To Labour anyone earning more than £70,000 a year is rich. Many people on such an income do not see themselves as rich. It seems as if having savings and assets is also a crime to some in Labour. Yet many people save hard for their retirement pension, and struggle to repay the mortgage on their homes. They do not see themselves as rich either. They also like it if something remains to pass on to their children. Today we are witness to a big debate about who is rich, and what contribution should they be expected to make to the wider society. In the recent UK election Mr Corbyn claimed that the rich as he defined them should pay more tax to help those on lower pay and pensions.
There is no agreed definition of who is rich. People’s idea of what rich looks like is heavily influenced by how much wealth and income they have. If you have nothing someone on £40,000 a year is well off. If you own no assets someone with a £200,000 house is well heeled. Someone living in a £200,000 house with a large mortgage, family commitments and an income of £40,000 may not have anything over at the end of the month and may feel a bit squeezed. They do not think they are rich.
A better description of rich is probably one based on lifestyle than on any particular figure for assets or income. Let’s consider two widows, as I have done before on this site. One lives on her own on a State Pension and top up benefits in her one bedroom flat in prime London. It is worth £1.2m but she has no other assets and finds it difficult to afford the living costs .All the time she lives there she is hard up. Another lives in a £200,000 larger property 200 miles from London and has £1 million in financial assets to augment her State Pension. She can afford a decent lifestyle. Are either of these millionaires rich? Or does a rich person need to be someone with a £1 million plus home of their own, and several millions in investments so they do not need to work but can live on their investment income? Or is true rich a senior Director or executive of a large corporation, or a footballer, with a telephone number salary and plenty of assets from past earnings? How much more of these people’s earnings should the state take?
In the end these are political judgements which have to be translated into tax law. All parties in UK government believe in income redistribution, taxing the better off more highly to provide support for others. Governments also impose some taxes on capital, usually when assets are bought and sold. These questions are also attitudes of mind which affect how people live together in society. If you try to tax at too high a rate rich people leave the country or find legal ways to arrange their affairs that thwarts the aim of the tax rise.
Many people with savings have thought it a good idea to buy an extra property or two and let it out. They like the rental income, and have usually benefited from rising capital values as well. It does mean the rich individual has a special relationship with his or her tenants. The wealth is on show, and there can be difficult relationships if the landlord is thought to be too hard or unreasonable. Modern tenancy law has tried to move the balance a bit in favour of the tenant. In a world where the leader of the Opposition says the homes of the rich if they are not being properly used should be requisitioned for those in need, the landlord has to be sensitive to the mood. The individual who has bought a holiday home or spare property which they do not live in may be unpopular in the community where the property usually stands empty.
In this climate of opinion those with higher incomes and assets have to be well on the right side of tax law. Tax evasion is a crime and some see clever tax avoidance as equally unacceptable even though it is legal. Portfolio investments in bonds and limited liability companies have advantages over direct ownership of property or companies for the better off , as the investor is shielded from much of the responsibility of ownership by the professional managers employed. If a multinational treats its employees badly or causes deaths by lax safety management it will be the well paid Directors and executives, not the shareholders, in the dock. If you are the landlord and the tenant is put at risk, or if you own the company and the employee is badly treated, you will be in the dock.
Limited liability companies were a great breakthrough for everyone because they allowed people to put up money without putting the rest of their wealth at risk. It also now means the investor lays off the risk for misconduct on those who run the company for them, which in the current climate is also important in keeping people investing. It should not be an excuse however for no-one being to blame.
Who do you think is rich, and what more should we expect of them?
June 21, 2017
Who are the rich? Those with more than we have. We see their assets but not their liabilities. Whose money is it? There’s the question.
I’d naively imagined that people owned their own possessions but a comment elsewhere the other day, from a Corbyn supporter, showed me my error: “There’s plenty of money in the system but it’s all being stolen from us by politicians and fat cats.”
So there’s the answer: we would all be rich but the rich have stolen our riches. All we have to do is take them back. Incidentally, I see that assets held in BVI have doubled this year. I wonder why.
June 21, 2017
Expropriate the expropriators?
June 21, 2017
JR, we read that May delayed the approval of the whopping 6 billion increase to the mid- term EU budget until after the election. The EU needed our vote for it to pass. Again, have our negotiators lost leave of their senses? Why would the U.K. Approve when the EU is trying to claim all sorts of things to their alleged divorce bill? Why not veto for short term and long term claims against us? This means they will claim the increase is added as part of our divorce contribution, it also means we pay a proportion extra until we leave. Why not say no? Surely this was the best possible outcome for the U.K. as we are leaving? Again, May cannot afford public services here but can afford to borrow money to give away to the EU, 700 million,going to youth unemployment in the EU! We are leaving and they want this commitment continued as part of an alleged agreement to future commitments! Is she plainly stupid?
June 21, 2017
Who are the rich? Those who despise the poor.
June 22, 2017
getahead
Really? getalife
June 21, 2017
First I would like government to stop spending/wasting so much, then it would not need to claim more from the rich.
If government tax take is 40% of GDP then take that amount off everyone, companies, and individuals (including benefit claimants). Folk can then feel their and other’s contribution is fair and may urge government to reduce its expenditure. This would also do away with stealth taxes as tax would need to be levied solely on income
June 21, 2017
The spending/wasting of “government” money is precisely how some people get rich!
June 21, 2017
Guido points the reality of the alleged austerity since 2010. Similar to what you did years ago. Why has your party not made this clear to the public rather than allow comrade McDonnell and Corbyn portray lies as fact? Hammond did not make this clear as a rebuttal at his stupid speech yesterday. Why is your party rolling over and accepting everything thrown at them? Is it to get EU light? Wake up.
June 21, 2017
The rich are those with inner peace.
They are able to expect nothing of others
but everything from themselves.
June 21, 2017
Absolutely I can barely think of one prominent “rich” person whose lifestyle I would want. If they did some serious reflection I am sure they would consider their “good fortune” to be something of a curse.
June 21, 2017
Some truth in that I was just as happy when I had nothing. As soon as you have money you have responsibility to manage it well and to stop, as far as you can, the government robbing it off you and then pissing it down the drain as they so love to do.
June 22, 2017
I would happily give away all my wealth to be a few years younger!
June 22, 2017
“The many must still labour for the one
‘Tis Nature’s doom-but let the wretch who toils
Accuse not-hate not-the wearer of the spoils.
Oh!if he knew the weight of splendid chains
How light the balance of his humbler pains!”
Byron,The Corsair
June 22, 2017
Pleb, I think this is the reason for a basic guaranteed income. Withiut such many cannot have peace since their minds are directed to the next rent cheque, email, bill etc.
June 21, 2017
Good morning
That is one of the central tennants of Socialism. The thing is they never explain by which means they intend to use to take that which is mine and give to another. In the past, and minder more Marxist regimes, it has been through force.
The way in which we both levy and collect tax needs to change. Taking it from source and placing it centrally is inefficient. Too much waste and it gives Central Government a too bigger appetite for money. Taxing through sales is a good way. The more you pay the more you contribute. Plus. Local taxes need to be increased whilst government taxes reduced to compensate.
Taxes should be seen and used to pay for things we need. They should not be primarily used as a means of wealth redistribution, and that includes the Climate Change SCAM and the International Development tax. Taxes are paid by us and should be spent on us. STOP VIRTUE SIGNALLING WITH MY MONEY !!
