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Wealth tax academic paper

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NeilW
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Re: Wealth tax academic paper

#373084

Postby NeilW » January 4th, 2021, 4:50 pm

dealtn wrote:
How do currency prices go down?

Sorry yes I must have got it wrong, they are fixed and stable and haven't moved for years as any FX graph will show me. Apologies.


Excluded middle arguments are beneath you.

It's not that currencies move, its that they don't go all the way to the bottom - which is what you were trying to imply. And they don't do that because it gets stopped by somebody who needs them to go the other way. As we saw for years every time the JPY got into nosebleed territory against the USD.

Exporters have to export.

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Re: Wealth tax academic paper

#373092

Postby dealtn » January 4th, 2021, 5:05 pm

NeilW wrote:
dealtn wrote:
How do currency prices go down?

Sorry yes I must have got it wrong, they are fixed and stable and haven't moved for years as any FX graph will show me. Apologies.


Excluded middle arguments are beneath you.

It's not that currencies move, its that they don't go all the way to the bottom - which is what you were trying to imply. And they don't do that because it gets stopped by somebody who needs them to go the other way. As we saw for years every time the JPY got into nosebleed territory against the USD.

Exporters have to export.


So we now go agree, so that "fixed £ wealth" could go down 10%? 20%? 50%? over time if enough people were sufficiently unimpressed with a (wealth) tax regime (or for other reasons) when measured in some other form, despite the £ nominal value of £s in the system remain the same.

NeilW
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Re: Wealth tax academic paper

#373103

Postby NeilW » January 4th, 2021, 5:40 pm

dealtn wrote:So we now go agree, so that "fixed £ wealth" could go down 10%? 20%? 50%? over time if enough people were sufficiently unimpressed with a (wealth) tax regime (or for other reasons) when measured in some other form, despite the £ nominal value of £s in the system remain the same.


It isn't fixed. It is always relative. You can always shift to a net exporting nation to make it look like an import nation is "losing value". Right up to the point where that nation has an economic collapse due to lack of exports. Then you realise you're living in a monetary illusion.

The pound slumped to a 31 year low after the Brexit vote according to some reports. Yet the terms of trade went up. And ultimately nobody really noticed.

It's rather more complicated than the simplistic model you have in mind.

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Re: Wealth tax academic paper

#373107

Postby dealtn » January 4th, 2021, 5:56 pm

NeilW wrote:
dealtn wrote:So we now go agree, so that "fixed £ wealth" could go down 10%? 20%? 50%? over time if enough people were sufficiently unimpressed with a (wealth) tax regime (or for other reasons) when measured in some other form, despite the £ nominal value of £s in the system remain the same.


It isn't fixed. It is always relative. You can always shift to a net exporting nation to make it look like an import nation is "losing value". Right up to the point where that nation has an economic collapse due to lack of exports. Then you realise you're living in a monetary illusion.

The pound slumped to a 31 year low after the Brexit vote according to some reports. Yet the terms of trade went up. And ultimately nobody really noticed.

It's rather more complicated than the simplistic model you have in mind.


I got my first economics qualification 36 years ago, then another from the country's top university, and my final one from the country's leading business school.

25 years in the City and time spent starting and running businesses. I only sit on one Company Board now. But in general I am happy with the rather complicated model I use. I only revert to simplifications to make graspable points depending on the audience.

What is simple here is that a wealth tax (and other things) can damage the tax base leading to a relative decline in a country's wealth. That decline makes it harder to maintain that tax raising regime going forward. So much so that that a tax "increase" can actually over time become a "decrease".

(And that can all happen without a change in the number of £s in circulation).

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Re: Wealth tax academic paper

#373114

Postby NeilW » January 4th, 2021, 6:18 pm

dealtn wrote:I got my first economics qualification 36 years ago,


That's probably your problem then. And it's an appeal to authority - which holds no more weight than the previous attempt at an excluded middle.

Claimed credentials do not bolster an argument that holds no water.

What is simple here is that a wealth tax (and other things) can damage the tax base leading to a relative decline in a country's wealth. That decline makes it harder to maintain that tax raising regime going forward. So much so that that a tax "increase" can actually over time become a "decrease".


It can't because the accounting doesn't allow that. Nor does it cause a decline in a country's wealth because that is the stuff and people that physically stays here. Particularly the people that do the actual work.

A wealth tax does nothing more than reduce some numbers on an aggregate balance sheet. Completely pointlessly as I keep saying. However since those numbers are in Sterling, the UK government can reduce them if they see fit. Based upon whatever crazy calculation scheme they fancy.

It will neither increase, nor decrease their fiscal capacity.

