It's easy for most people to favour additional taxes on wealth. That is because they will not pay them.
But suppose you were wealthy? Would you favourite additional taxes on wealth in that case?
Warren Buffet famously does. As he once said, he paid a lower rate of tax than his secretary, and that's wrong.
Evidence I've noted this morning suggests underpayment by the wealthy may well be greater than many have thought.
I have come to the same conclusion.
So would you favour more tax on wealth if you were wealthy, and as importantly, why?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
If I was wealthy……
I think it might depend, if I was going to remain honest in my new wealthy state, whether I felt/thought I had earned the wealth.
In truth I cannot fairly answer the question because I find it so hard to imagine conditions which would lead me to be wealthy. I suppose if I was wealthy I would behave as other wealthy people in my peer group behaved; and I suppose we would all be tacitly congratulating each other on our worthiness.
For too long the rich have become obscenely richer whilst the poor have become poorer. The divide is getting wider and the greed exhibited by millionaires ‘furloughing’ -when they could easily meet the cost of their staffs’ wages/salaries is proof of their greed. By doing this they are costing all taxpayers.
Many of them have so much money they could not spend it in a hundred lifetimes and often use every ‘tax dodge’ their financiers can find.
Depends if you believe there is any underlying purpose embedded in life and what that purpose was and whether it’s sustainable!
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3471369/pdf/nihms401950.pdf
You are only rich because I am poor.
The real part of the UK economy has for 40 years needed more, not less money in it.
Raise the zero rated income threshold to £36k.
By all means, increase tax on the rich but it won’t make any difference. They are already at their maximum propensity to consume and an extra 10 or 20% tax won’t change that.
How would the government be paid for if more than 60% of people in the country did not pay income tax?
I didn’t think taxes were necessary to pay for the government. I thought that was old fashioned thinking. That’s what you said yesterday.
As I have said to others (and there appears to be some rather persistent trolling here), there are six reasons to tax:
1) To ratify the value of the currency: this means that by demanding payment of tax in the currency it has to be used for transactions in a jurisdiction;
2) To reclaim the money the government has spent into the economy in fulfilment of its democratic mandate;
3) To redistribute income and wealth;
4) To reprice goods and services;
5) To raise democratic representation – people who pay tax vote;
6) To reorganise the economy i.e. fiscal policy.
I thought taxation was only a means to control inflation (which is currently extremely low) or have you changed your position? I thought tax didn’t pay for government spending. I’m confused now
I have always said there are six reasons to tax:
1) To ratify the value of the currency: this means that by demanding payment of tax in the currency it has to be used for transactions in a jurisdiction;
2) To reclaim the money the government has spent into the economy in fulfilment of its democratic mandate;
3) To redistribute income and wealth;
4) To reprice goods and services;
5) To raise democratic representation – people who pay tax vote;
6) To reorganise the economy i.e. fiscal policy.
Sorry? I thought your position was that tax did not pay for government and that the role of tax was to reduce inequality and prevent inflation…
So, if you were wealthy would you want to reduce inequality?
“How would the government be paid for if more than 60% of people in the country did not pay income tax?”
When you wrote this Richard, it sounds a bit like when people say “so, where’s the money coming from to pay for it?” I’m glad you clarified, it reads better than your initial response in my view. I think the corollary of higher wealth taxes would be lower taxes on smaller incomes to help with redistribution. I would pay more tax if the tax system was genuinely progressive and fully linked to social benefit. As it is I deeply resent regressive taxes like VAT, council tax and NI payments. Also, I would tax unearned income at a higher rate than earned income, I don’t get harmonisation when it’s a payment for someone else’s labour. I’d also introduce a redistribution to workers element. For instance, say 50% of all BoD bonuses, share options and share dividends a company distributes are diverted equally to everyone in a business, like a UBI. That’d help redistribution.