June 21, 2017
What do I think is ‘rich’?
Owning more than one home.
Even owning a holiday home puts most of them into the ‘rich’ category.
What I don’t consider to be rich is those, like myself, who live on a single pension and just happen to have lived, worked and retired in an ‘expensive property’ area.
The IHT cut-off of £325,000 is absolutely unreasonable in this day and age.
This should be upped to nearer £1M. Please.
June 21, 2017
£1million threshold each was promised by the ratter Osborne, but never delivered. Hammond clearly does not want to either.
In the USA a couple get about £8 million between them. So even £1m is pathetic £325K and then 40% is a complete joke. Why bother earning it paying tax on it just to have it stolen off you on death? It is a huge disincentive to the productive and make people leave the country with their money, jobs and businesses.
June 21, 2017
“While keeping taxes low”, the Queens just said (and while keeping a straight face, but then perhaps for the Royal Family they are, IHT over £325K would be a bit of a problem for them).
Rather a sick joke from this, tax increasing at every turn, Tory Party – under Hammond and May and also under Osborne and Cameron.
Still continuing with the bonkers May agenda on HS2, gender pay drivel, employment rights the Paris Accord and the bonkers green crap I see.
The sooner May goes the better, what a pigs ear she had made of it. Why did she join the Conservative Party? She is clearly a Libdims or even a Labour politician?
June 21, 2017
“make the NICs system fairer and simpler” so that will be more tax increases there then.
A daft bill introducing more red tape for letting agents, thus pushing up rents yet again for tenants, decreasing supply and inconveniencing tenants, landlords and agents well done dear!
June 21, 2017
Lifelogic, I’ve been meaning to ask for some time now. What exactly is a ratter?
June 22, 2017
A ratter is a type of dog that has been developed for catching rats and other vermin.
Or it is someone (rather similar to vermin in fact) who promises one thing but then rats on it. As in Cameron’s I am a “low tax Conservative at heart” and a Eurosceptic and give you “a cast iron promise”. Or Osborne with his £1M IHT promise still waiting Hammond!
June 21, 2017
I think the problem is that some people have wealth due to property prices increasing faster than GDP per capita, particularly in some areas. This is a result of luck and market distortions. The IHT threshold is only part of the argument, the distortions in wealth due to luck and market inefficiencies need to be reduced without the shift to corbyn’s socialism. L
June 21, 2017
JR the Conservatives can trump Labour on who they consider to be “rich”. If you earn more than £45k you cannot have any marriage allowance. If its £60k we are taking away your child benefit. While if its over £100k your personal allowance for income tax is going too. Just like Labour they engender a “why work” syndrome amongst they core vote. Want a pension fund of more than a million? We will tax it as well and if you want to put more than £40k p.a. into it we will stop that too.
Yesterday there was a minister on the radio proclaiming that the UK is going to get a “spaceport”. Its going to be in either Cornwall or Dumfries, checkout they comparative cloud cover to where NASA launches its rockets.. FFS where is the money coming from while the police are saying you are still going to cut their budgets further. How is this supposed to be worse than Corbynism?
June 22, 2017
DRW. A spaceport in Dumfries? Best mind the wind turbines then!! My, aren’t we lucky in Scotland – wind farms and spaceports!! Whatever next. Solar hardly works in this part of the world because of cloud cover for 40% of the time. Has anyone actually thought this through? I’m sure it will be Dumfries to appease the Scots once again.
June 23, 2017
If you were Labour you would be confident to know that however far left you travel the Tories will follow!
Tories used to be for strivers, savers and pensioners, all those who try to do the right thing for themselves or family. Allowing charity for those unable to work, not unwilling to work, giving a help up not hand out. Now they are destroying family, Christian values, no inc. Enti e to work, buy a house or put money aside for the future or family. No the state wants it all whether you are dead or alive!
June 21, 2017
Lets be honest.
The reason there is a problem is that you spent all the pension contributions.
The state has run up £420,000 of debt per tax payer and you have hidden that from the public.
If Mr Average’s National Insurance had been invested he would have had £1.1 million in the bank. You spent it.
The public now think they can shaft the poor even more by dumping student loans on them.
It’s the lack of investment and the hiding the debts that’s the issue.
June 21, 2017
The Government has to deficit spend to keep the economy moving. The main reason at the moment is due to the high trade deficit. About £70 bn in 2016
That’s money which leaves the economy to pay for imports that doesn’t come back as payments for our exports.
It has to be replenished from somewhere otherwise the economy falls into recession. Then no-one makes any thing from their investments!
June 22, 2017
You do realize that between 2005 and 2010, the pensions debts increased at 636 bn a year.
That’s why the Tories won’t publish the pension debts.
The increase is worse.
June 21, 2017
So if you want a solution.
1. Publish the debt.
2. Allow couples to share tax allowances.
3. Don’t under any circumstances allow 100 bn to go to Brussels and have to make swinging cuts in the NHS as a result.
Rephrase any money going to Brussels as cuts to nurses.
June 21, 2017
If you need cheering up on this hot day.
Here’s a list of remoaner leaders
Blair
Brown
Milliband
Cameron
Osborne
Clegg
Farron
Obama
Clinton
– all gone.
– Hope that brought a smile to your face
June 21, 2017
Not gone. Still working hard on reversing Brexit. Free to make alliances.
June 21, 2017
Indeed what about Michael Heseltine, John (ERM) Major, Ken Clark, Nick Clegg, V Cable ……all kept in the BBC cupboards and wheeled out to talk the usual BBC B***S***.
June 21, 2017
It did! Thank you. }:O)
June 21, 2017
All rich !!
June 21, 2017
All parties in UK government believe in income redistribution, taxing the better off more highly to provide support for others.
==============
Hence the debts you won’t talk about.
£420,000 of debt. 10 trillion of pension debts caused by redistribution, both civil service and state pension.
Most welfare is caused by lack of wealth because you redistributed other people’s money. The direct cause of wealth inequality
30% of taxes go on the debts because you redistributed the cash. Over 200 bn a year going on debts, and that is expected to rise to 50% of taxes.
Pensioner poverty cause by redistribution, hence you need to redistribute even more, making the problem bigger.
And then the lies start, none of it bar what’s owed to bankers is a debt.
June 21, 2017
You say:- “Modern tenancy law has tried to move the balance a bit in favour of the tenant.”
Well perhaps except that, the IHT ratter, Osborne increase stamp duty on homes bought to let by 3% and taxed the landlords on profits they are not even making by changing the interest deduction laws. The foolish Hammond has retained this and upped insurance tax too by a further 20% for good measure. Thus decreasing the supply of homes to let and further pushing up rents by perhaps 10% or so for tenants. If Corbyn ever got into office the rental market would die a death very quickly indeed. This as no one could be sure if they would ever get their properties back.
Tenancy law is rather like employment law, the more “protections” you put into law the worse the supply of properties to rent or jobs on offer is. You make matters worse not bettter. Just the prospect of Corbyn is already damaging supply of properties to rent and damaging the economy hugely.
If you want more properties and cheaper rents then relax planning, reduce red tape, cut taxes, have sensible tenancy laws, sensible employment laws, cheap energy and all the things the rest of the economy needs. T May is essentially the same as Corbyn a tax borrow and tip down the drain, red tape pushing, expensive energy, prices and incomes controlling socialist at heart. More gentle than him perhaps, but totally misguided. Lacking any sensible up lifting vision.
