My old tax justice friend Prof Prem Sikka is now the Noble Lord Sikka, having been sent to the Lords by Jeremy Corbyn. Last week he said this in parliament:
Let us be clear. The Government can create any amount of money they wish to shape a society which is good for all of us. If that money creation is inflationary, they can remove some of it from the rich through redistribution.
He was absolutely right.
That is, of course, modern monetary theory in a nutshell.
And it also makes clear why we should both create money and use tax to correct for imbalances in society.
It was an incredibly precise and appropriate intervention for all those reasons.
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Well done that man!
What if the rich refuse to allow the government to redistribute their wealth by buggering off abroad?
They never do
They say they will but don’t
Since that’s the evidence I totally ignore the threat
It’s funny how often this exchange has occurred on your site. You say the rich never leave, someone supplies a list of the many who have and you say they “don’t count” or ‘good riddance to them’.
Lewis Hamilton, Jenson Button, Stelios Haji-Ioannou, Philip Green, Phil Collins, Joe Lewis, Ken Morrison, the Rothermere family, Edward Lumley, Donald Anderson, the Ashley family to name but a few high profile case.
This is, of course, evidence but evidence you choose to ignore because it doesn’t fit your agenda. And of course, when these people leave, they don’t just take the ‘extra tax’ which a government is trying to squeeze out of them, they take all the tax they were paying. When Lewis Hamilton – on £50m+ a year – leaves, he takes all of his money with him and it takes the tax from the average salaries of nearly 4,000 workers to make up the difference.
I look forward to you again claiming “the rich don’t leave” in a few months time.
You may have heard that exceptions don’t prove rules
They never do
What you also need to realise is that they don’ take their ko0ney with them – what is invested here stays here
And you also need to realise is that we are really not dependent upon their tax – that is another fiction that the likes of you seek to promulgate that is not true
Try getting something right one day, I suggest
You failed today
It grates on you that Sikka made it to the Lords for an easy meal ticket and you didn’t..John Mcdonnall is on record as saying it was your request although you no doubt deny it. Maybe you need to go on record to call him a liar ?
I would really rather not be a member of the House of Lords – and walked away from being so when they worked on the idea for several months, or so I was told
I am not the slightest bit jealous of Prem – sho seems to be doing a great job
Probably for everyone buggering off abroad they are replaced by at least 10 Russian oligarchs or Middle Eastern oil potentates.
But surely the rich have their wealth vested in trusts and companies offshore per Panama/ Paradise papers. I can’t see how redistribution on the scale suggested can work until this is tackled. Land Tax anyone?
land tax will not in any way solve this
It could help
But only a bit
Let’s get real
An to add to the reality – tax abuse by the rich is important – but way, way less than it was. It is being beaten. The tax justice people who say otherwise are doing so to keep themselves in work. The big issues now in tax justice are elsewhere
Lord PremMMT!
I am appalled by the ignorance behind this irrelevant conversation about where the rich live!
Firstly, tax liability is based on domicile, which is not the same as residence and is freely manipulated to suit the circumstances of the wealthy, who invariably owned multiple homes in multiple jurisdictions.
Secondly, suggesting where they live is relevant to tax take suggests a belief that we need tax before we spend! Extraordinary that someone with that belief should read this website!
Thirdly, the relevance of the wealthy is their assets, not their income and their assets are locked up in land and commodity investments of innumerable types. Richard has explained that this investment is wholly unproductive and plays no part in the real economy. The wealthy are entirely adverse to investment in the real economy because they perceive it as too risky and, above all, incapable of producing the returns they seek.
Where the wealthy live should be a matter of supreme indifference to us all. Of course, we would miss out on their generous, loving attitudes to humanity in general, but I am confident we could learn to cope with this tragedy.
I am not sure I agree with your characterisation on domicile….
It doesn’t matter where the rich live. They are by and large an irrelevance to the well being of the populous of this country.
If they remain in the UK they may spend a small proportion of their wealth here. They may pay some tax on their worldwide income which they won’t do if they are overseas in Monaco but the removal of cash from the UK has little impact to the economy.
If the super rich choose to live abroad they can’t take and spend sterling. They have to find someone else to swap it with for euros or dollars or whatever currency and that relies on the person taking that sterling wanting it to spend in the UK. There could be an exchange rate effect if not many people want sterling because they don’t want our goods and services but there probably aren’t enough rich people to actually have an effect.
What would cause real damage is if some idiot tanks the economy and the real productive workers have to leave because there are few jobs as has happened when young workers flee their home nation to find work.
No the rich may be annoying but their usefulness is vastly over rated.