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So, who are the wealthy who must be taxed?

Over and above the usual answer of those who have £5 more than the person being asked of course.

One is that you can save a lot. Your proportion of voluntary savings goes up as a part of your earnings. You put more into your pension, you put more into your ISA, you put more into whatever else it is that you want to store value in for your future. That is one measure of well-being.

The other one is that you can actually afford to make choices about what you do in life. In other words, you can afford to not work. You can retire early. Or you can afford to work less, or you can actually choose to do what you wish rather than what you have to, to put food on the table, pay the bills and everything else. Now, that’s a pretty critical distinction, but it’s really important because that point does arrive in some people’s lives.

It is a point where we can recognize that people have real wealth because wealth represents choice and the opportunity to take it, and that opportunity to decide where you save more or where you work less is critical. This is a point where you cross over from being ordinarily well-off to being wealthy.

The wealthy are any bourgeois on the verge of being independent.

Can’t have that of course – Tutto nello Stato and all that. So, tax them back into dependency.

17 thoughts on “So, who are the wealthy who must be taxed?”

  1. Serious question who is wealthy?
    For example consider two young people one is a single parent on benefits in a home worth £800k (not impossible in London). One earns £40k and lives in a room in a shared house next door.

  2. What are voluntary savings? Isn’t all saving voluntary? At least until we’re forced to invest in potato bonds.

    And where are all these wealthy people getting to a certain point and then putting their feet up. Anyone making their money privately doesn’t do that. The only ones who seem to do so are the public sector retiring early on pensions they didn’t earn.

  3. Martin Near The M25

    “In other words, you can afford to not work.”

    Yes, and you can afford to live in a big house, play with model train sets and write nonsense rants about subjects you are ignorant of.

  4. The truly wealthy don’t have to work

    They have people who manage their investments, assets and tax affairs and sit back as their accumulated asset register brings in dividends and capital gains

    Estate planning ensures that very little of this is taxed as it is handed on through their family or chosen recipients

    They can also use their wealth to influence compliant politicians (some of whom are already ‘wealthy’) to ensure tax and legal frameworks keep their stash safely out of reach

    Middle earners meanwhile are taxed to the hilt

    The George Soros’s of this world can also indulge in manipulating political systems and media in their favour, the NetZero lunacy is a case in point

  5. Taxes should be fair. I think that’s obvious. Well, it should be to anyone.

    So what happens when the notion of ‘fairness’ is disagreed? Who decides what is fair?

    They’re not in the UK at present because we know that the wealthy underpay tax compared to those on lower incomes, and that’s one of the reasons why I wrote the Taxing Wealth Report, precisely because we do need to redistribute income and wealth from those who’ve got high levels of both to those who have very little of either.

    Why do we need to redistribute wealth? On what basis? Additionally I think recent stats show the wealthiest as paying well over 60% of all income to the state for a return that many would characterise as zero. Certainly the police seldom investigate real crimes. Infrastructure is crumbling. Education is woeful. What return are they getting for that?

    You wrote the ‘Taxing Wealth report’ which has been universally derided because you needed to justify your grants through some output.

    So obviously, that’s one reason why we can increase tax fairness, but we need some sort of guide as to what we mean about tax fairness. And in the Taxing Wealth Report, I use two guides. One is horizontal tax equity, and one is vertical tax equity. Now, let’s just explain what they are.

    You could write a lengthy book outlining all the various boondoogles he has ‘invented’ and it might rival the report he has just issued in length

    Horizontal tax equity means that one pound arriving in your pocket from whatever the source should be taxed the same way, whatever that source was.

    So, if you got your earnings from work, say one pound, then I am saying that the tax due on that should be the same as if you got that one pound from interest received, or rents, or capital gains, or anything else. Whatever the source of your profit, the one pound that increases your well-being – because we generally recognize that more money available to you does usually increase well-being – the amount of tax you pay should be the same.