June 21, 2017
In a world where the leader of the Opposition says the homes of the rich if they are not being properly used should be requisitioned for those in need
===============
Article 1 of the human rights act.
Corbyn is prepared to break human rights law.
Why not make that an offense with a minimum 1 year term for a politician to suggest breaking the law?
June 21, 2017
It’s a pity you (and others) spend so much time and effort focussing on this side of the coin, and missing the elephant in the room on the other side.
Use the 80/20 rule here. Spend 80% of your thinking power on how to spend effectively the money you raise, and 20% on how to raise the money you spend.
Also you’re missing the point that HOWEVER rich somebody is, they will resent the government misspending £1, when if they perceived that the government was spending the money effectively they would be far happier over parting with 20% or even more if deemed necessary. Also in that case 20% of income would be all they would have to part with.
June 21, 2017
Great article.
I think we need to have EMPATHY towards everyone (and that includes our politicians behind their policies and the work they do). Everyone has the their particular challenges in life whether you’re born *royal, upper class, middle class, working class, poor / destitute.
(*Did you know that Prince Philip was born relatively poor for someone of his background? Did you know that Prince Philip’s mother risked her life to help Jews during WW2 and is now Righteous Amongst Nations? Did you know that Prince Philip’s aunt, Princess Elisabeth of Hesse and by Rhine is now a canonised saint in the Orthodox Church for dedicating her life to the down-trodden poor of Moscow as well as forgiving and trying to find pardon for the murderer of her husband. This good, holy and pious woman was eventually murdered by the Bolsheviks).
(And, yes, the ‘rich’ and powerful could be very unjust and cruel and mean to the ‘poor’ and vulnerable back then in Russia, and still today, around the world, and in our country as well).
The ‘rich’ can have their financial struggles as well as be emotionally down-trodden through no fault of their own (born into an unhappy, unloving family life, whatever) where as the ‘poor’ might be financially ‘poor’ but are emotionally wealthy (born into a happy, loving family).
The worst off are those who are down-trodden both financially and emotionally (born into an unhappy, unloving family who are also financially poor).
Don’t forget, also, that a lot of people are able to do better in life than others because they are born with more intelligence, energy and charisma etc .. Even though others might be working just as hard but with far less to show for it.
Things are rarely black and white.
June 21, 2017
And we must protect our people from socialists who just vent their unhappiness about life on others (e.g. the ‘rich’) and we must also protect our people from raw capitalists who reduce everyone to objects and numbers to be manipulated and used for no other purpose than their own personal gain. And we must protect our people from those unhappy in life in general and who go after the vulnerable in general, whatever background they be from.
Yes to capitalism but not raw capitalism. Yes to democracy but not socialism.
June 21, 2017
And if we are born rich / wealthy, then we should try and take a leaf out of the lives of people such as Prince Philip’s mother – the courage and generosity she showed towards vulnerable people (in this case, the Jews) and to Prince Philip’s great aunt who showed extraordinary generosity towards the down-trodden poor and was full of forgiveness for those who truly hurt her (like the man who murdered her husband) – a truly, human/Christian woman.
June 21, 2017
‘Princess Elisabeth of Hesse and by Rhine is now a canonised saint in the Orthodox Church for dedicating her life to the down-trodden poor of Moscow’
– Every politician should read Tolstoy’s books for his vision how ‘peasants’ (or the lower classes) should be treated. Generally, the heroes of his books, treat their ‘peasants’ well, and he presents these peasants as having a beautiful vibrancy about them, as opposed to the more down-beat, melancholic Russian peasant we might be more familiar with from history.
If more politicians and others had taken Tolstoy more seriously, the Russian Revolution, no doubt, would have been averted. Conservatives must always remember that a dissatisfied working class / middle class will always bite back if they feel unfairly treated, and in today’s world, that means voting in Labour.
June 21, 2017
‘from history’
– from some history books, i meant.
June 22, 2017
Try balancing your Tolstoy with a little Lermontov or Dostoevsky-much more appropriate for our times!
June 25, 2017
Thanks for Lermontov recomm.
Yes to Dostoevsky. Great. Read all his best except Demons, his most political.
June 21, 2017
The “protections” for tenants would also deter banks for lending on property rentals thus pushing up rents yet again.
Vote for Theresa May, I am a daft socialist but not quite as daft as Corbyn. This is not a good way to sell youself to the voters. Where is the uplifting vision for a booming economy, lots of houses to rent or buy and plenty of jobs available?
I do not really care who is rich or not not rich. If you are healthy, somewhere to live and have enough to eat you are rich enough. If you want to be richer go out and get a better job. The way for more people to be richer it to kill as countless, essentially parasitic, jobs as possible in the state sector (and in the private sector due to daft red tape and laws). Release these people to get real & productive jobs.
Far too many people produce nothing of any real value – lawyers, tax planners, HR consultants, bureaucrats, employment tribunals …….
This is best done by having simple low taxes, far, far less red tape, real and fair competition, easy hire and fire, more freedom and free contracts that are respected and cutting the size of the bloated state sector. Also killing the dire state monopolies in the NHS education, the BBC and so many other areas.
June 22, 2017
‘BBC’
– I agree with a lot about what you say except the BBC (and yes, i agree, BBC can be left-wing / liberal and needs real challenging here).
The BBC is a great opportunity to create great TV (nothing to do with politics) in the arts and entertainment: arts documentaries, film, comedy, children’s programmes, nature programmes, and so on.
It’s done it in the past, and can do so again, in future – if challenged proactively and imaginatively. Only the BBC could have produced, for example, the brilliant production of Jane Austen’s Pride & Prejudice.
The BBC is a great vehicle to promote patriotism (love of country – a very Conservative virtue) through the arts. And regarding the arts, don’t forget, we’re the country of Jane Austen, Shakespeare, Chaucer and so many others. The BBC is also a great feeder of talent to the private, creative sector – an important revenue for HMRC. And good TV is good for the human beings – for their minds and general well-being which in turn impacts on the way we work and behave towards each other.
Commercial TV has its obvious benefits, but there is so much it cannot do.
June 23, 2017
Ed Mahony: “The BBC is a great opportunity to create great TV ”
Once perhaps, but no longer.
Ed Mahony: “It’s done it in the past, and can do so again, in future ”
Nope. the rot is too deep.
Ed Mahony: “Only the BBC could have produced, for example, the brilliant production of Jane Austen’s Pride & Prejudice.”
Nope, but with the whole canon of British literature, it produces East Enders – and uses the series for the promotion of bastardy, welfare dependency and criminal behavior.
Ed Mahony: “The BBC is a great vehicle to promote patriotism through the arts. ”
Except it doesn’t. It is a subversive operation which has been instrumental in the degradation of British Culture, for at least thirty years.
Ed Mahony: “The BBC is also a great feeder of talent to the private, creative sector – an important revenue for HMRC.”
As a state funded operation, the profit loss balance sheet for the BBC is marginal to put it mildly. But once you take into account the cultural vandalism the organisation has perpetrated, it’s a net deficit.
Ed Mahony: ” And good TV is good for the human beings – for their minds and general well-being ”
Nonsense, TV turns people into insular mindless droids. Civilized people don’t need TV for their general well-being, they need a robust social nexus. And by keeping people glued to the screen, the BBC helps to destroy the ties of civilized society.
