Of course, we could do something revolutionary and tax wealth rather than focusing on income all the time. This is about as likely, or probably even less likely than thm's prediction wrt. flat rates of income tax.
Tax wealth? What's that mean?
@olddog - we'd get slammed by our trading partners (US, Europe etc) as every business stampeding to come to the UK would be leaving somewhere. Interesting the takeover bids we are seeing currently in the press are tax driven, its US companies trying to come to Europe (Ireland really) via the UK. The US politicians are wise to this and have declared war on these deals and are changing their laws as we speak to prevent them.
@molgrips I agree its not easy but Apple has $200 billion of revenue (profits really) offshore from sales of kit around the world. There has to be a better way. The tax need only be 2-3%. As you know I don't believe the "tax the rich (ie someone else)" strategy is going to make a difference, its just motivated by jealousy / misplaced sense of fairness.
@deadlarcy - show me a country with a wealth tax only, there aren't any. Switzerland has a wealth tax, its something like 0.25% and its only payable if you pay no other tax. They have lots of other taxes too. There is no way we could raise enough wealth tax to offset other taxes. We could have a wealth tax but first we should abolish non-dom status, why give foreigners a tax break over citizens ?
By the way I assume the wealth tax wouldn't apply to you, just these other "rich" people ? Yes/No ?
Most wealth (for regular people as opposed to the ultra rich) held in the UK is in property. So you charge capital gains tax on personal dwelling for increase in value over, say the rate of growth in the economy. Basically you make the link between property value and council tax much more sophisticated - then whack up the rate.
There are three advantages - 1. One of the biggest sources of unearned wealth would be taxed. 2. It would hold down house prices. 3. You could get rid of inheritance tax as you would have paid tax on the increased value over time.
The downside is that no British politician in his right mind would suggest this as it would be electoral suicide.
Tax wealth? What's that mean?
Do you know what tax is?
Do you know what wealth is ?
How about daft and question
or downhill cycling
What is the point of doing this?
By the way I assume the wealth tax wouldn't apply to you, just these other "rich" people ? Yes/No ?
Why do you even ask when you've already assumed you know the answer? I might be sat on millions - only you wouldn't know about it, as I'd already have it squirrelled away somewhere where nobody will tell you about it. 🙂
Do you know what tax is?
Do you know what wealth is ?
Your question is the daft one. Proposing a wealth tax raises a lot of questions about the details of said tax. Is it based on capital assets? Liquid? Is it payable yearly? On the contents of your bank account or just the delta? Etc etc.
I don't know how wealth tax works normally, which is why I asked.
So you charge capital gains tax on personal dwelling for increase in value over, say the rate of growth in the economy.
What? So if other people decide they want my house, I have to stump up cash? That's hardly fair.
Your question is the daft one
What do you mean by daft one 🙄
PS You quoted two questions
You sell your house and from the capital gained you pay tax.
You are struggling more than usual.
Moving house would be even more expensive than it is now, so many would do anything not to.
It always amuses me when people rant on about vodaphone [sic] not paying the "fair" amount of tax.
Most of the people most willing to offer their views on Vodafone's tax arrangements have no idea how transfer pricing works, no understanding of how much revenue Vodafone generates overseas or any grasp of actually how challenging it is running operations in more than one country with the huge tax issues that arise as a result when that income gets repatriated - let alone what the original dispute between HMRC and Vodafone was about.
And the thing that amuses me most when people slate Vodafone - this year the company will pay a special £84B dividend equivalent to 1/3 of all income tax for the year - all of which will be going into the pockets of pension schemes and individual investors, and much of which will be spent on the high street in Britain.
...sorry I wasn't clear. It's more like super council tax than capital gains ie you would pay it annually - so there would be not sales tax element to it. You could probably get rid of stamp duty too for that matter.
btw I never going to be in charge of UK tax policy so you need to be worried that my ideas are half-arsed!
France has a wealth tax called ISF. There are also a lot of French super-rich living in Belgium and Switzerland to avoid paying tax in France.
One of the problems with the EU is unfair competition between countries to attract rich people and companies. Ireland with its very low corporation tax, Holland with its artists tax that attracts musicians such as Angus, and of course that fiscal/financial rogue state in the middle of Schengen - Switzerland.
You sell your house and from the capital gained you pay tax.
That's capital gains tax. Not wealth tax..? Are you saying they're the same?
I am never ever going to do this with you ever.
Hopefully those words were clear enough
No idea what you're on about. I'm not trolling, I just don't know what's being proposed. Do other countries do this?
Income = what you earn
Wealth = what you own or in fact the net value of assets over liabilities. For most people that is pretty much Property less mortgage. Cars etc don't really count in this context as they depreciate rather than appreciate.
Wealth tax is a tax on the value of what you own not what you earn. Inheritance tax is a wealth tax. In a sense council tax is a wealth tax as it is loosely based on property values.
It has nothing to do with only taxing rich people anymore than income tax.
Wealth tax is a tax on the value of what you own not what you earn.