But we don need taxes to control inflation – and it is very unlikely that what you suggest will be enough to address that need and so either an unstable economy or shrinkage in government sewrvies would result
Tax may not pay for government spending – but there is a relationship that has to be respected if we want stable and deliverable government
I’m curious as to whether you think your suggestion can be modelled?
Wealthy?
Can you give a definition of wealthy? I feel wealthy compared with the vast majority
but maybe not as defined by the experts.
You decide!
My good luck, not work, but the growth in assets in London I have moderate wealth. The tax I would willingly pay is IHT at say 99%. Underlying inequality is perpetuated by inheritance. I intend to try and spend a portion of my money. I know that I can will money to charities, the government etc but this does not attack the problems of inequality that inheritance rolls over. No apologies to my family.
Thanks
Of course it depends how you define wealth. If you define it in simple monetary terms then you might be doing the wealthy a favour by removing some of their cash and making them get a life and discover what true wealth is. I can look at my lifestyle and consider myself wealthy in living in the countryside with an abundance of walks all around me. To own a modest but comfortable home with wonderful neighbours, many good friends and a loving family. The unfortunate bit is that the tendency of the neoliberal economy is to monetise that and start charging me for having found a comfortable spot to reside. Robert Tressel saw it coming by saying if they could charge us for the air we breath, they would. I have no envy at all for the truly wealthy because from all I read about them they appear to live thoroughly miserable lives. Let them jet off to their Caribbean islands, just don’t come out here and hollow out our village communities by buying up property at vastly inflated prices and leaving them empty for most of the year or letting them out for parties of drunken youths with Porsches and BMWs.
I can’t be certain how being wealthy would make me feel or think, it may change people’s perception of reality, it may skew the mind a bit…
All I can say is that I never minded paying the higher rate of tax, or any extra taxes on what I own. It would feel wrong not to, actually. I feel privileged as it is, and hate to see people struggling. I have no idea how those people can sleep on their (metaphorical) gold at night
I suspect wealth hoarding is a kind of psychological or emotional disorder. Nobody needs all that wealth. It’s plain wrong.
Wealth is relative. Friends and ex-colleagues from the banking industry think I am poor because I only have one car and one house….. and even that house is in the countryside and not London. Once upon a time (pre-climate change awareness) I defined “wealthy” as someone who flys business class with their own money – (and I fail that test).
However, by any objective measure I am wealthy. Why? I got lucky!
Lucky to born at a time where the State paid for my education. They even gave me a full grant for university so that once I had completed my studies I had no debt.
Lucky to be good at sums at a time of Financial Market deregulation.
Lucky to see large cuts in income tax just as I started work.
Lucky to buy a London house in the 1990s.
Lucky to get huge tax relief from pension contributions.
So, I feel content to pay more tax and I don’t really care how it comes……
It was said that taxation was like plucking a goose – aiming to get the most feathers for the least hiss. This may be good advice to a revenue raiser but this approach in the UK has led to a pretty weird system… however, when considering what changes to make we must not forget it. “Politics is the art of the possible”….. and too much hissing makes it “impossible”.
So, all I would ask is that
(1) Tax promotes good behaviour and penalises anti-social behaviour,
(2) It falls more on those able to bear it and
(3) MOST IMPORTANTLY it must have a chance of adoption!
I think that means starting with
(a) abolition of pension tax relief at higher rates…. and then complete abolition. Wealthy people save anyway.
(b) Reforming Council tax to make it MUCH more progressive. Wealthy people all have lots of property!
(c) Equalising tax rates between earned and unearned income (ie abolish NI).
(d) Equalise Capital gains tax rates to those of income.
(e) Get rid of non-dom tax status.
It might be rational to raise inheritance tax but the public hate it (no idea why), a Land Value Tax might be good – but fiendishly difficult to implement. A universal Basic Income might be good – but it is probably too radical at this point. So let’s start with my list that I think is realistic (under a different Government)….
Thanks
And more anon… 🙂
“a Land Value Tax might be good — but fiendishly difficult to implement.”
