Lootman wrote:Yes, the discussion is about the effect of a wealth tax on the behaviour of individuals and, as noted, wealth will flee if it starts being taxed, leading to a reduction in the amount of wealth being available to be taxed in that way.
That's the fallacy of composition. There is no reduction. Just a change in the calculation that alters the distribution.
While you remain domiciled here the UK authorities can raise a charge on your world wide ownership.
But that will have the effect of driving more wealth elsewhere, or otherwise reducing economic activity in general.
Very difficult to move those buildings abroad, or anything else physical - since that leaves a record. And that would be evasion. Pretty much anything else requires an exchange, which just means somebody else owning the item.
The notion of exporting 'wealth' is another of those illusions that turns out to be rather more challenging than it seems. A bit like "moving abroad".
And none of it reduces the capacity of the UK to invest in whatever it wishes by one single penny.
Higher taxes is not a free lunch for the government.
Wealth taxes are a waste of time, unnecessary and counter productive. As I have said several times. However that doesn't mean they can't happen.
And as we have seen throughout this crisis government can replace 'economic activity'. It's that replacement that has triggered this insanity of discussing wealth taxes in the first place.