Mr Shaxson is an idiot

As we get braver we should also aim to tax all those unrealised gains – so if a billionaire’s wealth rises, they pay tax on that annually, whether or not they sell (or “realise”) assets. Some powerful Democrats in the US are now pushing for just this.

Sigh.

So where does the money come from to pay taxes on unrealised gains? The gains must be realised, right?

16 thoughts on “Mr Shaxson is an idiot”

  1. The Meissen Bison

    I liked this bit:

    Another trick is to take a carefully primed asset currently worth almost nothing, push it into a tax-free retirement account […] then flick a financial switch and watch its value explode, tax free, once safely inside the account

    Must rush, though, as I have some assets that need careful priming.

  2. Indeed.

    I have a gold brick. Gold increases in value. What do I do, shave a bit off the brick? If gold falls in value the following year do they post my shaving back?

    Denis Healey commented in his memoirs on his proposed wealth tax.

    ‘in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle’.

  3. Another trick is to take a carefully primed asset currently worth almost nothing, push it into a tax-free retirement account […] then flick a financial switch and watch its value explode, tax free, once safely inside the account

    Make tax code horrendously over complicated, watch far cleverer people exploit the rules perfectly legally.

  4. Meanwhile…..

    “If the British understood taxes better, perhaps we would vote for them to be fairer….

    Merging income tax and NI would reveal the top tax rate to be 53%.

    Polly Toynbee”

    That would be the 45% top rate of income tax and the 2% NIC charged at such levels?

  5. No, they’re adding employers’ – correctly. 13% – or whatever – off the total sum, then 45% off the total minus 13%. Blended rate of employers, employees and income tax is about 53%.

  6. Won’t somebody think of the billionaires (99.99% of whom aggressively support the political Left)?

    No? Ok then.

  7. Of course there’s a band where it’s higher due to the withdrawal of the Personal Allowance; my initial assumption was this was what was meant, but the Employers’ NI seems more plausible.

  8. “Lesser mortals pay tax on salaries. Billionaires avoid grubby salaries or even income. Instead, they own assets that rise in value”

    How do they pay for breakfast, then, if they have neither income nor capital gains? Mind you, reaping small capital gains is pretty tax-efficient. But I don’t suppose that married billionaire couples scrape along on 80,000 bucks a year.

    Married, filing jointly, Long-term capital gains tax rate
    Your income
    $0 to $80,000 0%
    $80,001 to $496,600 15%
    $496,601 or more 20%

  9. In £100k to £125k band the rate is 13% Employers NI, 60% Income Tax + 2% Employees NI.
    £113 pounds paid means that £75 goes to the taxman, and 38 received.
    I make that a tax rate of 66.37%

    The 60% is comprised of 40% higher rate tax, plus a 50% reduction in personal allowance moving a further half from 0% into 40% = 60% overall.

    But you’ll never hera any of the lying scumbags admit to the 60% band.

  10. “Mr Shaxson is an idiot”

    Someone lent me Treasure Islands once. I only made it through the first chapter before I had to hand it back. As an introduction, it was ridden with errors and far left politics, most of it carefully posing as fact. I’m not convinced he’s that stupid.

  11. The starting point for the withdrawal of personal allowances at £100k was introduced 11 years ago and would by now be c£133k had it kept pace with CPI.

    A nice example of fiscal creep.

    You can also add in the High Income Child Benefit Charge and restrictions on what you can put into your pension as other tax changes aimed at those on higher incomes.

  12. In the dozen or so years that I’ve been perusing the Guardian (don’t ask me why), it’s only been this year that they’ve realized that substantial wealth comes from owning assets that increase in value.

    Wealth taxes would certainly make for a robust appraisal industry and lawyers specializing in challenging appraisals.

  13. Given that his Twitter bio says he lives in Berlin and he previously lived in Switzerland somewhere, how much UK tax does he pay? He sure does love to bang on about how little other people pay, what about himself?

    Oh, right. That’s different.

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