1nvest wrote:ursaminortaur wrote:1nvest wrote:There's no need for internal (UK) taxes at all. Useful to tax external facing as fundamentally its only the deficit that matters. The BoE printing/spending money is a form of micro-taxation, each new note added devalues all other notes, as such much of the excessive tax rule book and collecting/recording systems could all be thrown out of the window - which would promote economics rather than the present system of hindrance. Parliament also is in need of reform, its usually good to periodically cut out all the dead-wood.
Policies whereby £'s can flow to China, whilst China as good as forbids its citizens from buying foreign ... will not ultimately end well. Taxes should target that, and not the situation we're actually in of how far the public sector can excessively drain the private sector (gold plated pensions for many in the public sector, hardship for many in the private sector ..etc.).
The fact that governments require their citizens to pay their taxes in the currency that they issue is the only reason that those currencies are accepted as having value. If government stopped all UK taxation but kept creating money so that it could continue spending then because of how much the government spends you would end up with hyperinflation in that currency and since the citizens didn't need it to pay taxes they would switch to using a more stable currency.
Yes taxation is a form of destruction of some of the money printed. Without such destruction indeed inflation would rage into hyperinflation. However if the state takes part ownership of businesses operating within its realm i.e. buys stocks, then it receives revenues from those businesses. Similar destruction of previously printed money. Whilst also gaining influence in what/how businesses operate, in some cases perhaps a controlling influence (majority shareholder). That also directs government to work for the benefit of both the citizens and businesses. From a foreign perspective, sales taxes and dividend withholding taxes could be utilised. So for instance a large outfit/firm that was selling into the UK but otherwise paying no taxes into the UK treasuries coffers would still albeit indirectly be contributing; As would foreign holders of UK based businesses be paying via dividend withholding taxation.
£600Bn of taxes collected under the current arrangement.
Around £8Tn of UK assets value held by foreign, say paying 4% dividend/benefit, £320Bn, presently with 0% withholding tax, being revised to withholding 30% (as per the US). £100Bn of replacement revenue.
Foreign sales into the UK, £500Bn, 20% tax, £100Bn of revenue.
£4Tn UK stock market cap value, doubles as money is printed to buy up half of all shares. £8Tn market cap, lower dividends, half of dividends going to the treasury. Maybe another £100Bn.
In not paying taxes wages/costs/prices decline significantly. Such that former £600Bn of tax collections (and government spending) halve, and where withholding taxes, import tax and business share earnings are covering the £300Bn of money destruction.
In UK wages and cost of living having declined, foreign would be more attracted to employ/buy British, whilst UK standards of living would be much the same as before, other than it being cheaper to buy British stuff over buying foreign stuff. To dissuade that other foreign governments might impose withholding taxes - however they already do! The UK is one of the exceptions rather than the rule in that respect. They might strive to block their citizens from buying British products - but they already do, and none more so than China. The UK has been a gift horse for too long and at great cost to its economy and people. It should be looking to level up. For the UK the EU has been a disaster, but our cost has been their gain. UK assets have flowed out, whilst prior relatively poor EU countries have been raised up to the same/higher levels, at our expense.
Firstly many of the companies on the UK stock market especially those in the FTSE 100 are international or foreign companies and wouldn't react well to the UK government taking 50% of their business. (and foreign governments probably wouldn't react very well either).
Secondly do you really want the government to have such a large stake in all UK businesses ? Government intervenes enough already. Although you didn't propose the government taking 51% and thus having full control having 50% would probably be enough to exercise full control in most circumstances. Shareholders, pension companies etc would also probably react badly to the lower dividends.