Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to Rhyd6,johnstevens77,Anonymous,MyNameIsUrl,6Tricia, for Donating to support the site

Wealth tax academic paper

including Budgets
Lootman
The full Lemon
Posts: 11352
Joined: November 4th, 2016, 3:58 pm
Has thanked: 148 times
Been thanked: 2555 times

Re: Wealth tax academic paper

#418805

Postby Lootman » June 11th, 2021, 11:31 am

SteMiS wrote:
Lootman wrote:And that "required amount" already overwhelmingly comes from those who are well off.

Whilst it's true that the well off generally pay more tax in pound note terms I don't think it's quite as extreme as the

"the richest 2% pay over 50% of taxes"

you quoted (which relates purely to income tax). As I posted earlier (viewtopic.php?p=418417#p418417), the percentage of income paid by the different quartiles is relatively similar. According to https://assets.publishing.service.gov.u ... le_2.4.pdf it is the top 25% that receive 53% of total income (before tax). So bearing in mind the similar overall percentage tax rates of the different deciles (and the fact that not all tax is personal tax) I'd say that's a better, albeit crude, view of where half the taxes come from...the top 25% not the top 2%.

I cannot now recall whether my 50%/2% quotation was about only income tax, or was about all taxes. As I noted before there are some taxes that are only paid by the better off e.g. CGT and IHT.

But even if it was only income tax, we can both be correct i.e. the percentage of income paid by each decile may be comparable AND the vast majority of tax is ​paid by the well off. It really depends whether one chooses to look at the tax as a percentage of income or look at the total amount of tax paid.

Those who want to hit the wealthy more generally prefer the first method of description, for fairly obvious reasons.

Steveam
Lemon Slice
Posts: 398
Joined: March 18th, 2017, 10:22 pm
Has thanked: 374 times
Been thanked: 207 times

Re: Wealth tax academic paper

#419124

Postby Steveam » June 12th, 2021, 10:04 pm

https://www.theguardian.com/business/20 ... hs-affairs

I agree with Gemma McGough (quoted in the article) and

https://www.belfasttelegraph.co.uk/news ... 63828.html

There needs to be reasonable, even generous, reward and recompense for the wealth creators and risk takers but excessive reward and wealth is divisive.

Best wishes,

Steve

Steveam
Lemon Slice
Posts: 398
Joined: March 18th, 2017, 10:22 pm
Has thanked: 374 times
Been thanked: 207 times

Re: Wealth tax academic paper

#419566

Postby Steveam » June 14th, 2021, 9:46 pm

This from an article in today’s FT

“There is nothing built into the economy that says you can’t tax unrealised capital gains. It’s not an immutable law of economics, it’s a deliberate policy choice, a choice that, based on the explosion of inequality in the US in recent decades, appears to be a pretty bad one. Wealthy investors like me, a former Wall Street executive, simply should not be allowed to pick and choose when we want to pay taxes on our investments.”

The article is “How the Wealthiest Americans get away with paying no tax”

Best wishes,

Steve

Lootman
The full Lemon
Posts: 11352
Joined: November 4th, 2016, 3:58 pm
Has thanked: 148 times
Been thanked: 2555 times

Re: Wealth tax academic paper

#419600

Postby Lootman » June 15th, 2021, 6:50 am

Steveam wrote:“There is nothing built into the economy that says you can’t tax unrealised capital gains. It’s not an immutable law of economics, it’s a deliberate policy choice, a choice that, based on the explosion of inequality in the US in recent decades, appears to be a pretty bad one. Wealthy investors like me, a former Wall Street executive, simply should not be allowed to pick and choose when we want to pay taxes on our investments.”

The "choice" not to tax unrealised gains wasn't really made at all. Rather it is the overwhelming default of almost every national government around the world. Of course that includes the various jurisdictions that do not tax capital gains at all. So you need a compelling reason to change that.

An obvious reason why nations continue to tax only realised gains is the principle that in general we tax transactions and not valuations. There are exceptions such as IHT in the UK, and more arguably council tax. But the principle in general is that tax should be applied where a transaction has happened because that transaction results in the individual actually having cash to pay a tax. If you tax a house or share position based on its uplift in value over the last 12 months then there is no assurance that individual has any actual cash to pay the tax. And forcing him/her to then sell to raise those funds would simply add more to their tax burden.

Of course in the UK by the time you have exempted one's main home, ISAs and SIPPs, the take would be a lot less than envisaged anyway. But the real cost of doing this would be to disincentivise people taking risks with capital. It might also drive investment to less punitive jurisdictions. There are sound reasons why CGT works the way it does, not that the envy mob cares about that in their war on success.

Steveam
Lemon Slice
Posts: 398
Joined: March 18th, 2017, 10:22 pm
Has thanked: 374 times
Been thanked: 207 times

Re: Wealth tax academic paper

#419611

Postby Steveam » June 15th, 2021, 8:31 am

Hi Lootman, I was reading your post and thinking about the points you make - some of which I think are quite sound - when I came to your throw away about the envy brigade. Why say this? Are you trying to suggest that everyone who supports or wants to explore wealth taxation is a members of the envy brigade?

I’m driven by a desire for a fairer society and a fear that (increasing) inequality will have adverse consequences. Given my personal circumstances it’s unlikely that I’d be a member of the envy brigade.