June 25, 2017
‘Nonsense, TV turns people into insular mindless droids. Civilized people don’t need TV for their general well-being, they need a robust social nexus. And by keeping people glued to the screen, the BBC helps to destroy the ties of civilized society.’
– I agree, TV can be really bad. But people are inevitably going to watch it. What we don’t want is the even worse TV culture that I experienced in the USA, working there as a student. A huge amount of drivel (including violence etc) – even worse than here.
Regards
June 21, 2017
As I have previously indicated the Labour policy on at the GE that I thought reasonable was the Land Value Tax, with reasonable calculation this addresses unearned capital appreciation of houses, limits landbanking and supports redevelopment.
Wealth and income both have the problem of luck, many try to contribute as much as each other, but through luck earn or achieve less. Whilst it is true that some do nothing even though that are able, not all those who haven’t ‘made it’ are idle or unskilled. Sadly many who are more successful do not recognise the stochastic component. I have no answer but if returns are greater than GDP growth, but a large slice is luck (inc right land, right parents…) then this is where tax should fall – since there is no reason to think allocation decisions will be better.
June 21, 2017
The climate of class hatred and envy which Jeremy Corbyn and the hard left are trying to foster is both unpleasant and a huge risk to the UK during and after the Brexit process. For all his other faults and mistakes, amongst Tony Blair’s achievements was to move Labour firmly off this kind of politics. If there is a material possibility of a government headed by someone who urges Venezuela style property seizures, which business or investor in his/ her right mind, who has any choice, will remain in or come to the U.K.?
June 21, 2017
The thing is the whole system is now so rotten and resistant to reform who is going to go out of their way to defend it?
It sounds facile to say this but there is a similarity to pre-revolutionary Russia -in the end everyone (except possibly the poor deluded Tsarina) knew the revolution was coming,they just did not know the shape or form it would take and even those quickly swept away by it egged it on or acquiesced in it.
June 21, 2017
Exactly and May’s breath taking socialist incompetence has made this far, far more likely.
June 21, 2017
Part of the problem of defining ‘richness’ is that lot depends on age. It is natural that a person of 50 should have more assets than a person of 25, having had twice as long to accumulate them. Moreover, person of 20 with no dependents, no assets and no mortgage can feel wealthy on £70K while the same person with dependents and a mortgage on the same salary at 40 will feel poor.
I’d suggest that the solution is to tax consumption rather than assets and income.
June 21, 2017
Agreed !
June 21, 2017
Still doesn’t work. Have you seen how much parent-dependent teenagers at home or university consume ?
June 21, 2017
You ask who do we think is rich? I say how long is a piece of string? My own aim is to be able to provide all my family needs in an owned house commensurate with our size and a reasonable garden in a safe area where we do not feel ‘different’. Additionally I would like a car that is comfortable, safe and reliable, one holiday to a destination of my choosing with a couple of other trips per year, sufficient and quality clothing and extra curricular activities for the children.
I earn a reasonable sum and can not deliver my expectations. I buy value products from the supermarket and use Amazon and Ebay for other purchases so am not profligate. I am taxed on my entire earnings which also equates to the household earnings. Other households with two earners taking home the same amount as me but both under the 40% threshold get two tax free allowances without paying 40% over the limit. Plus they get child benefit. These people are as much as £7K per year better off than me (15% of take home income.) I would feel more comfortable in their position. How is it fair to charge individuals tax rather than households in this day and age?
As mentioned above I do not get child benefit as I am rich. How is someone in London earning £50K ( just two lots of mean salaries which must be earned by most households ) be rich?
June 21, 2017
I would far prefer to see wealthy families and individuals and businesses left with their own money (who can and usually do invest sensibly) rather rich governments who tend to destroy wealth and any incentives to create it. Governments who so like to piss money down the drain on bureaucrats, buying votes, HS2, Hinkley C, endless corruption, corrupt overseas aid, appallingly inept defence systems & procurement, incompetent fire regulations, incompetent and uninterested police, dire social services, the appalling monopoly of the NHS and education system, the subsidies for wind, PV, biofuels, the expensive energy agenda, generating more red tape and countless other entirely damaging activities.
June 21, 2017
Hear hear!
June 21, 2017
I believe the Queen’s speech mentioned extending HS2 to Crewe. Oh Mr Porter!
June 21, 2017
I think that someone on £70 a year may not be rich, but they are certainly not poor! Politicians routinely earn this, and more. I have a very close relative who lives in London and works for the public sector. Salary – £24 before tax. Without help from family they would not be able to live and work in London. There was a pay freeze for 3 years, and then a 1 per cent pay rise (Politicans awarded themselves an 11 per cent pay rise)!
I dont think the very rich should be especially ‘hammered ‘ provide they pay the tax that is due, and do not squirrel it away in offshore bank accounts. These loopholes should be closed in my opinion.
June 21, 2017
Those figures should be £70 thousand and £24 thousand, of course. My error.
June 21, 2017
If you’re young with a young family anywhere near London/SE you are brassic on £70k.
June 21, 2017
Jeremy Corbyn, he’s rich.
June 21, 2017
We in the middle neither rich nor poor are the real losers.
Our savings are decimated by ZIRP and our pensions ravaged by extortionate council tax and fuel bills.
Only the very poor or very rich can afford to live in London.
The middle people have to commute at astronomical cost.
We are comfortable but wait till Corbyn has confiscated everything due to an entirely own goal by May.
We are comfortable not rich but wait
June 21, 2017
until Corbyn confiscates everything all because of a stupid own goal by May.
Who is pulling her strings.
June 21, 2017
Cameron. Mrs May has just appointed Gavin Barwell as her chief of staff.
June 21, 2017
Young deprived of any opportunity to own property vote for confiscators.
June 21, 2017
Also, we in the middle do not have access to justice. The wealthy can afford legal fees. Criminals living on benefits (our money) get costs paid for by the state (our money). Middle class people dare not take the risk of losing everything in order to seek legal remedies when we are wronged, especially by wealthy firms or individuals.
June 21, 2017
You ask, “Who do you think is rich, and what more should we expect of them?”
Who is rich? Well almost everyone in the UK who is healthy, has somewhere to live and enough to eat. So stop winging and get a job and make a life for yourself no one else will.
What should we expect of them?
To work hard or invest or spend their money wisely on sensible things or give it to sound charities (about 10% of them are I find by my definitions) and not to waste it on bling, over indulgence and other dross. To create jobs and incomes for others by investing and thus to create more wealth for the nation and its people.
Above all they should do whatever they can to prevent the government and politicians taking very much of the money off them. This as governments nearly always waste it and destroy incentives and the economy in the process. They should also do whatever they can to keep Corbyn politics of envy out of power and try to get the Conservative party under the control of real Conservatives with some positive vision, rather than the current wet ex(?) remainers, tax borrow and waste, green crap, interventionists & socialist losers like T May.
June 21, 2017
John,
I think your arguments are, again, quite logical and well thought through. The problem we have is that by going over this ground again and again we’re giving legitimacy to the left’s argument to “tax everything and argue about the details”. We’re giving them the ground to start with and they don’t need that advantage: they’re offensive and aggressive already. It’s as if we’re parrying the left’s blows and assuming we’ll win on the judges’ decision, rather than attacking their core, wrapping them in knots, and taking them down, and winning before the end of the contest.
