Should wealth be taxed more? Watch

Burridge
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I've just finished watching the Big Questions, and one of the questions was "should wealth be taxed more". As per usual the debate was tainted by comments such as "why should rich people fund the lifestyles of people on benefits who don't want to work. Rich people don't really get to see the benefit of the tax they pay" and "more tax will disincentivise entrepreneurialism".

Both are ridiculous arguments - and I really don't understand how they continue to dominate the discussion.

Firstly, let's remember that only a fraction of people in receipt of benefits don't wish to work. In addition, the amount of government spending which is directed towards these people is minuscule. On top of that, do rich people not benefit from our education system? How about our NHS? How about the police force?

Secondly, are you honestly trying to assert that if, for example, the Duke of Westminster were to be taxed 25% more (not necessarily income tax; the cumulative impact of varies increases in taxation), thereby taking his wealth down to, say, £6bn as opposed to £8bn - and he foresaw this as as child - that he'd had never taken the path that he did to acquire his wealth? He would have chosen instead live a typical life earning an average salary, because ultimately he'd only be valued at £6bn?

What are your thoughts on both the topic and the specific points I've made?
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tengentoppa
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Putting aside ideology, taxing the wealthy to a huge extent is a bad idea. Look what happened in France when Hollande introduced his super-tax. Everyone left. It's better to have many rich people paying 45% than having very few pay 70%.

The example you gave with the Duke of Westminster is not a typical one. Let's instead take someone working in IB or commercial law who earns just over 150k. They work exceedingly long hours in a stressful environment, with the caveat of being well paid. If they were then to be heavily taxed, they may move to somewhere with more favourable tax rate, such as Singapore, resulting in a brain-drain and a loss of tax revenue.

Moreover, elite students may be put off these industries if one of the key advantages, high remuneration, is taken away. Why bother working so hard if you won't be earning that much more than your fellow grads doing 9-5 jobs?

Robin-hood taxes are popular, but they don't make economic sense.
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Burridge
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(Original post by Pistol 33)
Yeah. Let's tax people that work hard for their money more.
Yes, let's! And whilst we're there let's reduce the tax burden for the millions of equally as hard-working individuals that remain in poverty despite doing the very best they can to support their family ...
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Zorgotron
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(Original post by Burridge)
Yes, let's! And whilst we're there let's reduce the tax burden for the millions of equally as hard-working individuals that remain in poverty despite doing the very best they can to support their family ...
Except that this myth about the noble impoverished proletariat is simply not true. Very few people are in poverty due to no fault of their own, but they are very rare and they have my sympathies. The overwhelming majority are a bunch vagrants, who consistently ignore traditional wisdom about escaping poverty and break all the rules that are needed for basic social progression. Rules, such as:


  • Finishing highschool.
  • Saving money.
  • Not getting children outside of wedlock.
  • Getting a job and incrementally building up your CV.


These people, who are on welfare for years with no signs of improvement whatsoever, are not the kind of people who want help. They just want free money, drugs and sex. The welfare system that's sustained by the hardworking people is directly enabling this sort of lifestyle. When someone has a choice of getting X amount of money for sitting on his ass and getting slightly more money for working 8 hours a day - they'll just opt for sitting on their ass, because it's more convenient.

The left has systematically destroyed the work-ethic and the economic independence of the people. The poor have never been so dependent of the government than they are now. And because the money just keeps flowing in for free, there is no incentive to get a job.

So no, wealth should not be taxed. Success should not be taxed. Good work ethic should not be taxed. Laziness should be taxed. Failure should be taxed, and not by the government, but by the poverty that failure puts people in.
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Quady
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(Original post by Burridge)
I've just finished watching the Big Questions, and one of the questions was "should wealth be taxed more". As per usual the debate was tainted by comments such as "why should rich people fund the lifestyles of people on benefits who don't want to work. Rich people don't really get to see the benefit of the tax they pay" and "more tax will disincentivise entrepreneurialism".

Both are ridiculous arguments - and I really don't understand how they continue to dominate the discussion.

Firstly, let's remember that only a fraction of people in receipt of benefits don't wish to work. In addition, the amount of government spending which is directed towards these people is minuscule. On top of that, do rich people not benefit from our education system? How about our NHS? How about the police force?

Secondly, are you honestly trying to assert that if, for example, the Duke of Westminster were to be taxed 25% more (not necessarily income tax; the cumulative impact of varies increases in taxation), thereby taking his wealth down to, say, £6bn as opposed to £8bn - and he foresaw this as as child - that he'd had never taken the path that he did to acquire his wealth? He would have chosen instead live a typical life earning an average salary, because ultimately he'd only be valued at £6bn?

