The Wealth Tax Commission has said a one-off wealth tax might work to redress balances in the UK economy and to raise substantial sums to address the national debt. But we don't need to address the national debt. What we do need to do is redistribute income to those who need it. In this video I explain how that could be done on a recurring and not on a one-off basis. It really isn't hard. It just requires political will.
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The fact that these discussions are being had is good. Ironically, (as you say) it is the “who pays?” question that is allowing this to be mainstream.
At a practical level, all the changes you outline are “easy wins” – well, easy compared to getting a wealth tax introduced. All should be adopted.
Tactically, I think the headline should be “Abolish National Insurance!”. Clearly, this would mean the Income tax thresholds and rates would need serious adjustment but let’s lead with the “good news”. Given the employment outlook right now this getting rid of this “tax on employment” would gain traction. If we throw in all the additional revenue from abolishing reliefs, equalisation of Income/Capital taxes, reduce Corporation/Personal tax differentials etc.. do we have some estimate of what the “new” basic rate of income tax would be (assuming fiscal neutrality)? I suspect it might not be as scary as one might think.
With regard to a wealth tax. If it is the way we go it should include everything – no exemptions. Excluding various items will encourage avoidance and create distortions – many of which we will be unable to predict. An obvious example is that if you exempt homes people will save by buying bigger and bigger houses which would inflate the housing bubble further. No, EVERYTHING should be included. If this creates cash flow problems then allow payment over 10 years secured against the value of those assets. In short, if you can’t afford a big house then move.
That is the Wealth Tax Commission approach
They thought about trusts too
I read much of the report but on a practical level, as they note, exemptions will make wealth taxes impotent and unfair. There isn’t a political party that won’t be susceptible to ferocious lobbying to exempt this that and the next thing, into which money will flood. The gang of crooks currently still called the Conservative Party will never introduce a fair and equitable wealth tax. And that’s the way taxation works right now – exemptions galore.
I agree with all of your suggestions, however, I have lost count of the years we have heard these arguments. The power of the wealthy lobbyist in underrated.
To me, and I know I have said it before, it is OECD report saying that the UK lost 9% of GDP due to inequality. That’s a serious amount of money (£126 billion), for what? We already know, from UK business collapses that the absurd remuneration paid by our large companies is underserved and too many of our leading businessmen are paper tigers. Furthermore, the research out their pointing to the lower performance for higher remuneration has done nothing to stem the flow. For example, it is no surprise that it is bankers who fund 50% of the government party while they are quietly pocketing £23 billion a year from seigniorage. This year, the total of outstanding bank loans – created at a cost to the banks of nothing – is £1.4 trillion; and at 2% interest, that’s £28 billion a year.
Hello Richard
If this wealth tax report is getting coverage in the mainstream media, then this would be a good time for that same media to report on what you say in this video.
Any approaches from anyone? Maybe it’s already happened and I don’t know about it. You mentioned something recently about speaking to a journalist about MMT.
Great video. Very clear. One I can share with friends and family who wouldn’t otherwise hear or read about this stuff in their daily lives. Thanks.
Thanks
And no bites.