Lordy be

It is the UK’s only really effective tax on wealth itself. Wealth inequality is increasing rapidly in the UK. Around the world it is seen as a major issue. Organisations such as the International Monetary Fund[iv], World Bank[v] and Organisation for Economic Cooperation and Development[vi], none of which are seen as hotbeds of socialism, suggest that taxes are required to address this issue and create more equal societies.

More equal societies tend to be more socially and politically harmonious than unequal ones.

They also tend to be more prosperous and see more economic growth as those with lower wealth (and incomes) spend more of what they have, and so turn a given level of income into greater economic activity than do unequal ones.

The wealth effect works the other way around. When our wealth increases we spend more of our incomes as we need to save less to smooth income over our lifetimes. This is why falling asset prices are correlated with falls in consumer spending – the savings rate rises.

Spudda really ought to try getting the signs right in his economic musings.

14 comments on “Lordy be

  1. “…as those with lower wealth (and incomes) spend more of what they have, and so turn a given level of income into greater economic activity…”

    Isn’t that the trickle down effect he’s championing?

  2. Quite, DocBud. Just like the Tories and numerous other institutions which continue to be characterised as anything but.

  3. I enjoyed this:

    The most effective, and fairest, would be to tax all receipts of gifts during a person’s lifetime. This would discourage the concentration of wealth and instead of charging the dying – who could then give to whomsoever they wanted – would charge the living to reduce inequality. Few doubt that this is the best long term direction of travel.

    I am wondering whether my children will be taxed on their Birthday and Christmas presents, or indeed if I bring them back a T shirt or other ‘gift’ from a business trip will that be considered ‘taxable’? Truly, in my exposure to the KCNA website (The official North Korean news service) I have never met a more curmudgeonly, horrible and spiteful piece of S£$t as the Snippa – he is the embodiment of evil and frankly I hope he suffers every conceivable misfortune on his way to deserved penury and reliance on charity.

  4. ‘Wealth inequality is increasing rapidly in the UK. Around the world it is seen as a major issue.’

    Why does the world care about ‘wealth inequality’ in the UK?

    Yes, it’s pendantry. Just pointing out how incompetently he writes. Almost English as a second language.

    ‘Wealth inequality’ is a plastic banana, anyway. Wealth inequality (sic) is good, not bad.

  5. More equal societies tend to be more socially and politically harmonious than unequal ones.

    A fact-free assertion.

    They also tend to be more prosperous and see more economic growth as those with lower wealth (and incomes) spend more of what they have, and so turn a given level of income into greater economic activity than do unequal ones.

    Another fact-free assertion.

    The poorest country in the world (using GDP as the measure) is the African nation of Burundi. There 82% of the population lives on $1.25 a day or less and 90% of the Burundian population rely on agriculture. Lots of equality there, but not much in the way of social or political harmony (the Hutu-Tutsi ethnic conflict, a civil war and the odd failed coup). Nor much in the way of economic growth, either.

  6. The fantasy Scandi countries are relatively equal on an income basis but much less equal on a wealth basis. Precisely because it’s so hard to earn your way to wealth there. The commies never mention that, do they?

  7. The most effective, and fairest, would be to tax all receipts of gifts during a person’s lifetime. This would discourage the concentration of wealth and instead of charging the dying – who could then give to whomsoever they wanted – would charge the living to reduce inequality. Few doubt that this is the best long term direction of travel.

    I fucking doubt it, as would any competent accountant who has done any succession planning for a closely held business.

    Another fact-free assertion.

  8. @Dennis

    I think the Ukraine is one of, if not the, most income equal countries in the world.

    It is also one of the poorest countries in the Western world.

    Just the place for Spud to go and be happy.

  9. Dennis

    ‘I fucking doubt it, as would any competent accountant ‘

    Which excludes Murphy obviously – good response though made me laugh out loud!!

  10. I’ve already paid tax on my income when I buy a beer. Double taxation is the norm. There are good arguments against gift taxes and inheritance taxes but “double taxation” is not one of them.

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