It isn’t “fiendishly” difficult, save in the sense that all tax is difficult to implement, especially if it seems new. It isn’t new. Taxes were essentially based on land, until late in the eigtheenth century. It isn’t really a tax, but an annual rent. It neverthless passes the critical tests of a reliable tax: hard to avoid, easy to apply and cheap to operate. These are the tests that all the taxes that ordinary people pay every day. The failure of these tests is the reason that taxes become more expensive than they are worth, or are too easy to evade or avoid; or lead to whole professions who make fortunes ensuring they are avoided – to no go purpose to government, state, public, or community. Finally, if you wish to ‘tax’ or draw a rent from wealth, then land is fundamental, because so much wealth is tied up in it. Banks len first, and almost last on land. This is not an accident. It will never go out of date or fashion. It is going nowhere. It is, in a literal sense co-terminus with the State. The only extraordinary thing is that it isn’t taxed.
Agreed about the land tax.
I also think capital gains need to be looked at as well and maybe have another look at a financial transaction tax.
Can a tax be charged against money coming into and leaving the country?
Not easily under in ternational law right now
To quote from another source, environmental advocate John Muir said that he was better off than the billionaire E. H. Harriman. “I have all the money I want, and he hasn’t.” Essential virtue like this doesn’t avoid the need for society to organise to have a fair redistribution purpose within its tax regime. After all, an extremely unfair redistribution has been happening for a long time, we need to reverse it so yes, wealth taxation is essential as just one element of a fair society.
A wholly relevant insight
My wife and I are probably in the top 10% according to statistics. We would be happy to pay a bit more in tax, though I have to say I do feel a little uncomfortable in my seat when I read of proposed tax increases – is that hypocrisy, or cognitive dissonance or something?
We feel comfortably off and “wealthy” too in the sense that Rod White has defined it but also in the sense that because we have no debt and our needs are fairly simple – no long-haul holidays, no Chelsea tractors for status – we manage to save a bit each year. (a bit like Buffet who isn’t extravagant I believe)
The stats show that the majority of the population has little or no savings and quite large debts, too many have to use food banks, too many children are in poverty and never have a holiday, too many are homeless, too many are underpaid etc etc. So, yes, tax the wealthy and high earners more. For the ultra wealthy the tax should be designed to prevent further wealth accumulation.
But I can’t see anyone who would enact a really radical, revolutionary tax policy, I’m afraid – unless there was a real socialist revolution.
(if the rich pay less tax, proportionately, than those further down the scale, this will be accentuated when tax on expenditure is taken into account. The poor spend, while the rich save. This would imply that anyone who pays even a small amount of tax and has little or nothing left at the end of the year is paying more tax than they have left to save or pay down their debts, while the rich continue to be able to save or invest even after tax. That is unfair.)
Hah, this is almost impossible to answer honestly. If I were wealthy I would not be the same person. I would have inherited it or made my way through a system that requires me to be very selfish and competitive to become wealthy.
Then again, while I am not wealthy within my society, I am, by dint of being a Londoner, extremely wealthy in global terms. Thinking about that and considering how humanity needs to reduce its energy consumption and use of harmful materials, and all that “avoiding ecocide” stuff, I can honestly say that I would enthusiastically support a plan to reduce what my society consumes in order to both bring about an overall reduction and to allow the global poor access to more. Bearing that in mind, I believe I would be happy to pay more tax if that were making a contribution to the overall wellbeing of people in my society and the world.
In answer to your question Richard, all I can think of is in terms of the principles of paying taxes, not actual taxable assets (except of course to be taxed on any land that I held if I were ‘wealthy’ – long overdue but also housing).
I think that the wealthy need to be reminded of why we tax – all of the time – so that includes the benefits you point out in TJoT but also how tax acts as a cooling agent on the economy (and it is not justy interest rates or unemployment – or maybe not these at all – that help to control inflation).