What are your thoughts on both the topic and the specific points I've made?
Depends what you define as rich, it is arguably another above the average wage. Personally my 51% marginal rate (higher if you consider pension) deters me from seeking a better job. If you could demonstrate doing so would get me £6bn then I would, but you can't.

Ever assessed welfare claims? In my experience if they were true you'd find wallets on every second corner given the number that people lose.
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Rakas21
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(Original post by Burridge)
I've just finished watching the Big Questions, and one of the questions was "should wealth be taxed more". As per usual the debate was tainted by comments such as "why should rich people fund the lifestyles of people on benefits who don't want to work. Rich people don't really get to see the benefit of the tax they pay" and "more tax will disincentivise entrepreneurialism".

Both are ridiculous arguments - and I really don't understand how they continue to dominate the discussion.

Firstly, let's remember that only a fraction of people in receipt of benefits don't wish to work. In addition, the amount of government spending which is directed towards these people is minuscule. On top of that, do rich people not benefit from our education system? How about our NHS? How about the police force?

Secondly, are you honestly trying to assert that if, for example, the Duke of Westminster were to be taxed 25% more (not necessarily income tax; the cumulative impact of varies increases in taxation), thereby taking his wealth down to, say, £6bn as opposed to £8bn - and he foresaw this as as child - that he'd had never taken the path that he did to acquire his wealth? He would have chosen instead live a typical life earning an average salary, because ultimately he'd only be valued at £6bn?

What are your thoughts on both the topic and the specific points I've made?
An interesting thread as usual from you.

Should wealth be taxed more over income and business taxes? Yes. That is to say that we should seek to tax land and expensive property over the likes of income.

Should wealth be taxed more in addition to current taxation? No. It is my belief that government spending needs not be significantly higher than it is today and that further spending cuts can be made.

With regards to your argument regarding whether the rich benefit from public services, your absolutely right. But this is an argument for the rich to pay tax at all, not an argument as to why they should pay more now. The education system is generally well funded, the health service is still adequate for the most part and crime is still falling.

(Original post by Burridge)
Yes, let's! And whilst we're there let's reduce the tax burden for the millions of equally as hard-working individuals that remain in poverty despite doing the very best they can to support their family ...
The two are not mutually required.

With regards to taxation i'm sure you've seen that in several threads i probably want to go further in reducing the burden on the poor than most socialists, but these can be paid for without additional punitive taxation on high earners.
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ChaoticButterfly
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Well the first thing to do should be to collect the tax that is already owed.
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Axiomasher
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(Original post by Burridge)
I've just finished watching the Big Questions, and one of the questions was "should wealth be taxed more". As per usual the debate was tainted by comments such as "why should rich people fund the lifestyles of people on benefits who don't want to work. Rich people don't really get to see the benefit of the tax they pay" and "more tax will disincentivise entrepreneurialism".

Both are ridiculous arguments - and I really don't understand how they continue to dominate the discussion.

Firstly, let's remember that only a fraction of people in receipt of benefits don't wish to work. In addition, the amount of government spending which is directed towards these people is minuscule. On top of that, do rich people not benefit from our education system? How about our NHS? How about the police force?

Secondly, are you honestly trying to assert that if, for example, the Duke of Westminster were to be taxed 25% more (not necessarily income tax; the cumulative impact of varies increases in taxation), thereby taking his wealth down to, say, £6bn as opposed to £8bn - and he foresaw this as as child - that he'd had never taken the path that he did to acquire his wealth? He would have chosen instead live a typical life earning an average salary, because ultimately he'd only be valued at £6bn?

What are your thoughts on both the topic and the specific points I've made?
As a Marxist, argument about wealth and taxation under capitalism is for me somewhat moot; the system itself is inherently unfair and illegitimate. But otherwise, yeah, the rich are only rich because of the generations of serfs, peasants and working-class people who have generated and maintained an environment in which, under capitalism, a privileged few could gain disproportionate advantage from the labour of others. I can remember all those super-wealthy people who said they would leave Britain if Labour won the 1997 election. Did they leave? No. They might whine but they know that despite higher tax bands they are still at the top of a system of exploitation which advantages them.
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ChaoticButterfly
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(Original post by tengentoppa)