    That is the argument that horizontal tax equity makes, and that is why, for example, I argue that capital gains should be taxed at income tax rates. It’s straightforward, it’s clear, it’s obvious, and “£1 is £1 from wherever it comes” is a simple motto but it’s absolutely true as well.

    It’s not an argument that’s been used anywhere in the world outside academia, for numerous reasons that many on these boards have expounded. Indeed anyone making such an argument should ordinarily be dismissed as either wilfully ignorant or a fringe crank – or both. From a brief study it’s also not what the conventional definition of ‘Horizontal tax equity’ is – it’s that different people should be treated equally/

    Vertical tax equity is a different form of tax justice.

    Vertical tax equity says that those on low incomes who lose a pound in tax suffer much more in terms of their well-being than a person who’s on a million pounds a year who pays £1 in tax.

    Why? Because the person with a million a year doesn’t frankly notice whether they’ve got one pound more or less. The marginal cost of them giving up one pound in tax is insignificant because they don’t notice the difference, whereas the person on a very low income does notice the difference. So, what vertical tax equity tries to do is equalize the broad cost in terms of well-being foregone of tax paid.

    The result is that the tax system must be progressive. Those on low incomes must pay a much lower proportion of their income in tax than those on high incomes because, relatively speaking, the impact on their well-beings is equal. And that is tax justice.

    This seems to me to be little more than a restatement with some fancy jargon of the justification for progressive tax. Perhaps he is ignorant of the fact the tax burden is at it’s highest across the board for 5 decades. Leaving aside the morality of such an approach which I consider inherently dubious he ignores the powerful impact of disincentives.

    As the great Andrew C says – there’s little that’s new here. Effectively it seems to be a deeply inadequate and bitter individual annoyed that his self-assessed genius hasn’t been recognised by wider society with an income and level of wealth ‘appropriate’ to his elevated understanding. It’s really quite sad in many ways. I can’t help but want him to suffer some sort of medical calamity soon. The sooner his evil is at an end the better for all concerned.

  6. “Let me provide an example. Suppose X and Y buy a property for £100,000. Three years later, they sold it for £120,000 and bought another one for £150,000. They then separate a little while later. X agrees to pay Y £60,000 for the equity in the property. Y then buys a new property using those funds. So, X has, after this, an interest of £50,000 from the first property and an additional £15,000 (£150,000 new cost less £100,000 original cost, less £20,000 gain, all divided by two) from the second property. X then adds £60,000 to their base cost by buying out Y, giving a total base cost of £125,000 at that point.

    Meanwhile, Y also had a base cost of £65,000 at separation. Presuming the £60,000 was all gain, this base cost is not changed by the disposal, and so long as they reinvest in a new property, no tax is due. Instead, they take the £65,000 and any difference between the £60,000 and the sum invested in a new property into their next property. So, if they spent £80,000 on the new property, their base cost would rise by £20,000 as £60,000 of that was rolled over gain. If they spent £40,000 extra on the new property they would reduce their base cost by £20,000 as this sum would not have been reinvested. This last point is important for downsizing. I cannot see the complication in this.”

    OT, but the above (from Spuds spewings on CGT on housing) amused me, particularly the last sentence.

  7. Of course, normal people don’t know or care who X and Y are and aren’t desperately stimulating themselves working out how much of their money they can claim for themselves.

  8. Spend your money as you earn it, take two value holidays a year out of season and spud will leave you alone. Save up for a splendiferous one off holiday every 5 years at 10 times the price and spud will have some those savings. I’m tempted to put him on a mailing list for such speciality breaks, a week’s bird watching in the Falklands stuff

  9. Bloke in North Dorset

    Have I got his intentions right?

    Two people get paid the same:

    The first likes to take a foreign holiday in summer and go skiing in winter. He’s a social animal and like to go out a lot with friends to dinner and and drinking, maybe plays golf and has a season ticket for a football club. Nothing extravagant, but doesn’t put much extra aside for retirement and accepts he’ll be working most of his life.

