The exponents of wealth taxes claim that they're a great way of raising additional tax revenue. They forget just how hard it is for anyone to work out exactly how much they are worth. Such a tax would be an admin nightmare, and there are much better alternatives available.
This is the audio version:
This is the transcript:
How much are you worth? Now, I don't want you to tell me. Let me be clear about that, but I'm asking the question for a very good reason. There are lots of people who now think that we need a wealth tax in the UK. To impose a wealth tax, you need to know how much people are worth. So, I want you to think about how much you are worth, and I mean down to the very last teaspoon that you own.
And there's a good reason for making the example sound as ridiculous as that because if we are to tax the ultra-wealthy, and their teaspoons are made of solid gold or at least solid silver, they're going to be of real value. So, we can't exempt your teaspoon that might have come as one of a pack of eight for a pound from Tesco's because we don't want to provide that exemption to the ultra-wealthy because their teaspoons might be worth a great deal more.
And if you think about the exercise of valuing everything you own, you are not only estimating its value, but proving its value with documentation, which is what you would need to do if you were to impose a wealth tax because tax is not imposed on estimates. Tax is imposed on proven data. Then you would have to literally value everything down to your last teaspoon with a receipt to prove just what the value was.
The moment you begin to realise just how difficult that is, then you will begin to appreciate why I have concerns about imposing a wealth tax on the very wealthy in the UK. Because let me be clear, I didn't choose the teaspoon example purely randomly.
We can prove pretty much how much a teaspoon will cost in most situations, except of course there's ultra wealthy limited edition special production, one-off teaspoons that the ultra-wealthy own. And there we might have to go to get a specialist valuation.
But that might be true for very large amounts of what they own. For example, every picture that they have, maybe every car in their collection or the wine that they own, and what about their racehorses or their yachts or whatever else it might be, even their properties?
If you own a property, there's a good chance that Right Move or Zoopla will be able to provide you with a pretty good indication of what it's worth in the UK. But when you own something rather more esoteric, that's unlikely to be the case.
Now, what this all suggests is that trying to impose a wealth tax would be the creation of an administrative nightmare. An administrative nightmare as well, not just for the very wealthy and those who have to prove that they're not very wealthy and therefore are not subject to the tax - and there will, by the way, be many more of those than there are the ultra-wealthy - but it will also be an administrative nightmare for the tax authority that then has to wade through all this data and decide which of it to accept and which of it to challenge, and how much it wants to spend on that challenge. Because after all, if it challenges a person's valuation of their own wealth, that presupposes that the tax authority will be getting an alternative valuation, which they can use instead.
Now, this is what I am so worried about with regard to a wealth tax. If you really try to value everything that you own - not just the bank account, which has a number against it, but as I say, everything that you actually physically possess down to the last teaspoon - you'll find that it is nightmarishly difficult.
And you will find that agreeing the valuation of many things with HM Revenue & Customs is also nightmarishly difficult.
This is one reason why it sometimes takes so long to agree the valuation of an estate for inheritance tax purposes.
It's also why sometimes it's very difficult to agree the valuation of some assets which are gifted within families, because quite simply, there is no market value that one can find for whatever has been gifted because it is unique and therefore it's all down to negotiation and negotiations take time and create room for disagreement and lots of cost.
A wealth tax is, as a result, an incredibly inefficient way of collecting tax from the wealthy.
I say that because there are much more efficient ways of collecting tax from the wealthy.
For example, we can simply charge national insurance at the full rate on all the income they get from their work.
We can impose an equivalent charge to national insurance on all the income they get from everything that is not from work, whether it be interest or rents or dividends or distributions from trust funds or whatever else it might be.
We can equalise the rate of their capital gain tax charge with their income tax charge instead of giving them the discount that they get at present.
We could just keep going. There's a whole list of these in the Taxing Wealth Report, which I have prepared, and which was published nearly a year ago now, but which remains completely up to date with regard to the relevance of its ideas.