Of course I’ve just had a very interesting discussion with the blog about how tax does nothing else but destroy money and control inflation. And that tax apparently is actually not needed to pay for anything at all in terms of Government spending. I will ask again, is this always the case (looking at your answer to Wilson Logan above).
I think that a more fundamental question of the wealthy is ‘What are you doing with all that the untaxed money you are storing?’. A lot seem to give it to the Tory party for funding! If the rich give political donations, then they should be made to donate the same amount to all the parties contesting an election in the name of democracy (a sort of ‘donation tax’).
There is no doubt that money is useful – we can see this when we do not invest in the country – from the state of its roads and infrastructure, hungry people, reliance on fossil fuels and unfairness in terms of money distribution (financial inequality – how we undervalue carers and those who look after us in some way).
The problem with the wealthy is that they just seem to want to accumulate money for accumulation’s sake.
Maybe we need a tax regime that rewards sensible and socially beneficial investment by the wealthy in their own country? If you want to make your country great again, there is no better way than to invest in it (but not in a way that shifts power from the commons or the State).
I base this dea on the fact that a lot of benefits the wealthy get through tax seem to not based on any tangible benefit to the country.
The idea of linking tax to virtuous activity’s being explored in Spain
My definition of being wealthy:
Being able to go shopping
Into the shop
Look round
And say ‘I’ll have it’
Meaning the shop. And paying cash.
And, getting back to the question: what is it that – if I paid increased tax – I couldn’t buy? (I don’t want a shop)
When there is nothing left to buy, what is the purpose of money, so why not pay it all in tax? (and on death, there is nothing more you can buy. so IHT…)
The more astute, aware the flaming torches and pitchforks are coming, are starting to realise they need a functioning environment in which to enjoy their wealth. Too much wealth, too much inequality creates social disorder. The impossibility of defending the Hamptons has already been noted. Sten-guns in Knightsbridge have been mooted. Self-interest then. They would rather live a good while and enjoy less but still relative wealth than die soon and probably nastily albeit in possession of wealth far greater. What use is wealth without life?
How much wealth is enough, how much is too much and how you got it are questions you could spend days arguing over but more important to me is what stage of wealth creation is each person at?
If you are you creating wealth either through working in the city, an artist or owning a business (or any of the myriad of ways) then the early years or “Growth” phase can see you acquiring wealth but also large debts and little cashflow / time to enjoy it.
Then later comes the “Comfort” phase where you slow down, release profits from the earlier phase and start to enjoy nice houses, cars, holidays etc. You are no longer driving to acquire wealth at the same speed although you continue to increase your wealth through property and businesses.
Then finally comes the “Retirement” phase where you have all the things you want (whatever that may be) and low / no debt, you tire of fast cars and spending money on vanity and showing off. At this time your wealth is probably more than you need in terms of everyday needs and it becomes about passing it to children.
Most of the time the people you see talking about being happy to pay tax on wealth are in the retirement phase or comfort, I don’t see people loaded with debt working hard in the growth phase stepping up to make that stage even harder.
Most people loaded with debt aren’t wealthy after debt offset
So unsurprisingly they’re not asking to pay more tax on it
I’d like to say yes, but I have no idea how I’d really react if I somehow came into wealth. I’d hope my principles would remain the same.
If I could have a roughly similar lifestyle to the one I have, that wouldn’t be so bad. People are worse off than me, in our society, never mind elsewhere.
So paying more tax, if I were financially wealthier, shouldn’t be a problem.
The problem then appears to be, to me, that above a certain level of wealth, this wealth gives a person influence over democracy. This is often used to reduce others quality of life, regardless of how much ‘wealth’ or ‘stuff’ the others want. This is wrong.
So, in this instance John Muir might have conditions enforced upon him by the government, that means he has to change his way of life. He has all the money he wants, but because the millionaire doesn’t, the millionaire influences government to use its powers to directly or indirectly make John Muir change his way of life to earn more for the millionaire.
