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Council Tax hikes.

Discussion in 'UK politics, current affairs and news' started by Sasaferrato, Feb 8, 2018.

  1. Leafster

    Leafster Nurturing green fingers

    I think you'd need to add in pension pots to this. I have retired clients with various assets which contribute to their "wealth". Looking at the ability to pay a wealth tax, those with large employer/private pensions but very little else in the way of traditional investments would find it much easier to pay than those with a large balance in their Natwest savings account.
     
  2. pesh

    pesh Well-Known Member

    i think it needs to be more than just the value of their house, theres going to be a lot of older people out there, especially in London who have very little money but the house they bought 50 years ago is now worth a fortune, if they can't pay their taxes on it and have to sell it as a result i don't seen how thats helping anything but gentrification.
     
  3. bimble

    bimble noisy but small

    I think wealth tax was binned as an idea in uk mainly because of the administrative complicatedness of implementing it, valuing someone's wealth being complicated and also changeable, along with the usual concerns about 'capital flight' and people wriggling out of it by buying boats or whatever.
    http://eprints.lse.ac.uk/42582/1/Why_was_a_wealth_tax_for_the_UK_abandoned_(lsero).pdf

    'The several thousand civil servants needed, depending on the valuation level at which the tax began, the numerous regional offices required and the process of regular valuation that might fall on individuals came as a surprise to the politicians and, indeed, to the Treasury when it got to think about the question properly..'
     
    Last edited: Feb 8, 2018
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  4. kabbes

    kabbes "A top 400 poster"

    Pension pots theoretically have already been included in this balance. They are subject to both annual and lifetime allowances, and this is supposed to represent what the government views as acceptable to accumulate tax-free for the purpose of retirement savings.

    I would say that anything in excess of the lifetime allowance would be in scope for a wealth tax, but anything within the lifetime allowance is by definition something that has already been deemed to be worth sheltering from tax. If we think this is unacceptable, the answer is to reduce the lifetime allowance.
     
  5. Sasaferrato

    Sasaferrato T'agba ta ti de, a ma yo ogunja.

    FFS! Wait until you get old laddie, you'll be singing a different tune.
     
    coley likes this.
  6. ska invita

    ska invita back on the other side

    makes sense, but i wonder how the Finns do it? I guess theres less of them
     
  7. kabbes

    kabbes "A top 400 poster"

    Gentrification is bad, but there is a balance between the needs of an old person to stay living in the big house they've always owned and the needs of young people to be able to buy big houses to raise families in. If we didn't have such a fucked up housing system that distorts the way we view the whole shebang, we might consider it a good thing for people to move into smaller properties as they get old.
     
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  8. ska invita

    ska invita back on the other side

    its not necessarily big in Hackney for example
     
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  9. 8ball

    8ball I am Spasticus

    To some degree we obv do that. Smaller bungalows for people as they get older etc.

    The obstacle is worse in places like London where the house is a big pile of money which various interests want to make a claim on as the older person moves out.
     
  10. Leafster

    Leafster Nurturing green fingers

    Ah, OK. So if we take the life time allowance as a starting point (£1m?) then add in an average house (say £500k, round here) then I suppose we're saying the wealth tax should start at anything over £1.5m regardless of the make up of the wealth. Does that seem a reasonable level? I think many people would think that's pretty high but as I said before, I think pension funds are often off the radar when people consider wealth.

    I really don't know what level is right for a wealth tax - just thinking out loud.
     
  11. kabbes

    kabbes "A top 400 poster"

    Expensive London boroughs certainly create isolated fuck-ups, but that is a symptom of the way the system as a whole is fucked up. The fact is that within a particular area, a big house will be more expensive than a small one. If you want to stay in the same area and you can't afford the cashflow for your wealth tax, you'll need to downsize. Clearly, though, if you already live in a one-bedroom flat and it becomes valued such that you can't afford the wealth tax, that leaves you nowhere to go but out of the area. I would note, however, that even in Hackney, one-bedroom flats don't cost £1m, let alone the £1.5m we were talking about earlier. The devil is obviously in the details of the wealth brackets we measure. A £1m threshold that excludes pension savings within the lifetime allowance isn't going to catch any old men in tiny flats outside of, I don't know, Kensington or something.

    Besides, extreme cases make for bad law, as a jurisprudence academic I know is wont to say -- we need to set the rules so that it works in the large bulk of cases and let the margins sort themselves out in the shake up.
     
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  12. kabbes

    kabbes "A top 400 poster"

    You could do it like that, but I don't see any problem with continuing to treat pension savings as a tax-free vehicle in its own right and adjust the levels of its thresholds to make it consistent with social policy. It gives you a lever to balance what is needed in retirement that is separate to the level that controls other wealth.
     
  13. chilango

    chilango *shrugs*

    Whack the top rate of income tax back into the %90s. Use that to fund services.
    Tax the fuck out of BTLs and Second Homes.

    ..then if we still need more money we can look at old people in big houses.
     
  14. SpookyFrank

    SpookyFrank Somewhere under the raincloud

    Many more will have been forced out by the economics of it all.
     