My point is that the data for all those tax charges is easy to collect because in a sense, it's all already on the tax return. And what is more, charging those taxes will collect considerably more in tax revenue than I have seen anyone suggest that a UK wealth tax could raise.
My suggestion is that we could raise up to £100 billion of extra tax from the wealthy each year, although I think it pretty unlikely that any government would want to do anything of that amount, so in a sense, I've just provided a range of choices. But the point is from those choices, a government could select any number of options to create additional revenue if it thought it needed it, whereas when it came to wealth, tax estimates vary from between £10 billion and £20 billion a year, vastly less than the amount that I suggest that it is possible to collect. And yet, my version of this tax charge is vastly cheaper to administer and subject to much less dispute than anything that a wealth tax might be subject to.
So what would you prefer? The requirement that the Revenue might actually ask you to value everything that you own to prove that you don't owe a wealth tax, because that, after all, is within the range of possibility. If there's a wealth tax on some, everybody could be asked to undertake a wealth valuation to prove they're not subject to that charge.
Or would you prefer that we use the data already on the tax return, but increase the tax rates on the wealthy?
One of those options is easy and leaves you in a certain position because most people who are going to be watching this video will not be subject to a wealth tax, however one is planned.
Or would you like that wealth tax with all the costs imposed?
Your choice, but I'll tell you which one I prefer. I prefer to increase the tax rates on things that are already on the tax return because that's easy, it's certain, it's cheap, it's fair, and it raises more money.
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KISS (keep it simple stupid) seems to apply. A wealth tax is getting way ahead of ourselves. There are much easier and simpler taxes that could be applied first. Only then should we consider whether a wealth tax made sense.
I like Richard’s suggestions for simpler taxes, both in this blog and his excellent taxing wealth report. In general it seems sensible to eliminate tax reliefs that only benefit the wealthy; why do we have these. To this end it would make sense to amalgamate NI and income tax and apply it to all income. This effective includes some of Richards suggestions here. Then there are low hanging fruit like limiting pension tax relief to the basic rate and capping the tax free amount held in ISAs Why should an ISA millionaire be getting tax relief?
Richard suggests that we would not need £100billion that we could raise from taxes on the wealthy each year. I beg to differ. At the moment governments seek to balance their books. This is wrong because more money is needed to offset inflation and growth. With inflation of, say, 2% and growth of, say, 2%, then we need 4% more money each year. In the UK’s £2.5 trillion economy this amounts to £100billion, which we could raise from the wealthy.
I agree a wealth tax would be unfeasible, the easiest options, as you say, are the ones to go for, especially if the information is already provided. There are, however, historic injustices that have led to concentrations in wealth and its ongoing concentration that needs to be addressed. Wealth needs deflating, for instance, no one should be a billionaire, the purpose of society ought not to be extraction and exploitation. Same with land, 6000 families (including the Windsors) own 2/3 of the UK. That is indescribably egregious. Whilst an overall wealth tax is pretty absurd, govts can always introduce specific taxes. No one needs a 10,000 acre estate, we need to introduce limits to ownership and consumption (as George Monbiot and Wolfgang Streeck have noted, we have a system of unfettered consumption, with billionaires consuming as much as a million times the global average citizen). Inequality is so vast that it has become incomprehensible, and we’re so used to living in such a degraded world that we can’t see the damage – from people working in toxic, non-mutual hierarchies where much labour only benefits a small number, through to the poisoned air we breathe and the bombardment of corporate advertising, conceptually distorting what it means to live and be human. There are manifold problems, however, specific charges on particular wealth seem feasible (council tax is an example of an admittedly horrendous and regressive system, but that hasn’t led tomit bring abandoned). Land could be taxed as forfeiture until a much lower maximum is reached, and clear expectations about its s use for the remainder to address the historic and ongoing injustice and rentier abuse of people via lnd accumulation. However, an overall wealth tax is unweildy.
You tackle other issues, and I agree they need urgent attentio0n. But tax is not the way to deal with that.