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Re: Wealth tax academic paper

#373122

Postby dealtn » January 4th, 2021, 6:49 pm

NeilW wrote:
dealtn wrote:I got my first economics qualification 36 years ago,


That's probably your problem then. And it's an appeal to authority - which holds no more weight than the previous attempt at an excluded middle.

Claimed credentials do not bolster an argument that holds no water.

What is simple here is that a wealth tax (and other things) can damage the tax base leading to a relative decline in a country's wealth. That decline makes it harder to maintain that tax raising regime going forward. So much so that that a tax "increase" can actually over time become a "decrease".


It can't because the accounting doesn't allow that. Nor does it cause a decline in a country's wealth because that is the stuff and people that physically stays here. Particularly the people that do the actual work.

A wealth tax does nothing more than reduce some numbers on an aggregate balance sheet. Completely pointlessly as I keep saying. However since those numbers are in Sterling, the UK government can reduce them if they see fit. Based upon whatever crazy calculation scheme they fancy.

It will neither increase, nor decrease their fiscal capacity.


But people can (and do) leave, just as they arrive. The same is true of Capital.

Ultimately what makes up the wealth is Capital, Labour, and Technology progress (how those components can be combined). If Capital And Labour leave then what is left is not as much as before. It can be the same as measured in £s, they don't leave the system, it can remain as accounting balanced as you like, but in a measurement of wealth it will decline.

All the accounting does is allow the continuous matching of assets and liabilities in the units they are measured in. £s in this case. But If £=$2 or $1.5 or $1 you will have different measures of externally measured wealth.

So let's say we as a country, or government, occasionally source goods from elsewhere. Such as Defence, or Oil, or Pfizer vaccinations we need to pay for them in non-£. We can sell £s to others that are happy to buy them - buyers of our exports perhaps. But if $2 isn't the correct rate and the exchange goes to $1 each Pfizer jab is now costing us twice as much. No change in the number of £s. If we were previously selling 1 bottle of Whisky to buy a Covid jab we now have to sell 2.

We can try and become more competitive, pay our whisky workers less, make them work harder etc. But what if they decide they would rather work somewhere else, say USA. They can sell their assets, turn to $s and move to Texas, finding someone to buy their £s in the process (so that none disappear), but £1 might now only be $0.9999.

Eventually you could have 80% of the population that existed, say 10 years before. GDP per head could even be the same, but you will have a smaller economy, and if its the more productive Labour (and Capital) that goes GDP per head will fall too.

But that's ok if all you are concerned about is ensuring the same number of £s exist at all times, and that every asset has an associated liability to match with presumably.

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Re: Wealth tax academic paper

#373127

Postby scrumpyjack » January 4th, 2021, 6:57 pm

A lot simpler for HMG just to write off the debt it owes to itself, and that is quite a big number, and neither the creditor nor the debtor will be upset!

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Re: Wealth tax academic paper

#373143

Postby johnhemming » January 4th, 2021, 7:53 pm

scrumpyjack wrote:A lot simpler for HMG just to write off the debt it owes to itself, and that is quite a big number, and neither the creditor nor the debtor will be upset!

If it is left as it is then there are circular book entries for interest that go on for ever. There is an argument for the ability to reduce M0 through the sale of the debt to the market by the Bank of England.

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Re: Wealth tax academic paper

#376390

Postby Moosehoosenew » January 12th, 2021, 10:06 pm

This is a great discussion

I would be ok with the wealth tax, not sure what the base figure would be. I feel those of us over 55 have done well and if we are wealthy we can afford it.

If we are very wealthy, IHT is going to duff us up anyway.

In fact I would go so far as to see, our public services are a reflection on an obsession with low tax.


But

if we go too far, capital will move.

and we will never get the the super wealthy this way, to get them put super tax on purchases above a million?

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Re: Wealth tax academic paper

#376396

Postby Lootman » January 12th, 2021, 10:26 pm

Moosehoosenew wrote:I feel those of us over 55 have done well and if we are wealthy we can afford it.

The fact that someone can afford to pay more tax is not a reason to tax them more. Unless of course you just think they should be punished for being successful.

Moosehoosenew wrote:If we are very wealthy, IHT is going to duff us up anyway.

Only for those who do not take simple steps to avoid IHT, of which there are many.

Moosehoosenew wrote:In fact I would go so far as to see, our public services are a reflection on an obsession with low tax.

The voters can decide how obsessed they are with taxes not being punitive. And those same voters can decide if they want limits on the public teat.

Moosehoosenew wrote:we will never get the the super wealthy this way, to get them put super tax on purchases above a million?