So you get a monthly bill according to the value of your house? If you save money you have to pay a tax on what's there, even if you've already paid income tax on it?
I'm not doing this very well try...
http://en.wikipedia.org/wiki/Wealth_tax
The only way I could see it working in the UK is that you would get taxed on increased value of the asset. This already happens with savings - tax on interest. With non residential assets you pay capital gains.
So the tax would be on the increased value in your property less debt. The only way I could see it working is like I said - super council tax that rises at the rate of house price inflation (or something.
The idea is to capture the unearned and untaxed part of growth in house prices - it's a tax of redistribution - stops the concentration of wealth from house price inflation.
BTW it wasn't me who first suggested it. My idea was to legalise and tax dope.
A fairly easy change would simply be to increase the number of council tax bands all the way up to the top house prices rather than stop at the low level they do now.
Wealth tax is normally a tiny proportion of total tax. You can basically tax three way
1. Holdings of wealth - eg, an annual charge on a house
2. Transfers of wealth - eg, inheritance tax
3. Appreciation of wealth - eg capital gains tax
None are easy to manage. DIsclosure remains a challenge as does accurately valuing assets. Given that we can't do it with incomes properly, the chances of doing it well with wealth seem pretty slim.
Still nice headline grabber for uncle Vince.
Inheritance tax should be scrapped.
Council tax is idiotic as it is based on house prices 25 years ago.
I don't agree with inheritance tax as I think they have already been taxed so should not be taxed again. Even if the wealth is transferred to another person, the other person who received it should be free to enjoy them totally.
Or ya council tax is just jobworth pay. Get rid of that and out source all the work (with exception of some admin works) of the council.
Tax should be simple:
Income tax.
Business/corporate tax
Import tax
VAT at very minimum.
There you go. Get rid of the rest.
@olddog I cannot think of a country which charges capital gains tax on your primary residence. Also you seem to be suggesting an annual tax based in house price increase, who decides that value ? Currently 68% of Britons own their own home so this new tax would be paid by the vast majority and you state that it would have the side effect of holding down house prices, so making 68% of the country less well off. Electoral suicide as you say.
Stamp duty now raises something like £14bn pa, this is more than from petrol/diesel (£12bn) which is incredible when you think something like 70% of the cost of fuel is tax/duty. Property in the UK is heavily taxed upon purchase.
In Switzerland wealth tax is generally charged on the absolute value (so not gain) of assets excluding property. Property is seperately taxed via annual tax and purchase tax (stamp duty fixed at 2% independent of value). Note annual property tax is offset against wealth tax. More complicated again as tax varies by Canton. The introduction of wealth tax on property is France has had a really bad impact on farmers who face large bills they cannot pay without selling land. A farmer appears asset rich but is cash flow poor so doesn't have the income to pay the tax. Same is true of the winemakers.
@doctor - it doesn't matter that the council tax bands where created 20 years ago as the actual rate payable is reset each year so is current.
@chew even if you outsourced everything the council did you'd still need to pay for those services so you need a tax/charge
Agreed lets scrap inheritance tax, double taxation and robbery.
jambalaya - Member
@chew even if you outsourced everything the council did you'd still need to pay for those services so you need a tax/charge
Yes, you pay charges but should be very minimum say £5/month when the house is occupied.
🙄
@mudshark council tax was designed to be fundamentally different than the old rates in that you pay for services used not property value, hence the bands stop before top values. We tax value with stamp duty, 7% on £2m so that's £140,000. That's a lot of tax. By the way the French tax about 8% on property even the "average home" I cannot imagine the stw outrage if people had to pay 8% on their £200k house like the French do plus all the income taxes as @ Edukator noted.
@chew - those numbers don't add up. I'm not in favour of the wastage and inefficiencies of the local councils but the tax covers the police, schools, etc. There is no way that's £5/month
jambalaya - Member@chew - those numbers don't add up. I'm not in favour of the wastage and inefficiencies of the local councils but the tax covers the police, schools, etc. There is no way that's £5/month
Oh yes it will work.
Ok, you may even double to £10/month if you wish but still better than the present crazy rate, and I ain't paying jobworth to make my life difficult.
😆
Nope. Not until we stop sending some of what I pay abroad. Not until tax is fair i.e. one rate for all. Not until it penalises greed and modern selfish desires by which I mean double the VAT on luxury items, eg almost everything electrical.
Not until it reflects cost of living ie fuel for rural users is cheaper than that for urban users who do less miles to live. Not until I, as a employed, married but no kids, just making enough to pay the bills, man pay the same % as a family of 6 on benefits, especially those with a stack of cars and luxury goods.
We deffo pay too much tax!
VAT @ 20%; - why not 15% like it was pre 1992?
Income tax @40% + NIC (9%?) on <£50,000 - you try bringing up a family on that in London.
Beer duty - way too high;
Employers' NIC - purely a tax on employing people - WTF?
The whole cost of living crisis is caused as much by too much tax as too little income. Ironically reducing many of these tax rates would reduce avoidance and evasion.
there is plenty of public spending to cut - just wait. Sorry, but its going to happen.
