Jump to content
House Price Crash Forum
Sign in to follow this  
Steppenpig

Tax Wealth

Recommended Posts

In an age of low or sub zero interest rates, assets will inevitably attract speculative investment and increase faster than wages, until periodic crashes cause them to fall.

So taxes on assets should be increased, and taxes on earnings reduced.

In fact, I wonder if there has actually been an increase in the proportion of taxes from earnings over the last few decades, despite politicians trying to convince us of the opposite, that has actually led to the current unstable situation.

Share this post


Link to post
Share on other sites

the government should spend less than it does now and have a budget fixed within a range of GDP that correlates to a sensible tax take (something like 65% of what it is now)

imo

Share this post


Link to post
Share on other sites

Yes, probably no more than 25

the government should spend less than it does now and have a budget fixed within a range of GDP that correlates to a sensible tax take (something like 65% of what it is now)

imo

Probably no more than 25% of GDP over a business cycle.

Share this post


Link to post
Share on other sites

Probably no more than 25% of GDP over a business cycle.

Are there any developed nations that come anywhere near that?

But what about changing the ratio between taxing income and wealth, to make the economic environment more stable?

Share this post


Link to post
Share on other sites

Are there any developed nations that come anywhere near that?

But what about changing the ratio between taxing income and wealth, to make the economic environment more stable?

US used to...and inequality was less then than now (now spends 35-37%)

Share this post


Link to post
Share on other sites

In an age of low or sub zero interest rates, assets will inevitably attract speculative investment and increase faster than wages, until periodic crashes cause them to fall.

So taxes on assets should be increased, and taxes on earnings reduced.

In fact, I wonder if there has actually been an increase in the proportion of taxes from earnings over the last few decades, despite politicians trying to convince us of the opposite, that has actually led to the current unstable situation.

Already happening. In the sense that assets are paying out a small fraction of what they did before the Blair/Brown Bubble.

Hence the rise of house prices, the crash in interest rates, and the crash in pension rates.

Share this post


Link to post
Share on other sites

I hope this never happens. I've invested my (heavily taxed) income and bought assets. I shall be most narked if, just as I've got a nice stash going by foregoing short term jollies, the thieves in Westminster start eyeing it up.

Share this post


Link to post
Share on other sites

Ultimately it will be power that decides who pays tax. A consequence of the developed world moving towards an economic model in which the majority of households will acquire no meaningful wealth during their lifetime is that there will be more votes to be gained than lost from shifting taxes away from labour and onto wealth.

Edited by Dorkins

Share this post


Link to post
Share on other sites

I hope this never happens. I've invested my (heavily taxed) income and bought assets. I shall be most narked if, just as I've got a nice stash going by foregoing short term jollies, the thieves in Westminster start eyeing it up.

We already have stamp duty on the purchase of assets, CGT on the sale, I dont see what more can be done.

In the immediate lunacy of the left after the credit crunch, they were taking about annual wealth taxes , one Greg Philo, some lecturer at a third rate university, if memory serves, was proposing an annual tax on the 4 trillion or so of wealth above his threshold 'wealthy' (whatever it was per household...at the time the radio were mocking him that he'd have to go into grannies jewelry boxes to make it work!) level of 5% to clear the at the time near £200billion deficit. Of course, even an utter idiot (though apparently not most of the left) can see the rank stupidity of this, given virtually all assets yield beneath 5% and have done for quite some time. Have an annual tax of 5% on something that yields less than 5% and it ceases to be an asset and changes to a liability...thus the price must reduce accordingly for it to yield above 5%. But then the original revenue calculations become redundant, and the tax rate must be increased. Repeat until the tax rate is 100% of assets with a value of zero.

Sure, I guess they could have an asset tax, I think the frogs and swiss do, but its something like 0.15%...it isnt going to fund much.

Edited by Executive Sadman

Share this post


Link to post
Share on other sites

We already have stamp duty on the purchase of assets, CGT on the sale, I dont see what more can be done.

