The first is that in the period 2011 – 18 the national income of the UK was £13.1
trillion, and in that same period the increase in net wealth was £5.1 trillion. It is
stressed, that this figure is not for total wealth, but the increase in the value of that
net wealth in that period.
Second, the overall effective tax rates on income during this period were unlikely to
have averaged more than 29.4% in this period, but those on wealth increases did not
Third, if these rates had been equalised it would, at least in principle, have been
possible to raise an additional £174 billion in tax revenue per annum from the owners
So, our starting point is that we could get lots of munnies by taxing the increase in wealth.
Then we’re told this:
Now do you see what is wrong with his starting point? He’s claiming that its viable to even think about imposing income tax rates on increases in house prices and the capital value of pensions funds.
For that is what he’s suggesting if those tax rates should be equal – which is what he is suggesting for he’s directly comparing that 3% or so with the 29% or so.
So, yes, he is suggesting that his nul hypothesis is that if your pension pot rises in value then you should be paying income tax upon that rise in value.
This before we even get to the point that we’ve tried this with doctors and they’re all retiring instead of being willing to pay marginal income tax rates of over 100%.
In addition, the fact that increases in the value of homes and pensions may not result
in immediate cash benefits to those who own them does not mean that such increases
do not contribute to the overall increase in the financial wellbeing of those who gain:
both the sense of security that such increases in wealth provide, and the means that
they afford to live in greater comfort at some time in the future have direct impact on
the manner in which those enjoying them both feel in the present, and on their actual
behaviour with regard to consumption and lifestyle choices. As such they cannot be
discounted in any discussion on current taxation, not least because they do provide
greater capacity tax at present in the vast majority of cases