Rachel Reeves Funding Review

No they won't because they can't. The wealth they own cannot be moved. They own land, housing, office blocks, business premises. They can't take any of that with them. If you tax wealth, not earnings, and you apply that tax to the wealth of the country, no matter where the person who owns it lives, you can tax the rich and it doesn't matter if they move.

 

Haha! Genuinely laughed at loud at that

 

Lol, it's you my friend who isn't getting it.

The super-rich are a commodity. If someone from Dubai buys a £10million flat in Kensington, the stamp duty on it is 12%. That is over a million into the UK tax coffers, more than most will pay in a lifetime. If they live in the UK, they are also more likely to invest here and spend their capital here.

The vast majority of countries around the world are trying to lure this clientele, just look at the range of golden visas and tax breaks on offer. Countries want them because they profit hugely in tax, even if that is only pocket change for some of the individuals.

London is glamorous and tax rates were low, that is why they're here.

 

Obviously, no one would then invest here when there are many other more business friendly countries.

Think about it, you have a million to invest, are you going to do so in the country with the most draconian laws?

 

They're already invested here.

 

But people don't just have their wealth sat in a bank account. It's invested in property and business.

We can tax property over certain amounts higher. But it looks like the threshold on this has been reached. The government makes considerably less money from stamp duty than it did before the last rises, as these rises have stifled property purchases.

The other option is to tax business more, which could lead to the UK becoming uncompetitive.

One area I do think can be taxed further is capital gains to fall more inline with standard tax brackets. However, this could stifle investment at a time the government is trying to push growth.

 

London is glamorous. And shows they’re rich. They will buy anyway.

 

We can tax the rich. We don't because the rich influence (or are) the people who set the tax rates. They don't want to pay tax. And they propagate myths as to why the rich can't be taxed. But we can and the country would not fall apart, the wealth would just be spread more evenly.

 

Ok, I'm happy to be proved wrong. But could you give an example of how this would work, and say how it could be done, rather than just that it 'can'?

I think we're on the same side here. I believe in higher taxes and that no one should be left without, however I work with the super-rich and know their lifestyles and habits, so know how difficult it is to tie them down to anything unappealing.

 

This is true in some circumstances.

Saudi is hotter than the sun in summer, so everyone leaves. They all learn English in school and London is closer than NYC so is an obvious option. This demographic don't really earn money, so taxes are irrelevant.

More savvy investors would certainly be put off however and I know of many who have been in the UK for 10+ years, with kids who are English and are leaving. Like with any decision the government makes, the bottom line will be, does it benefit the country. We need to tax the super-rich as much as we can, but if it crosses a critical point we start to lose tax revenue as the number of people we are taxing dwindles.

 

I'd recommend watching this guy who can articulate it much better than I can and has a much more in-depth knowledge of the subject.

https://www.youtube.com/@garyseconomics

 

The conservative govt (to my knowledge ) brought in a policy which allowed someone who was domiciled in the uk for more than the 180 days (or whatever the limit) could pay either £30/60000 per annum and this would then mean that only their uk assets were taxed under uk taxation as opposed to worldwide assets - this got removed for Russians (ie abramovich) when the Ukraine war kicked off , which resulted in them selling up lock stock and barrel in the uk - this could potentially be removed if it hasn’t already which could then see many billionaires disappear - im not saying I agree with it btw as my take on this is the at these things can be brought in to benefit those who make the rules - again I’m not saying this is the case.
I’m just very sceptical when it comes to any MP etc
I stand to be corrected on the above though and archerfield might have the confirmation on my understanding of the above , but thought it was worth mentioning !

 

Because the reason for poor public services is the movement of wealth from ordinary people to the extremely wealthy.

That's just untrue. Other countries (Norway, Spain, France and Switzerland for example) have a tax on wealth and raise significant sums of money.

A one off 5% wealth tax on anything over £500 would raise £267bn. Insert your own sliding scale in who gets taxed.

There clearly needs to be more internal cooperation on tax. Brazil recently proposed this.

https://www.reuters.com/business/fi...ived-g20-seen-difficult-implement-2024-07-25/

The alternative is they tax people who already have suffered 15 years of austerity.

 

I'd also tax anyone buying land for property development who is choosing to squat on it and raising the land value, rather than building on it as they're supposed to do. This is a massive part of the reason why we have a housing shortage.

Give them (x) months to begin building on it or face a large tax on the value of the land for each year after it. Essentially make it unprofitable not to do so.

 

If there was a tax on that £10m flat of 2% per year - that's £200k in tax per year (instead of the current £3-4k council tax). Set the tax on the sale/disposal of assets right, and they have a choice of paying the asset tax every year or selling it and the new owner can pay it (and we get the tax on the sale too). Local councils are funded properly and can run the local services properly that people need.

If they don't pay it, the asset gets repossessed.

Either we'll get a lot more tax, or the price of housing would fall. Either way is a win for the little people without costing the rich too much.

 

People live in London because of low tax rates?

 

I think the situation with the Russian oligarchs that you describe was more likely influenced by the very real prospect of them having their UK assets frozen and potentially repatriated following the invasion of Ukraine.

 

Majority of people doing this are the large housebuilders, all they would do is keep pushing the price up to offset the tax.