Robin-hood taxes are popular, but they don't make economic sense.
If by economic sense you mean that they don't funnel everything away towards the top then yes that deosn't make economic sense. Whether something makes economic sense is entirely dependent on what you want to achieve.
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ChaoticButterfly
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(Original post by tengentoppa)
Moreover, elite students may be put off these industries if one of the key advantages, high remuneration, is taken away. Why bother working so hard if you won't be earning that much more than your fellow grads doing 9-5 jobs?
What world are you living in? Most 9-5 jobs expect the employees to work longer. With the technolgy we have our working time should be shrinking not increasing.
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caveman1234
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No, wealth should not be taxed more.
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Quady
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(Original post by caveman1234)
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No, wealth should not be taxed more.
Whats the peak of the laffer curve for a wealth tax?
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tengentoppa
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(Original post by ChaoticButterfly)
If by economic sense you mean that they don't funnel everything away towards the top then yes that deosn't make economic sense. Whether something makes economic sense is entirely dependent on what you want to achieve.
As opposed to funneling all the money away from the UK? If you want the biggest taxpayers, the elite graduates and the top businesses to stay in the UK, you need relatively low taxes, I don't know how you can see that as being a bad thing.
(Original post by ChaoticButterfly)
What world are you living in? Most 9-5 jobs expect the employees to work longer. With the technolgy we have our working time should be shrinking not increasing.
That's a moot point. City lawyers and bankers still work far more than those in 9-5 jobs.
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ChaoticButterfly
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(Original post by tengentoppa)
As opposed to funneling all the money away from the UK? If you want the biggest taxpayers, the elite graduates and the top businesses to stay in the UK, you need relatively low taxes, I don't know how you can see that as being a bad thing.
Then it needs to tackled on an international level.

(Original post by tengentoppa)
That's a moot point. City lawyers and bankers still work far more than those in 9-5 jobs.
Then they are being used. Most still get nothing like the amount of profit they help generate for their owners.
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gr8wizard10
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No, it's the classic Laffer curve.
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tengentoppa
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(Original post by ChaoticButterfly)
Then it needs to tackled on an international level.



Then they are being used. Most still get nothing like the amount of profit they help generate for their owners.
I'm sorry, but you're hopelessly naive if you think either of those things are going to happen. You have to be pragmatic.
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caveman1234
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(Original post by Quady)
Whats the peak of the laffer curve for a wealth tax?
Well according to the HMRC, tax receipts have been rising much slower over the last few years (partly due to the recession).
Self-assessment tax revenues have been falling (I don't know how much it now).

That suggests that we're close to the peak of the laffer curve. I have no idea what the actual value for the peak is (I don't think anyone can definitively say).

Anyway the UK is still in recovering and one way to do that is to increase public spending and investment. Therefore, raising the tax rates would not be the best idea. The government should focus more on cutting its spending.
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Quady
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(Original post by caveman1234)
Well according to the HMRC, tax receipts have been rising much slower over the last few years (partly due to the recession).
Self-assessment tax revenues have been falling (I don't know how much it now).

That suggests that we're close to the peak of the laffer curve. I have no idea what the actual value for the peak is (I don't think anyone can definitively say).

Anyway the UK is still in recovering and one way to do that is to increase public spending and investment. Therefore, raising the tax rates would not be the best idea. The government should focus more on cutting its spending.
Partly due to the recession, partly due to tax cuts

The bits in bold contradict themselves.
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Fullofsurprises
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There are a few myths that always come up in discussions on this subject.

Myth #1 - The very rich have worked for their money and therefore shouldn't be punished for it.

Most very rich people have received inheritance. The top 100 wealthiest families in the UK and the top 1000 are nearly all people from long-running wealthy families. Some have built on their wealth, but in the main, they were born wealthy. The media tend to focus on those few who weren't, like top footballers, to promote their case against taxing them. This is not surprising, since much of the media is owned by people who also inherited their wealth. In addition, the media distort the 'success stories' of many top business people, ignoring the privileged starts many had in life. A tax system should at least partly be about fairness. Many of the very rich have not worked harder than average people - they simply started out with more.

Myth #2 - Putting up taxes on the rich results in less money being collected.

This is really only true of income tax hikes. On the whole, very rich people do not pay normal income taxes, or when they, it represents a tax on only a small part of their lifestyle. Most really rich people earn their money from dividends, offshore trusts, growth in the value of assets (and sale of assets) and other non-income taxable means. There is no serious evidence that taxing that wealth causes it to leave countries, but it should be done globally, as the problem now is not a local one but the emergence of a new mega-rich global class who pay little or no tax and are a net destructive, rather than creative, force in the world.

Myth #3 - It's all down to the politics of envy.

No. It's the politics of running a rational society. The emergence of this new class of free-floating, footloose super-rich has led to a very distorted global politics, where only their interests get served by governments. Refusing to tax them is itself a consequence of the way they have manipulated global politics. People like Murdoch for example, who run their media around the world with the sole interest of promoting the sort of zero-tax rates on the wealthy that they desire. The consequences are very serious for all of us. They are leading to declining incomes for the majority, collapsing economies, states that cannot serve basic healthcare needs in formerly well-off countries, declining education, poor infrastructure and falling demand.
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Woodlepoodle
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The problem is tax avoidance. Put the rich tax up and you will get more avoiders. People will take their wealth else where.
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