And wealth taxes are totally unfair as they are a tax on taxed income.
Stamp duty is another shocker.
Insurance Premium Tax - sod off!
Flight tax (or whatever its called) - why?
council tax was designed to be fundamentally different than the old rates in that you pay for services used not property value, hence the bands stop before top values. We tax value with stamp duty, 7% on £2m so that's £140,000
Yeah but the bands have a pretty loose correlation with the costs of services used - if any really. That was what the pole tax was meant to correct. I just think that if the more expensive houses paid more then those in the cheaper ones would pay less - if total expenditure stayed consistent. As stamp duty is only paid on purchases only those that move have to pay it and if you've stayed in a house for several decades you may have one that you paid no stamp duty on but is now worth enough to pay one of the top rates. This seems wrong to me.
Simplest tax would be to just have VAT, hard to avoid that. To help the poorer need different bands - basic stuff no tax, most stuff normal and yachts, Hi-Fi and flat screen TVs get the premium rates.
@@hh45 - thank you for bringing a smile to my face this Tuesday morning, most excellent rant.
@molgrips - yes indeed a wealth tax is a tax on earned income already taxed, like VAT or stamp duty
double the VAT on luxury items, eg almost everything electrical.
@matt - like a washing machine, a kettle, a light bulb ? I think that's a bit extreme. It's also quite clear a mountain bike is a luxury item or indeed any sporting goods based on your definition.
Unless we're saving or spending overseas then as far as I can see they get ALL of our money in tax eventually anyway. Why make the initial percentage so high on VAT and salaries?
I wouldn't mind at all.
Simplest tax would be to just have VAT, hard to avoid that. To help the poorer need different bands - basic stuff no tax, most stuff normal and yachts, Hi-Fi and flat screen TVs get the premium rates.
Purely for the sake of argument, how would that affect tourism and manufacturing?
Let's assume VAT on everyday goods is something obscene like 50%. It's great because everyone in the country contributes every time they buy anything. but this includes tourists - fair game, you may argue - but would they still come here if a cup of coffee is £5? And a cheap t-shirt is £30?
Similarly, what happens to manufacturing? I do try and buy British (or European) where I believe the product is as good as or better than something designed elsewhere. But how would a small British company making expensive, unique products survive when all of a sudden it's already expensive items have another 30% tax added? Will they still sell because everyone has more income, or will people source something similar - if inferior - from outside the UK?
Finally, if people are sourcing from outside the UK and being stung on their transaction by the bank for VAT (as they should be, being in the UK), would this not mean that people decide to up-sticks and go where the products they want are cheaper?
Surely - ultimately - more taxes = better public services?
I don't need better public services, I need more money.
how would that affect tourism
Can't tourists claim back VAT anyway? Might be wrong.
manufacturing
If source from outside UK still need to pay VAT right? Outside EU anyway.
would this not mean that people decide to up-sticks and go where the products they want are cheaper
Then they'd have other taxes to pay.
But yeah, taxation can never be considered in isolation. In this global age we need a global approach.
I don't need better public services, I need more money.
You'll get neither.
Surely - ultimately - more taxes = better public services?
no it'd mean more benefits/pay and conditions for council workers in management/higher grades. Plus there'd be more levels of management.
I'd prefer contractors to leave public sector companies- no more £600-£1,000 a day specialists* in public/government departments and tax avoidance schemes made criminal. We'd be awash in money if waste and avoidance was targeted.
*Ironically these specialists can claim travel costs to an office, lunch, running a car etc offset any tax. Whereas we PAYE dont get our travel to work or lunch paid for out of tax........
I assure you I won't get less. 😀
I don't need better public services, I need more money.
Nobody thinks they benefit from public services, especially corporations, but of course they are quite happy to drive and send trucks along public roads, report crimes to the police receive education or employ educated people, call the emergency services when shit goes wrong etc etc etc.
They don't need public services, apart from when they do, which is pretty much all the time. Public services are provided to us all the time, it is just the greedy and ignorant who want to pretend they don't benefit from them and don't want to pay for them.
no it'd mean more benefits/pay and conditions for council workers in management/higher grades. Plus there'd be more levels of management.
The public sector is no worse for bureaucracy and waste than the private sector, there is just more greed and ignorance in the private sector.
MSP - MemberNobody thinks they benefit from public services, especially corporations, but of course they are quite happy to drive and send trucks along public roads, report crimes to the police receive education or employ educated people, call the emergency services when shit goes wrong etc etc etc.
They don't need public services, apart from when they do, which is pretty much all the time. Public services are provided to us all the time, it is just the greedy and ignorant who want to pretend they don't benefit from them and don't want to pay for them.
I didn't say I didn't need public services, I said I didn't need to spend more on better public services.
I do, however need more money.
If I had lots of money then I would pay more for better public services.
I assure you I won't get less.
Well I'm sure that all those services you will require in the future will suck up any "savings" you make.