In other words: what works & what fits with the way HMRC does things at the moment & gets max bucks for minimal effort.
Good blog.
I totally agree.
However, you continue to reject the one tax that is simple, fair and impossible to avoid: Land Value Tax.
It can’t solve everything (as the site, landvaluetax.co.uk, makes clear) but it is a lot better than the alternatives (also covered on the site.)
It is also currently being considered (literally today in Portcullis House!) by government as the best method of Land Value Capture.
I support many of the things you propose even though some will be politically impossible. LVT is politically possible if implemented properly – also covered on the site, which, by the way, doesn’t even mention that chap George!
Please have another read (because it isn’ t what you think it is based on the last criticism you posted) – your weight behind LVT would be incredibly helpful.
LVT might be a better basus for a council tax than the system we have, and I say might with god reason.
Otherwise the suggestion we use LVT is absurd: not all value is based on land and it is crazy to suggest it is.
I will never lend support to a large scale LVT – it cannot suit a modern economy and will ceate serious injustice because the burden will always actually fall on tenants and owner occupiers and not landlords, massively increasing inequality. LVT supprters always deny this. Why?
Richard Murphy wrote:
“the burden will always actually fall on tenants and owner occupiers and not landlords”
The linked LVT site has a relevant section in it’s FAQ:
“Will landlords pass it on as rent?
They will try but as freeholders they cannot pass on the responsibility for paying LVT.
Market forces will determine what happens. If rents become too high landlords will have no tenants and no income – so they will sell houses on the open market for others to buy.”
https://www.landvaluetax.co.uk/faqs
Keynes also made a similar claim, IIRC.
Oh, for heaven’s sake, let’s stop being silly, as so many on the left are capable of being
If there is an LVT and no income tax and national insurance will rents be able to increase massively? Of course.
And will people still need somewhere to live? Of course they will, so they will have to pay unless you are proposing mass outward migration of euthanasia instead. Is that part of the plan?
And will the taxes on the wealthy fall? Of course they will. They actually occupy, in proportion to income, less land than the poor (note – I say occupy, not own).
As I have said elsewhere in the comments this morning Henry George did not understand this, or how value is generated, and every single person who has followed in his footsteps ever since on this issue has got their economics wrong, unless that is they seek promote gross inequality and the cause of very small government, which would be the inevitable consequences of such a tax in the form you suggest. Please do not waste my time with this issue again. This blog is dedicated to creation of economic well-being for all, and an LVT is dedicated to its destruction for all but the very wealthy.
Richard
I have read your report in full, every word and, while I agree with almost all of it I recognise that much of it is politically impossible. I don’t call it “stupid” or “absurd” (because it isn’t- and I don’t like calling names – I leave that to Musk and Twitter) I just recognise that it won’t happen.
Yes, landholders (urban and rural) will try to load LVT onto tenants (though, as freeholders, they are the ones who have to pay it – no more searching for “the occupier”) but there is only so far that you can push things in a market.
The site covers those things that also need to be done – for example, the compulsory purchase of land for social housing.
LVT alone cannot create a fair society, but it can go a long way towards showing people that a governments understands and wants to do something about our grossly unfair distribution of wealth.
I don’t believe you have read the site or the objection handlers – but I could be be wrong, as I so often am.
I’m sorry, Mike, but you are wasting my time. The fact that you suggest that an LVT will work because freeholders will have to settle the liability shows how naive is your approach to this issue. Legal liability to pay taxes does not matter. What does matter is where the incident falls, and this will always be on the occupier of land in the case of an LVT. Henry George did not understand this, or how value is generated, and every single person who has followed in his footsteps ever since on this issue has got their economics wrong, unless that is they seek promote gross inequality and the cuuse of very small government, which would be the inevitable consequences of such a tax in the form you suggest. Please do not waste my time with this issue again. This blog is dedicated to creation of economic well-being for all, and an LVT is dedicated tot its destruction for all but the very wealthy.