Kind Regards
June 21, 2017
You are rich if you are in the top 10% in either income or wealth. You are poor if you are in the bottom 20% in both income and wealth. Otherwise you are in the middle (which is likely over half the country). Both your widows are rich. The first widow could do a reverse mortgage and live perfectly well but presumably instead chooses to live badly so her (no doubt undeserving) children / grandchildren can inherit more. OK, reverse mortgages currently are a bit of a ripoff, but that is because the financial services industry is allowed to get away with it. (How many mis-selling scandals do we need before even Mr Redwood admits there is a problem.)
Nobody (much) would mind about second homes if house price inflation had not been so high (relative to other price inflation) since the Tory (Thatcher / Lawson) government enacted policies which encouraged this result in the 1980s. (And continued by Blair, etc.) The young have been particularly badly impacted by this. The last Tory government thought it would be a good idea to “solve” this problem by increasing demand (by subsidising certain people to buy houses) rather than increasing supply and restricting foreigners from buying houses. No doubt Mr Redwood can recite the Tory propaganda word for word about what a great job the government is doing on this front, but house prices speak for themselves. The main thing that might actually return house prices to a more sensible level is trashing the economy, which both Labour and the Tories seem keen to do (the former with crackpot Marxist ideas, the latter with crackpot Brexit).
June 21, 2017
Defining who is rich is a waste of time. How long is a piece of string?
The objective needs to be to incentivise individuals at all levels of society.
June 21, 2017
Following on from the definition of an alcoholic (someone who drinks more than his doctor) – maybe the definition of rich is someone who is better off than their MP. As to what we should expect from them, maybe we should expect them to be nice people – with all the moral obligations which flow from that !!
June 21, 2017
Money isn’t everything. So long as good British beer is available for under £1.50/ 500cl and the body and mind still just about function, I am not too grumpy. Jezza and his revolutionaries would classify me as very rich, but my income is about the national average. If he brings in a property or wealth tax, as Hollande did, many like me will move abroad, as they did in France. We can read and get tv on the net and import British beer, while enjoying a health service less likely to kill us than the NHS.
June 21, 2017
John, 24 hours after posting comments criticising your government as I did yesterday, and as I often do, it can’t be a coincidence that as usual they are ‘still waiting for moderation’ Do you censor or delay all comments that point out the ineptitude and anti-Englishness of your government?
June 21, 2017
He has done the same for me pointing out at what level the Conservatives consider people to be “rich” when it comes for them to paying more and more tax.
June 21, 2017
Ditto
The charges that you make against our kind host have been made by others elsewhere. That is no coincidence.
But the truth, no matter how uncomfortable, must be told. And will be told, if not here then elsewhere.
June 21, 2017
Why not start your own blog?
You can then drone on as much as you like.
June 21, 2017
JoolsB
You would really need to know how many comments he gets per day and how many people he has helping him read them. Ask him that maybe. I dunno.
June 21, 2017
Mr Redwood is busy and this is a voluntary site. Be patient. If you want better then expect to pay a hefty subscription for a secretary to be employed.
June 21, 2017
I think JR is in general extremely fair and diligent in allowing postings in general, although several of mine do not get through. I am trying to limit them!
I am very impressed that he finds the time. It is clearly his site & he can clearly do just as he wishes.
June 21, 2017
In any society everyone ought to be able to aspire and achieve ; if this aspect of challenge is missing , there is little reason to try and to plan . We do not want a society that encourages hand-outs and benefits ; such a condition only leads to stagnation and disintegration . Those who have strived and succeeded stand as an example to everyone ; they should not be seen as unwelcome and undesirable individuals .
Those who are not able – through some physical or mental incapacity to work and to achieve need to be taken care of ; those who simply lay-about and obtain benefits ought to be punished and ostracised . Those who are “rich” and seek and use tax avoidance schemes need to be fined so heavily that they are “rich” no longer ; being in a community implies fairness to all and sharing ; it does not mean destroying incentives .
A It is the responsibility of Government to sort out and to implement standards that maintain balance and aspiration ; as time passes such standards need to be modified to accommodate all external and internal conditions . Democracy lies at the heart of this guidance and reflects the will and purpose of voters . Change is a gradual and long term process and the normal period of Government does not fit easily into this responsibility , Equally the present condition of Party representation – considered to be divisive , has to be modified ; perhaps the Party system ought to be abolished all together !.
Most people learn to live within their means and to adapt to their enviroment ; putting a figure of what is rich and wealthy depends very much on where one lives . The very bed-rock of success is preparation and persona .
June 21, 2017
I am not sure that I agree with you about the liabilities of directors and shareholders in limited liability companies.
The directors may find themselves ‘in the dock’ but usually only as agents of the corporate body, the company. Unless there is clear personally as opposed to corporate misbehaviour there will be no penalty applied to the directors, at the worst they get a ‘golden handshake’ as they leave and another as they join a new company. Any fine will be paid by the company, reducing its worth, an ‘invisible’ loss to the shareholder, but real.
Directors claim to be paid for ‘responsibility’, well let them pay any fine, (set in proportion to their salary). I can see the point of fining the corporate body for safety infringements, say, when that money would be better spent, (for employees, customers and society), on improvements. A ‘small’ fine on the directors is a slap that says, “Do better!”.
Your debate on ‘wealth’ should also consider ‘safety net’ versus ‘benefit careerism’, ‘prudent’ versus ‘spendthrift’.
June 21, 2017
The politics of envy has really taken hold in this country.
The idea of confiscation of peoples assets by IHT could possibly be justified when we had sugar barons living on huge fortunes while the poor queued at their back door for the chance of entering service.
However, the govt are now forcing bereaved children to sell their family’s modest home to pay IHT, while shovelling billions into a black hole of foreign aid, and a welfare system open to anyone who rocks up at Heathrow airport from anywhere in the world claiming assylum, only to fly back to their home country for a “holiday” once their British “Citizenship” is secured.
Death taxes do not affect the truly rich who have the means to put their assets beyond the reach of the UK taxman.
On the other end of the scale, the minimum wage and the personal tax free allowance should be pegged to each other, otherwise there is no mechanism to curb the govt’s min wage “generosity” in their quest to buy votes.
For the sake of brevity I will cut to my answer to your question; the truly rich are those whose wealth is sufficient to enable them to avoid UK wealth confiscation, (by living offshore ed)
What should we expect from them? We should expect them to obey the law and pay their taxes.
The govt should not concern itself with the relative levels of wealth of it’s citizens, they should concentrate on keeping their own spending habits under control, which would obviate the need to continually steal from us.
The obvious excesses of fat cats could be better controlled by removing the rules which disenfranchise people who own shares through ISAs or Pensions, thereby allowing the said fat cats to vote each other pay & bonuses beyond the dreams of the average person.
June 21, 2017
Rich is what this country would have been, per capita, if it hadn’t brought in so many extra millions to fuel the class war. Now we are stuck with that, and the numbers of new Corbyn voters reflected it. The Conservatives were winning the class war until John Major took us into the ERM and until the population was increased.
June 21, 2017
£70k requires a 5x salary mortgage to buy a Grenfell Towers flat. An abode which Labour have just described as poor. I doubt Mr Corbyn had to manage a 5x salary mortgage.
June 21, 2017
Anyone starting out in London/SE is poor on less than £100k a year.
June 23, 2017
Anon: “£70k requires a 5x salary mortgage to buy a Grenfell Towers flat.”