This is how I see it anyway. Wealth taxes exist to stop the wealthy damaging others quality of life. It’s not about the difference in wealth or stuff, per se, but the influence.
You touch a very important issue – that wealth is about much more than money and might need constraints for that reason, which our society has forgotten
Huge wealth is neither fair nor equitable and, as noted, has a destructive influence on what we laughingly regard as democracy, especially in the US and UK. Page & Gilens analysed 1800 policy decision in the US and found: “If you observe the United States right now, you discover that the average citizen has no detectable influence on policy,” notes Page. “That’s not much of a democracy.” (in Pizzigati, Sam. The Case for a Maximum Wage)
They further undermine the polity by giving large donations to their favourite parties, funding think tanks to promote their interests, funding lobbyists to bend legislators ears, gain admittance to the inner sanctum of government through their connections and largesse, they fund “tame” researchers to discover “evidence” to support their prejudices, they donate to philanthropic causes to burnish their halos (and control these good causes), while at the same time working to undermine regulation that might affect their businesses.
“The think tanks, institutions, and organizations the wealthy underwrite shape and distort our political discourse. They define the bounds of what gets seriously discussed and what gets ignored.” says Pizzigati. Does anyone in the Murdoch press give serious credence to MMT, I wonder?
As Buffet also remarked, there’s been a class war alright and his class won.
The last is very true
And MMT is still at the ridicule stage
Can I just ask a question of the above contributors ?
How many of you are voluntarily paying more tax than you are legally obliged to at the moment ?
Thank you
What does your question mean?
If you mean are you maximising the use of all available deductions I have always paid more tax than required
I am…
I don’t claim Gift Aid on any charitable deductions made.
I don’t claim an allowance for WFH.
I give to charity because I want to. I WFH because it fits in with my home life. Tax is never the driver of that.
Why don’t you increase your charity donation by the amount of tax you are permitted to get back?
That way your chosen charity would benefit and you’d be no better or worse off.
Les McManus says:
“How many of you are voluntarily paying more tax than you are legally obliged to at the moment ?”
I did for a long time. Not out of a sense of public spirited generosity particularly, but it was easier for me to continue paying Class 2 National Insurance during my frequent but sporadic fixed-term contracts while I was contractually paying Class 1 than to have to remember to restart if I’d stopped being employed. I found it more agreeable to be self employed between contracts than to claim unemployment benefit and suffer the bureaucratic hassle of the job centre (or what ever it was called then), so I was losing-out on benefit (the equivalent of negative tax) aswell as overpaying.
Not a lot of money involved really, but then I never had a lot, I’d say I meet the criteria you are asking about – people for whom money is not the be-all and end-all do exist.
I suspect there are others contributing here with a broadly similar attitude, but I couldn’t say with certainty. I wonder how assiduous you are, yourself, in avoiding tax? Within some social groups you would be considered stupid to pay a penny more than you can get away with and peer group pressure is very persuasive; avoiding tax is almost an article of faith it seems.
I would be happy to pay more if I was wealthy – whether that it is relative or absolute, if the system was fair for all and free from abuse.
I wouldn’t be happy to pay more tax if my next door neighbour earned the same amount but paid themselves less by paying themselves large dividends.
I wouldn’t be happy to pay more tax if my school friend earned the same amount but based herself ‘offshore’ and claimed he wasn’t domiciled or ordinarily resident.
But until all the loopholes/discrepancies are cut away then it will be difficult to do.
Interesting….
I wonder if all those self employed people who took dividends out of their psc instead of salary will think twice post covid as they couldn’t claim the same support as they could have done.
My desire would be for a society that doesn’t have
1) Homeless people living on the streets
2) Drug and alcohol dependent people left with no treatment
3) An education system that deprives the poorer elements of society from receiving the same educational standards as those at Public Schools
4) Children having to live without a permanent home and not being able to be fed properly.
5) A system that does not provide a decent living wage for all those who work and prioritises some occupations at the expense of others in a perverse way.
6) A health system that provides for those with money but not for those without.