Richard,
While I was never a proponent of a wealth tax you have made many very compelling arguments against it.
May I add two examples against
Some years ago Simon Cowell sold a property he owned in London for significantly less than the original asking price. But of course as you point out it was pretty much unique and he wanted it sold so you cant turn round and say ‘but next door went for £x last year as there wasnt a comparable ‘next door’ or a queue of potential buyers.
Now dont laugh please but about 30 years ago I got a surprisingly large amount of money for my elderly Maestro, far over ‘book’ when someone ‘rear ended’ it. I argued successfully that as it had previously been my parents car before I had it for a good few years it was a ‘known quantity’ whereas a ‘banger’ which was all the insurers originally offered to pay for could very easily turn out to be a complete dud.
So, yes ‘value wealth’ at your peril and thats before we get into jointly owned property, commercial property anyone etc
Thanks
Ha!
What a question. What am I worth?
Well, I think I’m worth caring about ,and that applies to the majority of people too.
I like that.
I think I touvh on that theme quite a lot.
If someone holds an asset then they can gain compounded returns to that asset until they dispose of it. For tech leaders that can be the vast majority of their wealth. That can give them a significant advantage in wealth escalation because they’re not paying any dividend tax or income tax on that, and only capital gains on disposal, making their tax rate much lower than others.
Adjusting capital gains may help, but it wouldn’t eliminate the compounding benefit, so there is a question remaining there.
If you disregarded assets purchased for less than a certain value, particularly for personal effects or furnishings, that would significantly reduce the amount to value. This might be on a purchase price generally – a contribution in the right ballpark being better than none at all, especially if considering cost of enforcement.
That still leaves putting a value on art (making declared value usable for any insurance claim might help discourage excessive under-valuations?), company shares (which might need to use public valuation events for pre-IPO shares – e.g. funding round share prices), and more, so I agree it’s not easy still.
Oxfam is one of the big proponents of a wealth tax https://www.oxfam.org.uk/media/press-releases/richest-1-grab-nearly-twice-as-much-new-wealth-as-rest-of-the-world-put-together/
The difference between the effective tax rates of the richest and moderately well off people is stark. It’s higher in the US than the UK, as is wealth inequality (IIRC something like 30% of US wealth held by the top 1% vs 10% in the UK). A 1% tax on the top 1% in the UK could raise around £15bn/year on that basis, so rather less than the £100bn available from the means you outlined. A 1% tax on the top 10% (approx £3.1m or more in assets) could raise around £75bn.
These are not, admittedly, sums that would transform the economy for everyone, but they are sums that could help stop the cycle of austerity. Opponents of a wealth tax regularly argue it would harm growth, but austerity measures also harm growth, so the question is how that balances out.
I would argue that with HMRC we have a general process for administration of accounts which is based around forcing the largest to have their figures audited each time but only auditing a sample of others. A similar system would be likely for wealth taxes. Again, that’s about minimising cost of administration (and cost of compliance for individuals) balanced against absolute accuracy.
I’m not saying we definitely should have a wealth tax, and your points about alternatives are quite valid. What I do say is that the experience of the past decade and more is that further austerity is not the answer. It’s clear the wealthy do not pay their share, and it’s time the range of options – potentially including a wealth tax option along with those you’ve outlined – are outlined with what they could raise, who they would effect, why it’s fair to affect them, and the other pros and cons of each option.
You are ignoring the fact that I show there is something better than a wealth tax – which is to tax the income and gains from wealth more.
Excellent and very clear explanation of the problems of collecting a so-called ‘wealth tax’ and the implications it would have for everyone (most of whom – not wealthy – would not be liable, but would have to prove that to HMRC). The teaspoon example is brilliant!
I suspect the vague term ‘wealth tax’ is widely mis-used and mis-understood.
Hopefully this video, which explains very clearly the difference between a tax on wealth and taxes on the income of the wealthy as proposed in the Taxing Wealth Report will be seen and understood by many people beyond the readers of this blog.