    The second likes a quiet life. He likes gardening, reading, crossword puzzles, singing in the church choir. He doesn’t spend ,much so he puts aside his spare cash in his pension fund and ISAs and dreams of retiring early and buying a nice house with a big garden somewhere in the country.

    And then along comes the State in the form of a Fat Controller and decides that the 2nd person must be rich because look at all those saving and before the poor sod can retire the Fat Controller says, I’ll have some of that because you obviously don’t need it, without even a thank you or by-your-leave.

  10. BiND

    I do believe you have it surrounded

    I lack the ability of the great Noel Scoper to find his previous witherings but one post on Crypto summarised his philosophy.

    In the comments, I recall him saying:

    ‘There’s a lot of wealth and it needs to be taxed’

    What kind of person comes up with a book called the ‘Joy of Tax’ anyhow?

    Man is utterly deluded and let’s hope he starts arguing with his new Hamas supporting allies sooner rather than later!!

  11. Seems like quite a lot of benefits claimants are doing it as a lifestyle choice – and so should be taxed to oblivion?
    Actually I’m OK with that.

  12. And lest anyone think they can escape – from another post…

    One of the strangest consequences of running a blog that has quite a high volume of traffic is that I receive a great many press releases a day. Most go straight into the electronic bin, but there are exceptions that demand that I read them. One of those came in from Extinction Rebellion this morning.

    Quite the terrorist sympathiser these days. Like a superannuated Citizen Smith

    It said, and I unashamedly quote:
    Extinction Rebellion, BBC Wildlife legend Chris Packham and tens of thousands of members of the public will ‘unite for nature’ by joining a legal and family-friendly demonstration on the streets of central London on Saturday 22 June 2024.
    Backed by a wide-range of nature, wildlife and climate groups, from RSPB to the National Trust, the demonstration aims to be the biggest-ever gathering of nature and climate supporters in the UK.

    Anyone who can describe the truly appalling Chris Packham, who has done more to damage nature than almost any single individual as ‘A wildlife legend’ says more than I ever could

    The Restore Nature Now demonstration will bring thousands of people together to call on all political parties to take action to restore nature and tackle climate change in the UK, as one of the worst nations for nature loss.

    Perhaps if organisations like the various ‘Wildlife charities’ and the a national Trust concentrated on practical matters rather than apologising for actions that took place several centuries ago, or for ‘racism’ then things might be in better shape?

    Environment campaigners are urging everyone who cares for nature to unite and march through London to Parliament Square on Saturday 22 June, with a simple demand to all political parties: Restore Nature Now.
    The press release includes quotes from Chris Packham, the RSPB, the Wildlife Trusts and others. XR is clearly working with them on an agenda that they say demands:

    It’s like the Peter Simple concept of ‘Rentacrowd’ – seamlessly floating from a Hamas March one week to an XR demo the next.

    A pay rise for nature – Farmers manage 70% of UK land and have a huge role to play in supporting environmental recovery. But they need more support. We want to see the nature and climate-friendly farming budget doubled.
- Make polluters pay

    The single largest threat to farming is ‘Net Zero’ but these people and Murphy are so utterly ignorant they don’t seem to realise it.

    – Big businesses – from water, to retail, to energy – all contribute to environmental decline. We want new rules to make them contribute to nature and climate recovery, and an end to new fossil fuels.

    An end to fossil fuels will mean the death of millions – genocide seems to be ‘en vogue’ at the moment on the left.

    – More space for nature – Just 3% of English land and 8% of waters are properly protected for nature and wildlife. To meet UK nature and climate commitments we need to expand and improve protected areas, and ensure public land and National Parks contribute more to recovery.

    And how does this square off with your support of a new city the size of Manchester arriving every year exactly?

    A right to a healthy environment – Limited access to nature, and pollution in the air and water, affects everyone’s health. We’re calling for a commitment to an Environmental Rights Bill, which would drive better decisions for nature, improve public health and access to high-quality nature.

    Another ‘rights bill’ – what could possibly go wrong?