Best wishes,

Steve

Lootman
The full Lemon
Posts: 11352
Joined: November 4th, 2016, 3:58 pm
Has thanked: 148 times
Been thanked: 2555 times

Re: Wealth tax academic paper

#419614

Postby Lootman » June 15th, 2021, 8:43 am

Steveam wrote:Hi Lootman, I was reading your post and thinking about the points you make - some of which I think are quite sound - when I came to your throw away about the envy brigade. Why say this? Are you trying to suggest that everyone who supports or wants to explore wealth taxation is a members of the envy brigade?

I’m driven by a desire for a fairer society and a fear that (increasing) inequality will have adverse consequences. Given my personal circumstances it’s unlikely that I’d be a member of the envy brigade.

People play games with words all the time. So those who want a wealth tax claim it is about "fairness" and dismiss those who oppose it as "greedy". Whilst those who oppose a wealth tax will talk about concepts like "freedom" and "success", and dismiss those who support it as "envious" or "punitive". Isn't that just all part of the game? Fun with words?

Underlying all this is the central issue of "inequality". Those who dislike inequality think almost anything is justified to eradicate it. Whilst others like me really do not see a problem with some people having a great deal of money. It is really a question of values rather than facts. Personally I think it is a bit unhealthy to look at Gates, Bezos or anyone else and feel resentment or bitterness. I do not feel that way at all, and so struggle a little bit with what can easily be seen as envy against such people.

In fact the whole inequality bandwagon irks me, not least because nobody has ever successfully explained to me exactly how I am supposedly harmed by it.

scrumpyjack
Lemon Quarter
Posts: 2608
Joined: November 4th, 2016, 10:15 am
Has thanked: 240 times
Been thanked: 1181 times

Re: Wealth tax academic paper

#419615

Postby scrumpyjack » June 15th, 2021, 8:58 am

Even the Labour party at one point tried to move to Lootman's attitude, when Peter Mandelson said in a speech in the US that he 'is intensely relaxed about people getting filthy rich'.

Lootman
The full Lemon
Posts: 11352
Joined: November 4th, 2016, 3:58 pm
Has thanked: 148 times
Been thanked: 2555 times

Re: Wealth tax academic paper

#419616

Postby Lootman » June 15th, 2021, 9:10 am

scrumpyjack wrote:Even the Labour party at one point tried to move to Lootman's attitude, when Peter Mandelson said in a speech in the US that he 'is intensely relaxed about people getting filthy rich'.

I probably said this months ago up-thread, but the really insidious thing about this focus on inequality is how it changes the target of the debate.

It used to be that the redistributionists focused on poverty. And fine, if you care about poverty then focus on the poor. You can give to charities supporting them, volunteer your time, read The Guardian, vote Labour and all that. So far, so good.

But suddenly by relentlessly repeating the bogeyword "inequality", there is a subtle shift in the debate. Now the problem is not the poor, but rather the rich. The theory they want us to buy is that the reason people are poor is because of Bezos, Gates, Zuckerburg etc.

No mind that those individuals have generated billions in wealth and countless jobs for millions of people. No, they are the cause of every evil in the world. If only we could eradicate wealth then there would be no poverty. Or something.

It is a particularly snide change of emphasis in order to create division and class conflict.

1nvest
Lemon Quarter
Posts: 1568
Joined: May 31st, 2019, 7:55 pm
Has thanked: 193 times
Been thanked: 417 times

Re: Wealth tax academic paper

#431498

Postby 1nvest » July 30th, 2021, 3:07 pm

Lootman wrote:
Steveam wrote:“There is nothing built into the economy that says you can’t tax unrealised capital gains. It’s not an immutable law of economics, it’s a deliberate policy choice, a choice that, based on the explosion of inequality in the US in recent decades, appears to be a pretty bad one. Wealthy investors like me, a former Wall Street executive, simply should not be allowed to pick and choose when we want to pay taxes on our investments.”

The "choice" not to tax unrealised gains wasn't really made at all. Rather it is the overwhelming default of almost every national government around the world. Of course that includes the various jurisdictions that do not tax capital gains at all. So you need a compelling reason to change that.

An obvious reason why nations continue to tax only realised gains is the principle that in general we tax transactions and not valuations. There are exceptions such as IHT in the UK, and more arguably council tax. But the principle in general is that tax should be applied where a transaction has happened because that transaction results in the individual actually having cash to pay a tax. If you tax a house or share position based on its uplift in value over the last 12 months then there is no assurance that individual has any actual cash to pay the tax. And forcing him/her to then sell to raise those funds would simply add more to their tax burden.

Of course in the UK by the time you have exempted one's main home, ISAs and SIPPs, the take would be a lot less than envisaged anyway. But the real cost of doing this would be to disincentivise people taking risks with capital. It might also drive investment to less punitive jurisdictions. There are sound reasons why CGT works the way it does, not that the envy mob cares about that in their war on success.



http://warrenbuffettoninvestment.com/ho ... -investor/

The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5% passbook account whether she pays 100% income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5% inflation. Either way, she is “taxed” in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120% income tax, but doesn’t seem to notice that 6% inflation is the economic equivalent.

Each new note printed/spent benefits the counterfeiter at the expense of devaluing all other notes in circulation, a form of micro taxation.

Wealth taxation policies tend to soon end. Sweden I believe collected 600 million in more taxation but saw hundreds of billions of outflight. Less inward investment, outflows instead, and the cost vastly outweighs the benefits.


Return to “The Economy”

Who is online

Users browsing this forum: No registered users and 4 guests