The Tax Research glossary seeks to explain the terms used on this blog that refer to more technical aspects of economics, accounting and tax. It recognises that understanding these terms is critical to understanding the economic issues that affect us all the time.
Like the rest of the Tax Research blog, this glossary is written by Richard Murphy unless there is a note to the contrary. It is normative approach and reflects post-Keynesian, heterodox economic opinion with a bias towards modern monetary theory. The fact that many items in that sentence are hyperlinked shows that they are explained in the glossary.
The copyright notices pertaining to the Tax Research blog apply to this glossary.
The glossary is designed to achieve three goals:
- It seeks to provide a short, hopefully straightforward, definition of what a term might mean.
- It then seeks, when appropriate, to explain what the term means within the context in which it is used. This is meant to elaborate the definition to add to understanding.
- It then critiques the term, explaining, if appropriate, what the weaknesses inherent in the term or the situation it describes are. The aim here is to empower the reader to understand the issues behind the nonsense that most professions create around their activity to provide them with a mystique that they rarely deserve and which often hides what they are really up to.
The glossary is not complete. It will grow over time. If you think there are entries that need adding please let me know by emailing email@example.com. Please also feel free to suggest edits. The best way to do this is to copy an entry into Word and then send me a track-changed document indicating the changes that you suggest.
Because of the way in which it is coded this glossary automatically cross refers entries within itself and to the blog that it supports and within the glossary itself but if you think a link is missing please let me know.
Finally, if you like this glossary then you might like to buy me a coffee. It has required the support of a fair few to write it. You can do so here.
High net worth individuals
Otherwise known as HNWIs (pronounced hen-wees).
Generally categorised as individuals with more than US$1 million of financial assets (i.e. worth excluding the value of their main home) available for investment.
The proportion of HNWIs within an economy is a measure of:
- The concentration of economic power within it.
- The likelihood of low multiplier effects as the savings ratio is likely to be high.
- The likely exposure to offshore tax abuse within the economy as HNWIs are must likely to undertake such activity.
Horizontal tax equity
Horizontal tax equity requires that all incomes of similar amount be taxed the same sum irrespective of where that income comes from.
As example, this would mean that three people with an income of £30,000, one generating that from work, another from rents, and the third from capital gains, should all pay the same amount of tax in the year despite those differing sources of their wellbeing.
The UK is a very long way from having horizontal tax equity at present.