In light of Sadiq Khans exhortations that illegal immigrants living in the Grenfell tower are ‘too frightened’ to come forward for government assistance.
One wonders,
(a) how an illegal immigrant could afford to live in Grenfell, without sharing an apartment with a number of others. Over crowding in the tower may possibly led to higher number of deaths that would otherwise have been the case.
(b) Why should the perpetration of a illegal, unlawful act, facilitate the transfer of government funds to recipients who have no business being in the country at all?
Sadiq Khan as a member of a lawful authority, should not be encouraging lawlessness.
June 21, 2017
Such a big topic, so where to start.
Simplify the system for a start.
All people should be treated on the same basis, with the same personal tax allowances (no tax paid for minimum wage level based on 40 hours per week.)
Tax rates to be fair (whatever that means) and if incremental then smaller rate differences, and the allowance levels/stages to rise with inflation each year (no fiscal drag).
National insurance to be ring fenced for State Pensions, NHS provision and basic Social care for all, if you want extra you then pay for it.
Any and all Benefits to be added to earnings or pensions, and to be taxed as income after Personal tax allowance. (No means testing)
Lower Single rate of Sales tax on everything, except housing purchase, rents, food, standard utilities, power, water, insurance of all kinds, and educational/training programmes, fees.
No multiple taxes on any product, just one simple standard rate sales tax.
No need for a Capital gains tax as this will be covered by the standard sales tax.
No limit on financial gifts, if you want to give away your money to whoever you wish, then its your choice, its your money.
The tax will be paid when monies are spent (sales tax) by the recipient.
Do not believe in the redistribution of peoples personal wealth by others, as its personal and people have already paid tax on it once.
If you feel rich in financial terms, then you probably are !
Could go on and on, but trying to keep it brief.
June 21, 2017
Mr. Redwood,
Not on subject but more immediately important; can you inform us of the Government’s position on contributing to the EU ‘military capability’ plans. It is reported the UK is going to be a part of this folly, to be signed tomorrow. Our agreeing to their plans is reasonable, as long as we don’t become a paid-up member of it beyond March 2019.
Please comment soonest, thank you.
June 21, 2017
As this is a new venture, decided upon after we voted to leave, surely we must be able to opt out of paying towards it ?
In any event, most of the money will actually be spent after June 2019.
June 21, 2017
I know someone who is in a senior position in a publicly quoted company and earns around £150 k per year. She also has a nice house in the country (with a large mortgage). This should be enough to put her family in the ‘comfortably off’ bracket if not the rich bracket.
However, her husband has MS and cannot work and two school children who attend a local secondary school. Hers is the sole source of income. In addition they now have to employ a gardener, a person to clean the house and a dog walker.
Her income already means that she doesn’t get any child allowance which effectively puts her tax rate for £100 k to £120 k up to (is it?) 63% for that portion.
Had her husband and she been earning £75 k each their joint tax bill would have been considerably lower. Corbyn’s tax proposals would simply exacerbate the unfairness of being a single provider of the family finance.
June 21, 2017
Rich people are people who have enough resources to pay their way in life including paying their bills with ease and without worry- they are people who can sleep soundly at night and waken in the morning well refreshed.
On another note one of the reasons Theresa May got it so wrong during the election was the intention to introduce the so called dementia tax.
Consider – my neighbour and I both worked at the same job for decades and are now both retired, I was careful all of my life, I bought my own home and have sufficient funds saved in the bank. My neighbour wasted all of his money throughout his life with holidays to Spain twice a year and the purchase of fancy cars etc- he has no savings and he does not own his house he rents. So now that we are both in need of care in our old age- when we die Mrs may proposes to confiscate my home to pay for both myself and my neighbours care in old age- hardly seems fair
June 21, 2017
JR: “To Labour anyone earning more than £70,000 a year is rich. ”
Making the whole of the shadow cabinet ‘Fat Cats’, then.
June 21, 2017
I don’t think Labour is saying that everyone earning over £70k pa is ‘rich’ but rather that they can afford to be taxed more. In the next Election campaign I hope the Tories are more confident in this area and even link it to Brexit – pointing out to Labour, and the electorate, the evidence that higher tax rates often result in a lower tax take. Also that a true Opposition could adopt quite a radical stance – regard the entire £19bn pa current EU contribution as potentially available for some redistribution which could take a number of forms. These could perhaps include proportionately more funding for further education colleges rather than universities with consequent employment opportunities for less well off young people, and improved skills as required by industry and needed post Brexit.
June 21, 2017
I run my own finance business. We see many ordinary couples that earn more than £70k between them, but Labour would leave them alone EVEN THOUGH THIER NET PAY IS GREATER THAN THAT OF AN INDIVIDUAL ON £70K.
Example enquiry from this week; Senior nurse with OT on £55k in Herts and her partner a warehouse manager is on £37k. £92k for a couple is completely normal in and around London.
Left wingers would think these people rich, which is utter nonsense.
BTW – we get a lot of newly arrived African Nurses working for agencies, and easily making £50k each, so often see couples on £100k literally having just arrived in the UK, and yet qualifying for all sorts of State assistance.
There is far more money around than the left realise. I routinely see firemen making about £33k but that run a business on their many days off, for example one has a window cleaning round, cash in hand, making £6k pm and another owns a pool maintenance business making about £85k pa from that. Self employed incomes reflect much lower than the reality, thanks to good Accountants and for example paying 30%+ of your SE income through your spouse (‘book keeper’).
June 21, 2017
You mention the houses/flats in London and their relative costs. How many people who have walked into this country with nothing, then done nothing since arriving, are now living in housing in London, worth far far more than the housing that the people who have their taxes took to pay for the “new” people to live in them. Those who are paying for, but can’t afford to live in, expensive housing, are probably working hard to fund their own lives, houses and families – yet through taxation are seeing less and less services, as more and more cash has to be diverted to pay for the lives, houses and healthcare of those who have arrived and done nothing.
As for the term “rich” – it is relative. I class those new arrivals mentioned above as “rich” in the sense that coming from a country, where they have nothing, they arrive here, do nothing, then the govt gives them free money, free NHS -with longer appointment times to cope with the translation problems, free schooling for their children, and the councils can always find housing, despite having English people who are homeless.
” How much more of these people’s earnings should the state take?”
Not only what amount you take – It is what you do with whatever you take. Throwing it away to corrupt leaders as foreign aid, while importing thousands to come, sit down and get a taxpayer funded life for doing nothing is causing more and more tension. It is madness – but is clearly deliberate.
June 21, 2017
Wealth is a better generic term. Tax is mostly a legal and/or political question, not a moral one. And it does not exist in a vacuum. You have to account for funding the political decisions made in Parliament. The deficit is a stark indication of how badly politicians since Lady Thatcher have done at this. There is a problem, which you have highlighted often. There is a moral, or at least a fairness, dimension about the system we have and your examples are useful in demonstrating the absurdities that arise from misusing the system to achieve other political ends, such as wealth distribution. A proper solution to this is to simplify the system. Less types of tax, and simpler rules (so less wriggle room). And for income taxes, start collecting above the minimum wage. I think you also have to account for the negative taxation arising from our overly complicated welfare system. Reliance on “the state” is not a good thing. Wealth distribution might be a good thing, but it is a political thing and muddling the tax system to try and deliver it demonstrably does not work.