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  15. kabbes

    kabbes "A top 400 poster"

    In my theoretical construct of wealth tax, by the way, you would need to do away with stamp duty (which is a horrible tax anyway in terms of perverse incentives). You can't be setting up a trap where somebody has to move to pay wealth taxes but then gets nobbled by stamp duty as a result.
     
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  16. kabbes

    kabbes "A top 400 poster"

    This is a reasonable approach, but it is also reasonable to consider entrenched wealth as well as income when looking at scope for taxation. It is the asset-rich, cash-poor gentry sitting on enormous land banks that create a lot of the class inequality in this country.
     
    Almor, muscovyduck, salem and 3 others like this.
  17. Pickman's model

    Pickman's model amid a crowd of stars

    in london your small property can be just as expensive as a big house elsewhere - so a 1 bed flat in hackney can go for £500,000. and there aren't enough of them to go round, so the notion that people can just flit from a property too large into one which fits them better is a myth. i'm sure people in places like grimsby or doncaster might also like to move into places on one floor when they're no longer so able to manage the stairs but even there i bet it's not so easy to find a flat to move into.

    not to mention that the majority of people living in london don't own their own property, not even a majority of aulder people.
     
    Last edited: Feb 8, 2018
  18. chilango

    chilango *shrugs*

    Yeah. I'm quite happy, nay eager, to squeeze those fuckers too. :thumbs:
     
  19. Leafster

    Leafster Nurturing green fingers

    I think in my work I see many people who have used alternatives to pensions to fund their retirements so perhaps my view may be biased by that.
     
  20. kabbes

    kabbes "A top 400 poster"

    That's because the government is utterly schizophrenic on the issue. It derives from a desire to get the taxation now rather than later, when the pensions are in payment, which means it has started squeezing the allowances for pension schemes and expanding them for alternative tax-free savings vehicles. This comes after 70 years of single-minded focus on pension schemes as being the vehicle for retirement savings, and the result is a bit of a mess.
     
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  21. Leafster

    Leafster Nurturing green fingers

    I totally agree. Pensions are very long term commitments spanning decades and continual changes from various flavours of government have made it increasingly mind-boggling for the average punter to understand. Things like the Equitable Life fiasco in the late eighties (?) also made people wary of investing in pensions. I think a large part of the rise in the buy to let industry was because of people considering alternatives. Certainly, many of my clients have buy to lets for this very reason.
     
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  22. Fez909

    Fez909 toilet expert

    Agreed. I'm not actually in favour of this wealth tax we're discussing. Well, I'd support it. But I'd much rather we just 100% inheritance tax, with all the loopholes closed instead.

    That would sort things out in a generation.
     
  23. Rutita1

    Rutita1 Scum with no integrity, apparently.

    Furthermore, your house increasing in value doesn't make you wealthy in terms of everyday access to money and savings...some of the poorest people I work with are older people living on peanuts of a state pension, no savings but in their own homes.
     
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  24. ska invita

    ska invita back on the other side

    I cant picture what would happen with 100% inheritance tax ...everything you own when you die goes to the state?
    No being able to pass a family home down?
    pensions is basically shares in corporations...and increasingly pensions companies are the biggest driver in gentrifying/flipping houses for a profit...all of which puts me off completely
     
  25. The answer, to Surrey certainly, is in the OP:

    When they said on the radio this morning that Surrey is the richest county in the UK, they meant it has the highest number of rich cunts (or high net worth individuals as they style themselves these days) of any county. London not being a county, of course. They said ours would go up by around £160 a year, for the highest band it will go up around £230 a year. They could easily double or even triple that and no one would really notice.
     
    coley likes this.
  26. I am also very much in favour of that. Not only does it pass on wealth to those who already benefit massively from the privilege of their birth, it would stop many a family argument.

    And how come when the Duke of Westminster died his heir paid not a bean on his estate? Takes-the-piss.
     
    Last edited: Feb 8, 2018
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  27. Fez909

    Fez909 toilet expert

    Exactly what happens now, except instead of 40%, it's 100%.

    If you want to keep the family home, you have to pay the market rates.

    To avoid the avoidance that goes with IHT, you'd have to tax 'gifts' from parents to children. Or set limits on how much they can give away tax free per year etc. That would be the tricky part.

    The 100% bit is easy.
     
  28. Teaboy

    Teaboy It definitely looks brighter over there..

    There are means of releasing that capital though, some more reputable than others of course. They could release the capital and live a very comfortable retirement whilst remaining in the house. I guess the primary reason that doesn't happen as much is people want to leave a legacy to their family, which is fine but we're back again to a situation where asset rich people would be paying less tax than poor people who will never be asset rich.
     
  29. kabbes

    kabbes "A top 400 poster"

    I’m soft on this. I’d only tax 100% in excess of something like twice the average house price. This would make administration easier and allow ordinary people to avoid too much horrendous upheaval.

    Excessive inheritance is toxic for a society and it’s even, if you actually read the psych studies, pretty bloody toxic for the individuals inheriting it.
     
  30. Rutita1

    Rutita1 Scum with no integrity, apparently.

    Inheritence tax isn't a blanket 40% on the whole estate though :confused:...it kicks in after a certain amount. When my dad died 5 years ago it was 40% on assests/capital over £325,000.
     

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