HieronymousBoschHobs wrote: ↑Sat Mar 21, 2020 12:37 am
Hi (again
) Paul.
I’m not suggesting we get rid of income tax. What I’m saying is that government revenues from income tax as a proportion of wealth have been decreasing decade on decade. More and more wealth is now contained in assets other than wealth generated through income. So in order to fund government spending worldwide, it is in the collective interest of governments globally to tax assets. It needs to be a global effort because the individuals/organisations of individuals holding the assets are not beholden to any one government.
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Which government's revenues from income tax as a proportion of wealth have (sic) been decreasing decade on decade? What does this mean?
Income tax is charged on income. Income arises from 2 sources: 1) employment (including self-employment) and 2) income earned by the assets you own. The latter can be split into a) dividends, interest, rents (less costs to maintain "working assets" and b) capital gains on the sale of assets at a higher price than the asset was acquired. (Have I missed any other sources of income)?
So, although there are some different rules on how different sources of income are taxed - and different allowances - generally, these incomes can be taxed and are taxed (putting aside "tax havens").
"More and more wealth is now contained in assets...." - I don't understand what you are saying: all assets have always been "wealth" (less any liabilities to own/acquire those "assets").
It seems that you are making an argument to "tax assets" in addition to taxing the income earned by those assets. Are you referring to financial assets? If it was "stocks and shares" what tax would you be collecting today when the stock markets are down, let's say 30%? And, the "stocks and shares" are not paying any dividends because the businesses are losing money? Or, are you thinking about things such as property? Let's say you've got a house worth £10 million (I'm assuming you only propose to tax the wealth of the "wealthy"). So, set the tax at 10%, where does the home owner get the money from to pay the £1 million tax? or set it at 1%, it's still the same question, where do they get the £100,000? And, what if they need to spend some money on maintaining their property? Or, let's think about one of the country's "favourite" billionaires, Richard Branson and Necker Island. How much tax would you charge on Necker Island - aside from the tax that may have been made by selling holidays on Necker Island (because that would be income tax)? Let's say you set a tax bill of £5 million a year on the owner of Necker Island. How much do you think Necker Island would be worth, if all it is is a tax bill of £5 million? My answer is pretty simple, it would be worth £nil. It would no longer be "an asset" - instead, if it can't earn income and tax is only charged on that income, it will be a liability. Best "tax dodge" in the world - don't own "Necker Island." So, how much tax will the gov't collect then?