How hard do you think it is for the global super-wealthy to avoid spending a million in the UK when every other nation wants that money?

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Re: Wealth tax academic paper

#376407

Postby Moosehoosenew » January 12th, 2021, 11:00 pm

I was not thinking of us being punished, more that we have done ok and can contribute a bit more

Our taxes versus Northern Europe are very low and in my opinion our public services reflect this

regarding movement of wealth, the super wealthy do move it.

I am not super wealthy but ok thanks, and if I have to say put on £200k next year, happy to do it.

and in regard to IHT if you are remotely wealthy, you will do really well to avoid IHT, I certainly do not think I can avoid it, in spite of sharing with family and others.

I do though would want public sector pensions to be valued correctly to ensure those that have large ones pay their share. Private company pensions are I believe being bought out at huge multiples.

So I imagine a policeman on say 25k index linked, has a poy that should be valued at least a million.

I cannot see how we do not need to ask the wealthy to share a bit more. I could cope with up to 5%, and I doubt it would make a blind bit of difference to my life.

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Re: Wealth tax academic paper

#376741

Postby richlist » January 13th, 2021, 7:56 pm

Applying wealth taxes in the UK really cant be that difficult. Other countries in Europe have wealth taxes that work ok for them. Let's just get on with it, we can fine tune as we go.

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Re: Wealth tax academic paper

#376749

Postby dealtn » January 13th, 2021, 8:30 pm

richlist wrote:Applying wealth taxes in the UK really cant be that difficult. Other countries in Europe have wealth taxes that work ok for them. Let's just get on with it, we can fine tune as we go.


Can you define what you mean by work ok please?

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Re: Wealth tax academic paper

#376756

Postby richlist » January 13th, 2021, 8:45 pm

No I cant.
I'm not an expert, I have people that do that sort of stuff for me. As this is a discussion forum I thought I'd throw my experience into the ring.

What I do know is that I have property in Spain and i pay an annual wealth tax. It not a large amount, its affordable for me and if it works for Spain it'll very likely work in the UK sooner rather than later.

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Re: Wealth tax academic paper

#376758

Postby johnhemming » January 13th, 2021, 8:51 pm

richlist wrote:What I do know is that I have property in Spain and i pay an annual wealth tax. It not a large amount, its affordable for me and if it works for Spain it'll very likely work in the UK sooner rather than later.

Spain has a property tax and a wealth tax. Do you pay both?

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Re: Wealth tax academic paper

#376759

Postby dealtn » January 13th, 2021, 8:52 pm

richlist wrote:No I cant.
I'm not an expert, I have people that do that sort of stuff for me. As this is a discussion forum I thought I'd throw my experience into the ring.

What I do know is that I have property in Spain and i pay an annual wealth tax. It not a large amount, its affordable for me and if it works for Spain it'll very likely work in the UK sooner rather than later.


So work means "some people pay it". Fair enough but I think most taxes will meet that hurdle of "working". The paper, and the subsequent discussion here, have a bit more depth to it than that.

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Re: Wealth tax academic paper

#376787

Postby Moosehoosenew » January 13th, 2021, 9:56 pm

Nothing can be surer than given Covid and an ageing population, taxes will need to rise.

We should involve ourselves in the conversation, those of us over 50 and doing ok.

Right now, it just looks like we are shovelling debt onto the next generation.

Say you have 4 million, 3.5 mill does not look too bad either.

I have a lot of respect for some aspects of higher tax Europe, would have hated it when I was trying to grow a company.

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Re: Wealth tax academic paper

#376842

Postby NeilW » January 14th, 2021, 5:34 am

Moosehoosenew wrote:Nothing can be surer than given Covid and an ageing population, taxes will need to rise..


Why? What physical resources are being used by the private sector that need to be freed up?

Tax has nothing to do with money. We can leave the rich to count their coins and employ everybody at the same time. And when we do the latter we get a boost to productivity, which is what actually funds improvements in the standard of living for all.

Where has this zero-sum mentality come from?

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Re: Wealth tax academic paper

#377022

Postby 88V8 » January 14th, 2021, 12:02 pm

NeilW wrote:We can leave the rich to count their coins and employ everybody at the same time. And when we do the latter we get a boost to productivity, which is what actually funds improvements in the standard of living for all.

That worked well in the USSR. And Cuba. And still works in North Korea.

Oh.

V8

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Re: Wealth tax academic paper

#377052

Postby anon155742 » January 14th, 2021, 12:39 pm

https://www.gov.uk/pay-self-assessment-tax-bill/bank-details

There is nothing stopping voluntary contributions to HMRC.


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