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A wealth tax is a slim possibility

The solution to paying down government debt could be a new wealth tax, the Wealth Tax Commission has argued. Philip Fisher explores whether it will ever reach the statute books.

17th Dec 2020
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The Chancellor attends a virtual meeting
Flickr_Chancellor-Sunak_HMTreasury

Every few years, a group of wise souls decides that the only way to make society fairer and balance the budget is to introduce a wealth tax.

The Wealth Tax Commission has recently been established with that goal in mind. To further its aims, the commission has published a carefully considered 126 page report, penned by two full-time academics Arun Advani and Andy Summers and barrister/academic Emma Chamberlain.

As former cabinet secretary Lord O’Donnell announces in the foreword to the report, its chances of coming to fruition currently seem negligible given that Chancellor of the Exchequer, Rishi Sunak, stated in July, “No, I do not believe that now is the time, or ever would be to time, for a wealth tax.”

Main proposal

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Replies (14)

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By Montrose
17th Dec 2020 13:35

Just a few random thoughts.

1} What about unfunded employers' schemes - such as the Civil Service?

2] Valuation-no need for HMRC to have experts on chattel valuation[the CTO does not have the numbers of necessary experts}. Just build in a modern day version of Morton's Fork. Give HMRC the option of acquiring any asset for say 115% of the declared value.

3]Non UK property . Wealth tax is arguably not covered by Double Tax Treaties but how will say the US feel about a New York home [ owned by a US executive resident in the UK ] being subject to a UK wealth tax?

4] If enacted this would be a bonanza for UK Accountants

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Replying to Montrose:
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By Open all hours
17th Dec 2020 14:21

Don’t think we should hear any more about it until they have addressed your first point.

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Replying to Open all hours:
Hallerud at Easter
By DJKL
17th Dec 2020 14:31

Whilst not having read it discussions elsewhere suggested that pension schemes rights would have an actuarial valuation approach applied. (As part of my first ever audit I was required to review commutation figures re six final salary schemes, what on earth I was expected to spot, what level of critical thinking was expected that I could apply to the actuary's computation I have no idea, most of my "checking" was re the arithmetic, the life expectancy tables, gilt yields and discounts if transfers well before entitlement were like a foreign language)

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Chris M
By mr. mischief
17th Dec 2020 19:30

A better idea is to heavily tax the idle rich via inheritance tax, indeed drastically reduce the number of idle rich in the country.

0% first £2m
100% thereafter

No valuation issues other than those already dealt with on death. All UK property transfers at Land Registry would be potentially taxable events. £70 billion a year if done properly, deficit job done!

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Replying to mr. mischief:
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By AndyC555
18th Dec 2020 12:39

Do you know many people who became rich by being idle?

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Replying to AndyC555:
Chris M
By mr. mischief
18th Dec 2020 20:21

The entire royal family, Duke of Westminster, 50% or so of the offspring of self-made millionaires.

The good news for those whose inheritance is cut by 90% or more as a result of my tax plans is that the hard-working ones will simply go out to work and earn it all back again. Trebles all round at the bar!

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Replying to AndyC555:
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By KaranKS
16th Feb 2021 19:55

Humm, many people know this truth.

AC Market

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Replying to mr. mischief:
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By chrisowen
19th Dec 2020 12:53

I Agree with this in principle.
One of the reasons for the UK's inflated house prices is inherited wealth. Reduce this by increasing Inheritance Tax, will cause house prices to fall, so benefiting the lower paid and first time buyers who are struggling to find huge deposits.

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By Duggimon
18th Dec 2020 10:43

Rishi Sunak, whose wife is richer than the Queen, is against a wealth tax.

This is why we need to stop electing the wealthy elite and expecting them to solve the massive problems of wealth inequality in our society.

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Replying to Duggimon:
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By AndyC555
18th Dec 2020 12:37

"the massive problems of wealth inequality"

What are the "massive problems" with wealth inequality? If everyone except one person in a country earned £50k a year and that one person earned £50m, there would be wealth inequality but would you rather live there or in a country where everyone earned £5k a year and so there was no wealth inequality?

If pointing at someone who has more and shouting "look at him, look what he's got, it's not fair" is a massive problem then I agree we have a problem. With the person doing the pointing and shouting.

If someone sets up a business, creates jobs, makes our country wealthier and in doing so becomes personally rich, what 'massive problems' has he or she created?

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Replying to AndyC555:
By Duggimon
20th Dec 2020 09:07

AndyC555 wrote:

"the massive problems of wealth inequality"

What are the "massive problems" with wealth inequality?

Your examples are so far off the actual society we have it’s a pointless choice, both options are utopian compared to the truth of it. On one hand we have hundreds of thousands of people working full time unable to feed their families, on the other we have https://www.theguardian.com/technology/2020/dec/19/ten-billionaires-reap...?

That’s a massive problem in my mind. Nobody needs billions of pounds and billionaires can’t exist without being propped up by people living in poverty.

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Replying to AndyC555:
Chris M
By mr. mischief
21st Dec 2020 07:34

My answer to your last question is they've solved problems, not created them. But most of them - by no means all - then create a problem by just leaving all of that wealth to their offspring who have done nothing to earn it. Over the generations in my view this creates a massive problem, namely an indolent rich class who have a ridiculously high sense of entitlement in comparison to their abilities and talents.

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By North East Accountant
18th Dec 2020 13:31

What an idiotic idea.......... hence it's odds on that it will happen.

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By Marlinman
19th Dec 2020 02:37

Crazy idea and would force a lot of people to leave the uk, taking their money and investments with them. Including main residence and pension funds is madness - how would the retired find the money?
The big problem is we are already taxed to the hilt and there isn't much scope to find new taxes. Cutting waste such as HS2 has got to be the way forward.

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