I feel things that the super wealthy purchase should be taxed more, or no tax relief given if purchased through their company. Does a company really need a Rolls Royce tax free? If their core business is chauffeuring rich people in a Rolls Royce, they can simply up their prices to factor in the extra cost as the super wealthy can afford them. Same with private jets, luxury watches, properties costing over, lets say, £5m. These may be naïve suggestions as I’m not economist but my limited understanding is that a lot of “luxury items” are purchased with tax breaks. Oh and one more thing, lets reintroduce the bankers bonus tax too. When I working at a well known investment bank (in a support role, not as a banker/trader), the average bonus was £120k! (I left before I could receive a bonus as the culture wasn’t for me).
These things are not tax free, to be fair.
They are subject to benefit in kind tax charges. They may still be subsidised though.
Another practical problem with wealth taxes is ability to pay. It’s quite possible for people of modest means to own artifacts of considerable value, maybe heirlooms passed down through generations (see Antiques Roadshow). This doesn’t mean they have the disposable income to pay a tax on these things year after year.
Or an extreme example, someone has a dusty old painting in their loft, and gets it down to show someone who knows a bit about art. This person says “OMG, that could be a Monet, you should get it valued”. So they do, and it comes back with a value of £1m. How do they manage to pay a tax on that?
In these cases, the owners would probably have no option but to sell the valuables, to be bought by already wealthy people who will likely gain from prices of such things rising faster than inflation, thus again funnelling more wealth upwards, while depriving the original owners of objects of sentimental value.
And if the owner of the painting managed to keep it and pay the tax, and then a subsequent valuation declared it a forgery (such is the capricious nature of the art market), could they claim a refund from HMRC?
So I agree, the whole concept of wealth tax is utterly riddled with contradictions.
Rick
There are two issues here.
First there is never a problem to pay. Payment can always be deferred until sale – presuming the asset is something like a home.
Alternatively, you picture was in the loft. So, no one looked at it. What is the problem with selling it in that case? Sell it, pay someone to paint an excellent reproduction, hang that, have a good story to tell abnd pay off the mortgage and more.
Shall we get real in that case? This is never actually an issue, is it?
And just watch Antiques Roadshow (I hate the programme) and see what happens if the heirloom is worth £40. They lose interest. All they want is the money.
I am sorry – I see no issue.
Richard
Well, it’s not actually an issue at the moment because such putative wealth tax doesn’t exist.
But in the thought experiment of the painting, maybe it’s not in the loft, but is Grandma’s old picture hanging in the kitchen. For a lot of people, things have surprising sentimental value, and I would still argue that selling it moves wealth upwards, because the long-term value of the artefact is greater than the long-term value of its current price. Hence achieving the opposite of the intended effect.
In any event, I think we both agree that direct taxes on wealth are not a viable proposition.
We’ll have to disagree, largely because I can so no logic in your argument. We tax the real world, not sentiments or hope values.
But we agree, anyway, on the bigger picture.
The best is the enemy of the good.
Frankly, I am not sure about the theoretical merits of LVT or wealth taxes… but I am sure that they are just that – “theoretical”. By all means, feel free to discuss and hone suggestions for ways to implement these taxes in a practical way… but in the meantime, can’t we all agree that the suggestions in the Taxing Wealth report are (a) a substantial improvement on what we have and (b) deliverable “at the flick of a switch” within the existing HMRC framework?
Thanks
Your point (b) is, by itself a winning argument
Richard.
Dale Vince and the Patriotic Millionaires are calling for Wealth Tax’s, have you tried contacting them and sending the Taxing Wealth report?
Its interesting that while the advocates of Wealth Tax’s & LVT treat them a bit like The Black Draft, a strange concoction doled out to Sailors that cured all known and most unknown ills, Andy Wightman – sorry Andy but…… calls for both LVT and at the same time Compulsory Sale Orders for abandoned land and property rather than Compulsory Purchase orders because unlike residential property valuation of Commercial Property where the market is not that liquid is quite problematic.