June 21, 2017
I would say the rich are people who don’t care which party gets elected because in the worst case they can afford to emigrate.
June 21, 2017
I cannot think that many of the rich want a Corbyn government, or indeed a soft socialist May government. Most of the rich can clearly see what a compete con a Father Christmas Corbyn government would be.
But also what a dire lefty dope, T May is – but hugely better than Corbyn and Venezuela.
June 27, 2017
Sorry LL. Lots of rich people I know voted for Corbyn. And they don’t all live in Kensington. This is not a new phenomenon. Also, some people in the media are clearly very rich and have always supported the Left. So do rich celebrities.
June 21, 2017
Our thinking about those who are better off than us is being influenced by two schools of thought. Socialist, progressive and those with emotionally shaped views are of the belief that we should milk them of their wealth until they have equal status with those who have less. Free market capitalists believe that we should use entrepreneurship, innovation and investment that comes from the savings/profits of wealthier people and companies to improve the wealth of those who have less if not to an equal status but to that of equal opportunity.
The first school of thought has always been more attractive than the second as it promises a free ride, something for nothing for some sections in our societies and of course fits nicely into our predisposition for envy. It is practised to varying degrees everywhere using a variety of methodologies to implement it. The experience has shown and is showing that by doing so it does not lead to the promised outcomes. In fact the more it is practised the worse are the outcomes in many cases leading to abject failure. So the debate should not be about dispossessing the better off but how to ensure that their surplus wealth is being used by them productively and fairly. Generally that is the case anyway it is usually only government interference, laws, regulations and unrealistic expectations causes misuse and abuse.
June 21, 2017
My parents think anyone earning more than £70k p.a. are rich but not themselves – despite living in a house which needs an income of more than £140k p.a. to buy!
June 21, 2017
“Who do you think is rich, and what more should we expect of them?”
John, really?…..is this meant to be some sort of a serious debate? Respectfully, I find your question rather disingenuous!
You, we, know the real reasons for the lack of wealth distribution in the UK?
Many people will no doubt disagree with me, vehemently in many cases….wealth is constitutionally held (so called constitution of the United Kingdom is a sum of laws and principles that make up the body politic of the UK for the intrinsic benefit of the wealthy!).
Start with the Monarchy and work down from there…..this is hardly a debate as most intelligent and educated individuals know implicitly and tacitly the real issues?
June 21, 2017
With property in the hands of the few expect fewer Tory voters. Mrs Thatcher knew this well.
A landlord with a portfolio of properties for rent offers one Tory vote and a portfolio of Labour voters.
A town full of holiday homes has no Tory voters and a lot of angry Labour ones.
We have to make property less appealing to the landlord class (controlling mass immigration would be a good start.)
It may be interventionist but socialism is an inevitability if we don’t do something about it.
Lifelogic is a minority. Property is going to end up being confiscated whether we like it or not.
You keep denying the masses a stake and they will turn to the confiscators. This is why Corbyn has appeal.
If they’re clever or skilled they leave the country. A kid doesn’t train to be a doctor just to be Lifelogic’s serf.
June 22, 2017
I try to avoid doctors if possible, but I would never consider them to be my serf. Just someone I employ to do a job like the gardener, plumber or builder. They do not have to do it if they do not want to after all.
June 21, 2017
Dear Mr Redwood, Personally I do not regard MPs as rich (ex officio) although your base pay is £75,000 and, even today, allowable expenses and pension arrangements would probably make that the equivalent of £80-85,000 pretax for most people – with even junior ministers, committee chairs and so on earning substantially more. Nor would I regard GPs or head teachers as rich. And what is true of people in the public sector must also be true for professionals or managers in the private sector.
The problem is that a large swath of the population, typically those in the third quartile of income distribution, have been doing badly for years, with modest or even zero rises in real income, low returns on small savings, reduced pension prospects and house prices rising beyond their reach, while they see big rises in the price of assets they do not have.
One cannot blame people resenting the many thousands in London who make a quarter or half a million a year from trading in these assets and use the proceeds simply to finance conspicuous consumption and buy up more assets.
The Labour Party’s mission should be to maximise the sustainable improvement in this group’s living standards, from which almost everyone will benefit. That will not be achieved by taxing income and wealth more to raise benefits for those in the fourth quartile. It is much harder than that.
The Labour Party’s mission should now be
June 21, 2017
Anyone earning/making more than £200,000/year say, is a thief as they are charging too much for their services/products.
If that is the salary the employer is charging customers too much to be able to pay such salaries.
June 21, 2017
Anyone earning/making more than £200,000/year say, is a thief as they are charging too much for their services/products.
>
The communists managers at the NHS and local councils pay themselves like this.
June 21, 2017
We will be getting the best prison football teams in the world.
June 22, 2017
Indeed!
You are only a thief if you demand money with menaces or threat of violence or imprisonment. Only criminals and the state do that. No one has to buy anything if they do not want to.
June 21, 2017
Unfortunately there are millions of people in the UK who have a huge sense of entitlement. They believe it’s the duty of the State to provide them with excellent Public Services and a generous Welfare system. The only fly in the ointment is that they don’t want to have to pay for this through their taxes. They are however fine with it as long as someone else pays.
June 21, 2017
Agree Robin. I stood behind someone who I know for a fact is on every benefit going. Her shopping trolley this particular day consisted of Coke, fizzy drinks of all kinds, chocolate, sweets, biscuits, cigarettes, crisps and to round off she bought 3 scratch cards!! No wonder they are ‘only just managing’. Compared to us I thought she must be rich as we cannot afford to load our shopping trolley like this and eat proper food!!
June 22, 2017
And this is encouraged by government in its policy of state control of wages via the Living Wage. Businesses are being forced to act as an arm of the state in this respect. The State provides. The State controls. Mrs May is keen on all embracing State. A Conservative – I think not.
June 21, 2017
The topic today is all bunkum and is just another diversion from the serious infighting that is going on inside the tory party .. and meanwhile the whole world is looking on
Hands up all those who think david davis had a good day yesterday?..and the real worry now is i see liam fox has returned to the fold but with no goodies to show? My my- and all that talk we had to listen to about new trade deals with countries worldwide.. even iain duncan smith has been wheeled out again.. taking back control and controlling our borders while we stop the foreigners from sponging off our welfare..on and on..
Tne queen in her speech is even talking about getting the possible deal from brexit and foraging for new trade deals across the world.. more bunkum
June 21, 2017
@MikeW
the infighting will still go on and this time round it will get worse. The dedicated remainers have all the power and they will not give a fig to what happens to the country as long as they get their “soft brexit” Fools every one of them if they would only open their eyes and engage their brains.
The member of Newbury summed it all up a committed remainer and to stick the knife in he had to go on about Climate Change and becoming a world leader in Renewable Energy. Another one (of many) who hasn’t done his homework and has yet to realise the high cost of energy destroys industries and ramps up those in fuel
debt and poverty.
People like this have no real take on life and see the EU market as the panacea of all their ills. Not even in the box to be able to think outside it. Blinkered or what? So false talking the talk and hoping it is what the people want to hear. Is t any wonder the electorate are falling for Corbyn and his suicidal policies. The people know who are dedicated to the UK and it certainly is not the yesterday men of yesterday the Majors, Cleggs. Hesiltine, Blair and Mandleson.
Start getting out there and talking the talk about which direction the EU is heading and how much it will really cost us and all the other things they are planning like a federal Europe and how they will up the ante on how much we will be paying extra.