There are others I am sure but the above should be a priority for any government and should not be beyond the capability of a caring society.
The question of additional taxes is – will the provision of the services needed to cure the above be inflationary? If the answer is yes and if I were wealthy, which I am not but at one stage for a brief period I would have been considered so by virtue of my income then yes I would have been prepared to pay more tax to alleviate those
problems.
I think it incumbent on governments to set out their plans and to take steps to achieve them. Their view should be, this is what we want to do and in the event that by taking these steps to make life better for the poorer parts of our society inflationary pressures build up in the economy then yes we shall increase taxes to tackle that problem and that taxation will fall on those who are better off and who have benefited from the life provided by living in this country.
Thanks
Simon
Regarding your 1 and 2, I have spent many years, paid and voluntary, in trying to help street sleepers. Many cases are intractable because the individual has made a lifestyle choice and prefers street sleeping to a hostel where s/he would not be allowed to take drugs or get drunk. I can assure you that most people who sleep rough soon receive offers of help.
My point about 2 is yes addicts do chose to sleep rough because of their addictions. That doesn’t mean we or they have to accept their addiction if adequate help and support is available. There will always be some who cannot escape the clutches of mental health issues or alcohol and drug dependency but that doesn’t mean as a society we should abandon them as hopeless.
Here’s a thought – wealth in itself doesn’t have to be taxed – because lets face it we cannot even get a progressive agenda into government, let alone start wishing about wealth taxes – But – Inheritance should be taxed to death. 90% Inheritance tax should be a normal mandatory thing – and i could use the same argument as people on the right use.
Inheritance is the ultimate handout.
By sheer accident, i was shot out of a womb and before my life even begun, was given a certain set of circumstances – granted, luckier than over half the planet.
Also by sheer accident, a baby was born into a wealthy family, and immediately has a massive head start above everyone else – that baby did nothing to earn that merit.
I think it would be absolutely fair that all inheritance is taxed at a huge rate – some large % of the market value of the assets. If theres a wealthy person who can leave, say, 2 houses to a beneficiary, the tax sum should be large enough that it forces that beneficiary to sell the asset to pay for the tax.
So – have as much wealth as you want, whilst you live – but know that it can’t be handed down, apart from some nominal sum, say, 10 years*average cost of living in the UK, which would be a sum of rent, bills etc…£10k a year lets say, depending on location of course.
pretty good idea eh? Totally fair, it means no one gets an unfair advantage in life, and we can adopt the same right-wing ideology.
The fairest way to tax inheritance is as income when received
A lifetime limited could be allowed
But it should not be massive
Not a lot of the comments actually answer the question. Are too many actually wealthy and don’t want to face up to the fact or just lacking in imagination?
In a small business I run nobody gets less than a bit over the Real Living Wage, (not Osborne’s fake one). I couldn’t look myself in the mirror if I was paying anyone the minimum wage. I know a lot of people paying the minimum because that is what eg all the other coffee shops pay. If it was a statutory requirement to pay the wage prices would go up a bit but the playing field would be fair. I get annoyed at all the big companies who essentially get a sub from the taxpayer. If the Real wage was introduced all the extra would go back into the economy which would have a positive effect.
I am certainly not wealthy but if I was I am reasonably sure I wouldn’t mind paying more in tax but like a previous correspondent I too would like a level playing field where tax cannot be avoided.
I think the point about tax justice really interesting – and to build on
Appreciated – I do learn from these answers
Equity in tax is surely fundamental. Unless there is justice in tax, and that means transparency, which is a necessary condition for tax justice; then the tax system is being undermined, deliberately maligned at its heart.
The existence of tax havens, and other legal obfuscations that undermine tax transparency are not just wrong because they allow the tax to escape, but because I believe they are deliberate policies with a bigger and permanent political purpose; the deliberate policy to compromise the system; to make taxation seem unavoidable, but essentially unjust. So we have governments who do not really want an equitable tax system, but one that clearly does not work well or work for all. This ensures a tax-hostile polity; and that is the end game of Conservatism.