If I was to make a suggestion though what about replacing Business Rates with a tax on leases as most commercial property is leased. Owned and empty property would still have to have a tax based on lease values but I suggest it could be a more straightforward alternative to business rates oin particular as in most cases it will not require valuation..
I have spoken with Dale and many other NGOs on this.
John Christensen and I both had to eventually give up on tax campaigns run by NGOs – some of which we started – run by people who had not the slighetst idea how taxes work inclusing the development NGOs and almost all the tax justice organisations. They are almost all clueless on how tax works as almost none have anyone who has worked in tax at a senior level in them. They campaign as headless hearts, not as reasoned analysts. The worst of them are not looking for solutions, in my opinion. They are looking instead to perpetuate their own jobs.
Exempt everyone who’s wealth < £10m. The rest use the rules of Probate and self certify. Perhaps then use bands like Council Tax so it doesn't need to be that accurate.
I do accept though that equalising tax rates, removing tax relief on pension contributions etc as per your report is preferable.
Have you done probate valuations?
And, you do realise any cut off requires that people prove (not guess) they are the right side of it?
I have been involved in a few most recently my father’s. I know I am risking irritatng you by labouring this but it would all be self registering with harsh penalties for those acting in bad faith. Those at the margin should be cut some slack.
My final point on this is that I believe it is doable but equalising tax on labour income and asset income is the first priority. Then reducing the vast amount of reliefs, notable on pension contributions. A Wealth Tax probably wouldn’t be necessary.
Thanks, Richard, for making it clear why a wealth tax is more or less unworkable to administer. I had a brief brush with it myself, earlier this month.
I renounced my US citizenship back in February last year, and have to get umpteen tax forms filled out as my ‘end tax’ obligations to the IRS before the non-resident alien expat deadline in June. One of the IRS forms demanded to know the worth of what I own!
It mentioned things like cars, jewelry, land, property, art, etc—but implied that anything worth anything needed to be listed.
Fortunately for me I don’t own any of those things on the list, and the stuff I do own is pretty worthless …three old bras, two pairs of sandals, and a partridge in a pear tree, etc. Not even charity shops want most of my stuff. However, the IRS demand did get me thinking …how in the HECK would I have done this, if I DID own the kind of things they were interested in? They made it clear on the form that they weren’t interested in what I paid for my possessions. They want to know what they are worth now. Yeegs. I would need to get everything officially valued. Not a cheap or simple option. And, as you pointed out, a bit of a nightmare for the tax authorities to audit.
Sometimes I’m glad I’m not wealthy! And I am extremely glad to no longer be a Yank.
You get my argument!
Richard,
Any one tax has issues. The point is to generate economic activity which balances the economy.
Taxing property would help justify government spending which is being accused of reaching unsustainable levels.
This is patently untrue of course but is believed.
It is bizarre that benefits to the disabled and chronically ill are to be cut because taxes supposedly cannot be increased.
If the government wants to get people into work they have to create jobs not reduce the wages that people have no choice but to accept.
wasn’t that tried in the thirties …
I am not sure what your argument is?
Capital taxes are a good thing.
Thanks for this sensible point, which is ignored by proponents of wealth tax.
I handled probate for my mother’s estate. It was not easy! I paid a significant fee to discover that the value of family “heirlooms” was rather less than she had always imagined, while on the other hand what should have been a more solidly based valuation of her property was too low; it turned out the house (which was more or less unchanged since I was a schoolboy) was ideal for extension and the estate agent had seven different people in a bidding war. It gave me the added complication of having to find out how to register the estate for tax to declare a capital gain.
Having said that I am in favour of a wealth tax at the point of distribution which inheritance tax is, where the challenge of valuation happens just once in a generation provided it is fair across wealth levels. Tax from income (including income by capital gains) could be made to work much more fairly, as you have shown in your Report, though there is a desparate need for a better tax on property. It is absurd that Council Tax is now based on a hypothetical value over 30 years ago, and a revaluation to 2025 would rapidly create the same issue again; it needs to be based on something objectively ascertainable and date-independent such as habitable area and total land area.