    Fair and effective climate action – We cannot save nature without solving the climate crisis. We want to see investment in warm homes and lower bills by increasing home energy efficiency, supporting active travel and public transport, and replacing polluting fossil fuels with affordable renewables to ensure we at least halve UK emissions by 2030.

    Is this in addition to the billions already squandered on Net Zero at a time when the national debt is at an all time high and there is literally no money left whatsoever?

    As they also note:
    Polls have revealed that the British public is highly concerned over inadequate UK climate and nature action. Results from two UK-wide surveys conducted by The Wildlife Trusts showed that irrespective of voting choice, nature matters to people across the electorate, with 93% of voters reporting that they believe nature loss is a serious threat to humanity. Recent YouGov UK polling on behalf of WWF-UK also showed that the majority of people (70%) think it’s possible to avoid the worst effects of climate change but more than half (58%) think it’s only possible with more drastic action.

    I think the dictum would be changed to ‘lies, damned lies and opinion polls’ if it were being written today.

    I am in that last category.

    ‘Most evil man in Britain backs genocide , and not just of Jews’ – a headline that’s typical of his output since last October.

    As a founder member of the Green New Deal Group, as well as an enthusiast for nature, I unsurprisingly support these demands made by organisations, many of which I belong to. I will look to take part in this activity in some way.

    Any chance Mossad can take the demonstration out?

    There is, however, I think much more to this. As John Harris suggested in an article in the Guardian earlier this week, our attitude towards nature might now represent the real faultline in politics and the source of the new radicalism that we need if our society is to survive.

    I guess Harris is back en vogue – Murphy had him tagged as a ‘neoliberal’ – must be Wednesday

    Business does, through its actions, deny the reality that we are facing. For example, I noted a Telegraph headline this morning suggesting that airports want more tax exemptions for tourists to encourage greater air travel to the UK, which is exactly the opposite of what our planet needs.

    No flights for you peasants

    Similarly, tech companies work their very hardest to make sure that children’s exposure to nature is minimised as their screen time is maximised. In the process they undermine the understanding that our existence is utterly dependent upon our relationship with nature, which relationship is in peril.

    No smartphones for kids

    Despite these best efforts by those businesses and others, I am also quite sure that a growing majority are aware of the risks that we face. There may not be enough people willing to take action as yet. Far too many remain dedicated to consumption-based lifestyles.

    We’ll decide what you need. It worked very well for decades in Russia

    The reality of the need for change has not permeated the consciousness of sufficient people as yet, but maybe it is beginning to be a major concern for enough people to effect change.

    The only part of the statement that is even close to accurate. Most people care about the environment provided that it does not interfere with their current lifestyle to an excessive degree. As we see when people are confronted with the reality of what ‘Net Zero’ will entail there is enormous pushback and legislation can only be forced through without debate

    That is my hope. That is why I share this. That is why I am more than happy to be considered decidedly woke on this issue. I am awake to nature. We need everyone to be so.

    Sometimes I do feel like an opponent of the Nazis (not necessarily a Jew but a political rival in the BVP or Zentrum) – the likes of Murphy don’t hide their hatred for humanity. The worry is they seem to be in the vanguard. As BiS says – many of his maxims have been adopted. Does tomorrow belong to him?

  13. “So, if you got your earnings from work, say one pound, then I am saying that the tax due on that should be the same as if you got that one pound from interest received, or rents, or capital gains, or anything else.”

    … or grant income?

    … or proceeds from selling shares in AutoTrader?

  14. Improving nature? Has he never looked out of a window? We’ve been doing that for over a century in the UK.

    Near to where I live there used to be open-cast quarrying. That’s now all moorland. There used to be open-cast ironstone mining – again, moorland. There used to be a brickworks – now woodland. There used to be a whale rendering plant – now a holiday village. There used to be alum mining, which would have stinked to high heaven in its day – now rolling wooded hillsides.

    The moron is just completely unaware of the universe around him.

  15. What kind of person comes up with a book called the ‘Joy of Tax’ anyhow?

    One who’s missing out on the “Joy of Sex”?

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