It becomes obvious to allin this tax-unjust system that not just tax payment, but tax transparency is easily compromised, and this literally changes the culture. The culture becomes not just that tax avoidance is possible, but it it is a duty to self, because equity in tax is already compromised. Of course the Government will claim that fairness is their goal, but the difficulties are just to great to fix. Let us be clear. This is simply hypocrisy.
This unspoken but endemic culture ends with governments relying on taxing at source and in ways that tax is impossible to avoid, and paid principally; but only by those who cannot find a way to escape (principally PAYE and VAT); and know they are being ‘ripped-off’ by those with the capacity to undertake systematic tax avoidance.This inevitably brings the tax system into disrepute, and that is itself deliberate. It sets up the public, popular assumption, and resentment that people are being over-taxed (and ordinary people often are), and that tax is itself an unjust penalty exacted by Government on personal effort.
This is a far more imp[ortant political weapon in Britain than mere party policy. If this proposition was false there would be a great deal more effort to fix it, and some at least, or even most of it would and could be fixed: it isn’t. The effort is zero, save as window-dressing, because it is all just to difficult,
I am working on a whole programme for tax transparency funded by the World Bank right now….whether it will come to anything who knows….but it is part of the day job that has to be done around here!
Misinformation is so easy to manufacture – as other posts make clear today
One further point in this argument is that some on the far right argue that untaxed income is “our money” and that taxation is “theft”. (Just the other day someone said this in an FT Comments section – but was ridiculed)
It’s common the tax profession for this to be said – including by senior lawyers
The older I get, the wealthier I get (as money seems to breed money if handled well). The other change I have witnessed is I become more of a socialist, more community minded and more aware of the shocking injustice on the planet. Therefore I fully support the wealthy paying their way and not hiding money away offshore. I’m sorry this doesn’t seem to be the way the majority think and wish it were different. I’m far from being a saint but for me it has seemed a natural progression to share good fortune.
If I was wealthy…..no I wouldn’t want to pay more tax because the government wastes what I let them have anyway.. yes, tongue in cheek, but variations on that theme abound and I would join them. Would I pay more tax if you made me – well, yes (doh!). Would I start looking to avoid it – well, yes.
But then you knew all of this anyway.
I think Land Value Tax (LVT) is a good method due to the ability to identify it and value it (to a large extent). There is probably a lot of land that is not registered, but which could be dealt with by a compulsory registration system over a period of years. Also, a low level of tax initially, would help to bed the system in.
For those advocating higher levels of IHT – think again, this tax is much avoided, often through the use of trusts. At the higher value level, trusts are almost always used for tax avoidance. South Dakota has a lovely scheme for those who are interested…! The answer may be for compulsory registration of all (non bare) trusts regardless.
I would probably advocate lower levels of IHT, applied more widely with fewer exemptions. Enough to make people give away more in their lifetimes but low enough to not be an unhappy burden on the elderly. IHT does cause many to be unduly worried in their later years and seems to serve only the tax avoidance industry.
LVT it is then!
I would certainly want to pay higher taxes.
To be rich – say in the top 0.5% – one has to have ‘passive income’ – the euphemism of choice of the rich for unearned income, economic rent – or a big inheritance. Unearned income should be taxed at least as much as earned income, in fact, where it can be taxed at a higher rate than income tax without causing problems (e.g. negative equity, pension problems), then it should. Why? Because it’s something for nothing and the only way you can get a free lunch is at someone else’s expense. It’s both unethical and economically dysfunctional.
We also have to curtail luxury consumption and the emulation it encourages if we are to stand a chance of stopping global heating.
If i were rich and taxation remained the same as now I would want to give away a significant part of my income to organisations combatting inequality and promoting green investment. Otherwise I couldn’t live with myself. (I do already as I’m in the top 4% and can live well on much less than my income.)
Thanks!