In the immediate lunacy of the left after the credit crunch, they were taking about annual wealth taxes , one Greg Philo, some lecturer at a third rate university, if memory serves, was proposing an annual tax on the 4 trillion or so of wealth above his threshold 'wealthy' (whatever it was per household...at the time the radio were mocking him that he'd have to go into grannies jewelry boxes to make it work!) level of 5% to clear the at the time near £200billion deficit. Of course, even an utter idiot (though apparently not most of the left) can see the rank stupidity of this, given virtually all assets yield beneath 5% and have done for quite some time. Have an annual tax of 5% on something that yields less than 5% and it ceases to be an asset and changes to a liability...thus the price must reduce accordingly for it to yield above 5%. But then the original revenue calculations become redundant, and the tax rate must be increased. Repeat until the tax rate is 100% of assets with a value of zero.

Sure, I guess they could have an asset tax, I think the frogs and swiss do, but its something like 0.15%...it isnt going to fund much.

But that isn't the point, an asset tax of that type is essentially a disincentive to having more than the threshold level. That something may become a liability is pretty much irrelevant on those terms, it's merely a way of saying to folks, dude, you've got enough.

Share this post


Link to post
Share on other sites

I hope this never happens. I've invested my (heavily taxed) income and bought assets. I shall be most narked if, just as I've got a nice stash going by foregoing short term jollies, the thieves in Westminster start eyeing it up.

I hope this happens on rent-seeking wealth, because the likely reason you invested your (heavily taxed) income and bought assets is because people before you invested their (heavily taxed) income and bought assets...

https://principlesandinterest.wordpress.com/2015/04/01/why-arent-all-taxes-wealth-taxes/

Share this post


Link to post
Share on other sites

But that isn't the point, an asset tax of that type is essentially a disincentive to having more than the threshold level. That something may become a liability is pretty much irrelevant on those terms, it's merely a way of saying to folks, dude, you've got enough.

Well, the left billed it as a way to raise revenue, not modify behaviour.

Although admittedly, the greens laughable pre-election campaign calculations of raising 40 billion or so via a wealth tax that raises a few hundred million in France do make me wonder if there is some other motive...regardless, they just come off looking incompetent.

Share this post


Link to post
Share on other sites

Well, the left billed it as a way to raise revenue, not modify behaviour.

Although admittedly, the greens laughable pre-election campaign calculations of raising 40 billion or so via a wealth tax that raises a few hundred million in France do make me wonder if there is some other motive...regardless, they just come off looking incompetent.

It would (or at least could) raise revenue. If the idea is to modify behaviour such that people don't have more than x amount then it would, over time, raise that amount over x. Of course you'd need effective regulation to stop the tax being evaded/aggressively avoided but that's a different, if related, argument.

Share this post


Link to post
Share on other sites

Although admittedly, the greens laughable pre-election campaign calculations of raising 40 billion or so via a wealth tax that raises a few hundred million in France do make me wonder if there is some other motive...regardless, they just come off looking incompetent.

The Greens fudged their pitch at the general election, they didn't have the nerve to hold to a clear land value tax plus basic income policy. Instead they ended up with a soggy blancmange of an "anti-austerity" deficit spending position which is, er, exactly what Darling and Osborne have been doing since 2008. Corbynomics is basically the same.

Share this post


Link to post
Share on other sites

... Repeat until the tax rate is 100% of assets with a value of zero.

That's the idea. Well not zero obviously. At the moment asset prices and incomes are diverging, something needs to be done to make them converge.

Share this post


Link to post
Share on other sites

That's the idea. Well not zero obviously. At the moment asset prices and incomes are diverging, something needs to be done to make them converge.

Stop printing money above and beyond the level of productivity and population growth would seem the sensible option, I would have thought.

Thats the cause, taxing the symptoms is only going to force it somewhere else.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   81 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.