choice in the matter. What it pays for is irrelevant. 

If we agree as a society that some theft is OK to pay for things, it arguably should be the lowest amount of theft possible to afford what benefits the majority. Schools, hospitals, roads. Fair enough.

The redistribution of wealth in the form of benefits is not justified in my view. Taking wealth from a worker to pay for someone who doesn't is just wrong.

The social contract for pensions is also not justified, being a pyramid scheme from which those who are not born are told that must pay taxes to pay for promises made to the old by someone else (normally the old). If we had coffers of wealth saved up communally then different story - but we don't. 

Each man to his own. Charity starts at home. Government should be small, but voters realised a few generations ago they could vote for politicians to pay them to do so through various benefits, pensions, ect. It is the nature of free for all democracy. 

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Hospitals, schools and roads can be built quite satisfactorily without taxation too (at least without the theft type). And the latter two actually cost very little, and can be paid for either privately or with charities.

Some reading:
http://calebjonesblog.com/how-taxes-would-work-in-a-free-society/
http://www.libertarianprepper.com/without-government-who-will-build-the-roads/

Edited by bluemoon

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6 hours ago, caloundracats said:

But do the rich and elite pay their fair share into society? How many BBC people have accounts in Panama? Quite a few it turns out. If you are wealthy you can afford to pay 'experts' to ensure you pay the least amount of tax. It's the middle and middle to high income earners who tend to get slogged. 

Well the top 1% earners pay about 27% of income tax, top 50% earners pay 90% (UK), so i reckon the rich and better off pay a fairer share.  Certainly more than the advocates of redistribution will acknowledge and admit.  

I dont mind tax per se, for law enforcement, education, healthcare, even some social support, and we pay plenty.  However wealth tax is too far, its simply born of envy, engineered to punish those who have accumulated wealth through effort or good fortune and already taxed at least once.  Its also destructive, to pay for the tax you'll likely need to divest some of the wealth, thus reducing its value.  But then thats part of the idea, to "share" the wealth even if there is less in total.  Imagine someone having to sell their business to pay the wealth tax, who is this going to help?  The only political activists who support wealth tax are socialist who want state ownership and control of everything. 

Edited by Martlet

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Yes, I agree Tax is used for all sorts of beneficial things for society as a whole. I was really referring to those who use ways to avoid paying their fair share, ways that are not open to alot of people, and in most peoples and often the tax authorities eyes, are illegal - and companies who find ways to operate in the UK but pay little tax - you all know who they are.

But wealth tax is something else as you state so well. A tax on a tax. Like inheritance tax - hence so many stately homes are looking for income to sustain buildings by opening up to the public, or handing their estates over to the National Trust - great for us plebs who get to visit. But would we like it if we had to do it ourselves to our homes? Many of these people were left these houses which the family had owned for generations and are now crippled by inheritance tax. But I guess that's another topic.

Sharing the wealth by way of taxation on wealth/business is often short-sighted. Some businesses go under - result in no tax paid and unemployed workers. That's a no win situation.

We are a 'nation of shop-keepers' and the multitude of small businesses keep a large proportion of the UK employed. To tax them out of existence is just plain mad.

I wonder why socialists don't see the ramifications of their thinking.

 

 

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11 hours ago, Abyss said:

I am unsure about wealth tax in the UK PAYE Tax Brackets with National Insurance / Council Tax / Road Tax / Stamp Duty / Inheritance Tax / (have I missed any?) more than enough to ensure majority of people working till their later years in life.

image.png.7db78acbe734c296bf6d826dac5db5dc.png

It is about the elimination of tax havens and governments sharing financial data between each other to ensure that everyone (especially the rich and elite) is paying their fair share into society.

Not sure where your graph is from, but I think it might be incorrect. 

Screenshot 2019-02-12 at 19.50.17.png

Source: https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past#tax-rates-and-bands

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2 hours ago, vand said:

I roll my eyes whenever anyone talks about "fair share"

To me 0% is the only truly fair share - the same marginal rate and the same absolute amount for everyone

Can you explain social programmes for clarification to everyone please ? Thanks :)

 

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Without taxes it would take approx 0.000004 of a second for the whole country to magically transform into Burnley.

I mean who wants to live in the barbarian lands?

Edited by bored

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10 hours ago, sovereignsteve said:

so are you advocating a totally tax free country?

Defence of the realm and policing of law is governments primary role. Some form of tax is needed for that. That's about it though.

Everything else being paid for by the state today can be provided by a market. It would not be evenly distributed, but it isn't when the state is involved either so it's a choice between perceptions of 'fair'. Sweat of a man's brow to keep. Or to be taken and shared. That's it.

Second issue is inequality is directly linked to crime and corruption. Government intervention and redistribution has done nothing to curtail this in the UK, arguably policy has made inequality worse. Two separate problems there that government does a bad job at solving through taxation. 

Which evil do we want. Low tax and more market, or high tax and less market. 

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11 hours ago, Oldun said:

Can you explain social programmes for clarification to everyone please ? Thanks :)

 

Anything that isn't enforcement of the rule of law, or defence of the realm (as KDave eloquently puts it).

So that leaves everything else for chopping

Social services

Healthcare

Education

Transport

and so on.

All these can and will be provided at more attractive cost and at a better quality by the private sector.

11 hours ago, sovereignsteve said:

so are you advocating a totally tax free country?

As close to this as possible, as previously stated provided law and defence are funded which will obviously cost something.

Does this sound so far out there? For most of its history the US didn't have any federal income tax, and even today there are countries that have no income tax and those are the countries that are undergoing the most dramatic changes in their development (in a good way).

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Yes, for me, that is really far out there. Private pharmaceutical companies have already too much influence to extend patents for their products to make sure that generic medicine cannot be produced by other companies thereby gouging the customer, for example.

Private bus companies only compete on profitable routes and that leaves communities with expensive or no services.

All schools go private ? That is sheer madness. Companies already stuff our kids with processed food and massive advertising....how do poor kids’ parents pay for their education ? It would cause untold damage to the country and end up costing the country more in terms of productivity, health costs and god knows what else.

I am afraid it is not the utopia you think it is when it boils down to reality for people.

Edited by Oldun

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43 minutes ago, vand said:

.....even today there are countries that have no income tax and those are the countries that are undergoing the most dramatic changes in their development (in a good way).

Can you please list them along with the benefits please ? :)

Edited by Oldun

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  • United Arab Emirates
  • Oman
  • Bahrain
  • Qatar
  • Saudi Arabia
  • Kuwait
  • Bermuda
  • Cayman Islands
  • The Bahamas
  • Brunei

Deserts, no human rights, and island tax havens (that produce nothing and exist BECAUSE of taxes being paid elsewhere).....hardly good examples......

Edited by Oldun

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