Thanks
Unless one is sympathetic to the perspectives offered by MMT proponents, then the objective of government is to raise sufficient revenue to achieve a balanced budget, but do so by means that are economically efficient and fair. Unfortunately, since the days of Adam Smith (or even earlier) there has been little agreement on how these outcomes ought to be achieved. Smith put his foot in the water in his discussion of the role of landlords and whether they in any way earned the rents they charged to tenants. A long list of economists have agreed with Smith’s analysis and some have embraced the public capture of economic rents because they are unearned to individuals or private entities. So-called land value taxation is a very watered-down policy option, although where adopted has proven to yield positive outcomes (i.e., increased investment in new construction and property renovations, a decrease in vacant land, and much lower instances of land purchases for purely speculative reasons rather than for employment-creating development). Local governments should demand the legal authority to impose an annual tax on the economic rent of land within their jurisdictions. But, what about the revenue needs of the governments of England, Scotland and Wales and of the government of the United Kingdom?
Economic efficiency and fairness still need to be dealt with. The difficulty of coming up with the value of an individual’s personal wealth has been presented. However, there is the option of taxing individual income in a manner that imposes almost no burden on income earned producing goods and services and income DERIVED from speculation and special privileges enjoyed under law. How might be work? Exempt all individual incomes up to some amount, say, the national median income. Eliminate all other exemptions and deductions. Then, impose an increasing rate of taxation on higher ranges of income. The rates and ranges would be determined as part of the governmental budgeting process.
At the highest level of individual incomes, a good portion is likely to come from various forms of speculation. While some earned income will be taxed, the amount of tax paid will have no effect on the individuals quality of life.
You got everything wrong from the start. You said:
Unless one is sympathetic to the perspectives offered by MMT proponents, then the objective of government is to raise sufficient revenue to achieve a balanced budget
This site is openly sympathetic and promotes MMT, which is a factual description of how government funding works.
And the whole problem of macro is that that government should not have the objective you note, which makes no sense at all if you actually understand the relationships between tax, government and money, which you very clearly don’t. If you seek that understanding you might have something to say here. As it is, you are part of the economic problem.
It is true that administering a wealth tax would be fiendishly complicated and open to challenge, we only have to think that when we want to put our homes up for sale we get valuations from estate agents and invariably of the 3 people go for the highest when selling, for tax purposes you would want the lowest valuation and HMRC would want the highest. The government would have to massively increase the HMRC workforce
You don’t need to Tax the precise value of each individuals property.
A whole of wealth tax would be ridiculously complicated, but doing taxes on specific types of wealth is easier and don’t all have to come in at the same time.
For example replacing council tax and business rates wih a land value tax would be a much fairer system even with people trying to play the system, plus there are arguments it could be good for stablising property values.
You can tax based on the average value of land per m² in the area. Obviously this has it’s own difficulties but if it’s adjusted based on actual sales as well as estimates, and averaged out it doesn’tmatter if some people over estimate or under estimate. You just need a good measurement of plot size and it’s fair enough to better than what we have.
Search the comments on LVT.
It really does not work, and most certainly cannot as a wealth tax.
I thought we were all clear that taxes do not fund public spending? Taxes are a mechanism to redistribute resources?
The suggestion that taxing the wealthy will raise money to fund public spending is wrong and misleading.
MP’s vote money into existence by approving a spending bill and the central Bank(BOE) credits the accounts of the suppliers of goods and services to the government under instruction from the exchequar.
Tax removes money from the economy and government spending adds money to the economy ………… isn’t it just that simple to understand?
The government cannot save the money it creates?
yes
And the claim that tax has no role in MMT or government funding is wrong. Please don’t promote a falsehood. You only show you do not understand MMT. You also do not help it.
https://taxingwealth.uk/2023/09/08/the-taxing-wealth-report-2024-and-modern-monetary-theory/