Politics is just a joke and a very sick one at the moment and apart from the dedicated few nobody is actually listening to the people.
June 21, 2017
Politicians must analyse why in a country such as the UK, where “rich people” have been in existence for many thousands of years. Since Time began for humans, that Richness is the enemy
Why do people appear not to accept it? So many play the lottery in the hope of being rich. Many work overtime and faster for more money. Many buy a home and see it grow in value.So, ..the question is “Why do British people hate themselves? Are they being helped along the way by some force internal or external to forget their thousands of years of human experience? Why are they not mature, accepting Life?
June 21, 2017
If you live in a state that creates an environment in which you prosper you should certainly pay more than average in taxes. The most vulnerable in society need protection, and those to young to care for themselves a fair start in the race of life. it is hard I think to tax capital as would force those on meager earnings to sell their homes while others on the same earnings get state assistance. Better to tax income on capital as well as earnings and use tax to discourage consumption of goods that cause harm to society, such as alcohol and CO2. I don’t think you can pick a level of income such as £70k and define that as rich. Rich isn’t a binary or an absolute thing, so better to use percentiles and tax those in higher bands more while ensuring almost everyone pays some tax such that even those in the lowest 10% feel like they are paying in to a system and are not free-riders.
June 21, 2017
It’s almost impossible to say who is rich as circumstances will be so different as other have pointed out. Let’s face it, we would all like to be ‘rich’ but this means different things to different people. Nobody likes to be taxed and we might all try to pay as little as possible but some do get away with rather a lot and it always seems to be the mega rich! This is what should be brought under control. I think if most of us knew years ago how expensive London properties would become we would have all scrambled for a council flat, bought it and then sold it now. Instant millionaire!!
No way should Corbyn be allowed to grab empty homes in London to house anyone that the owners don’t agree to! However, I would say that anyone owning more than one home could be considered to be well off compared to most. Rents are high and these properties obviously pay the owners an extra wage. We are all taxed enough now and I would like to see less government waste. How much will the MP’s rise be this year?
June 21, 2017
Good article – please can you do a sequel?
“WHO IS CONSIDERED POOR?”
To what extent should the taxes on the rich be given to the poor and should there be any individual cap on the individual amount and if so on what grounds?
June 21, 2017
What I detest is the fact that we have to justify a living wage when we have worked all our lives to obtain it and are then compared to people who have done nothing and have been ‘well off’ on the state . I also object to benefits being doled out for those who live in a cramped condition, have unkempt houses , but collectively acquire a lot of money to ste themselves up out of the Country in palacial residences.
June 21, 2017
Looks like we’re heading for another genrral election the DUP are playing hardbsll and are quite prepared to allow the govetnment to fall. Despite what they avow it will suit the DUP to have a very much softer brexit so that the NI farmers are not put too much out of pocket. Its all about the CAP payments!
June 21, 2017
Its only the Conservatives that could fail to see the absolute terror that would be felt by the DUP at the thought of Prime Minister Corbyn and McDonnell inviting their mates from Sinn Fein around to No 10 for Guinness and sandwiches. Any competent leader could get a deal out of the DUP for peanuts.
June 22, 2017
PaulW: “Looks like we’re heading for another genrral election the DUP are playing hardbsll”
I tried, I really tried to give Mrs May a break, even after her facile ‘nasty party’ remarks, her abysmal tenure at the Home office. But it has to be said now, she exceeds even David Cameron is bovine stupidity and sheer incompetence.
What an achievement to turn an overall majority into a overall minority. An act of political incompetence that is just breathtaking.
Tory leaders, what can you say!?
June 21, 2017
I’m not sure being rich is all it’s cracked up to be. You are more likely to get your wife kidnapped, tortured and held for ransom so I guess that is a plus.
June 21, 2017
Not only that, you spend hours in meeting with tax advisors, lawyers & dealing with tax returns and reading tax books.
Not very much fun.
June 21, 2017
Off- topic, this should have been started last summer, or maybe autumn, and now it will have to be handled with even greater care and sympathy or the opposition will pick up on every hard case and accuse the government of callously persecuting innocent people:
https://www.theguardian.com/politics/2017/jun/20/eu-citizens-in-britain-to-be-asked-to-register-for-post-brexit-status
“EU citizens in Britain to be asked to register for post-Brexit status”
June 21, 2017
The problem with a post of this kind is it plays into the narrative “there’s plenty of money around, it’s just the rich/elite are keeping it all”. Much repeated at present. One can see how it might make sense to a first year polytechnic dropout and ‘uni’-goers. There is no transparent (to the aforesaid) way of reconciling prevailing asset prices with actual economic performance over the past decade. Labour’s manifesto seems (hearsay) to have been one long exercise in dividing the cake, rather than any ideas on how to grow it. This is why it is probably better described as Cuban, rather than Venezuelan – when Chavez went on his popular spending spree, he did have an oil revenues windfall at his disposal.
The seemingly more pertinent issue should be stimulating enhanced ‘proper’ economic growth with some adjustment to the balance in returns to capital and labour (IMO).
June 21, 2017
Income redistribution is a false God – taken out of the annals of socialism that we are ever more forced to accept.
There is nothing fair or honest about taking more from people who have achieved more in life. I don’t begrudge people having wealth but I do begrudge those that have never contributed.
Let’s get this right JR – we should be talking about taking the huge waste out of society that has been put there mainly by labour, but it forms part of big government and these all need to be done away with.
It is very expensive to provide benefits to people who have to spend a lot on basic living.
So, the answer is not to justify higher taxes on those that seemingly have more, it is to reduce the tax burden by all possible means, and we should look to the 19th century industralists in this respect.
A fair taxation system would be based on people wanting something and well prepared to buy that thing. Luxury items should have a higher rate of tax than food.
FGS JR let’s do something about the incredibly complex and wasteful, not to say expensive method we use to tax individuals. Let’s make it simple. Rather than PAYE tax a company by number of people and average salary.
Primarily lets switch to a method of taxation that doesn’t punish people for having money, rather let’s even it out so that those with the ability and desire to pay more for their luxury can do so and still feel good about it.
* JR – Do you really get to read all the posts that are written?
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June 21, 2017
Personally, I don’t have a problem with people who work hard, pay their taxes and save their money – if they have invested it wisely they can accumulate wealth and there are enough legit ways to avoid tax ie ISA wrappers, SIPPs etc.
Neither do I have a problem with entrepreneurs who take risks and build successful businesses and who accumulate wealth that way.
The people I have issues with are those who merely inherit their wealth, or live off trust funds. These people are usually privately educated, regard themselves as our “betters” and sometimes surface in the House of Commons – where they have been known to double the national debt during their term of office or ruin the industrial base of the country or soak the disabled in order to pay for tax cuts for their rich friends. Etc ed
June 22, 2017
Sakara Gold: “The people I have issues with are those who merely inherit their wealth, or live off trust funds.”
So, they are living off their parents hard work. Nowt wrong with that.
The people I have issues with are those who occupy sinecures in the Public ‘jobs for votes’ establishment. The heads of NGO and the third sector, all those organisations that couldn’t possibly exist without government ( that is ) tax funded subsidy.
I understand the chief executive of Kensington and Chelsea has made an abrupt departure. Good!
For every one that is uncovered by a disaster like Grenfell tower, there are probably another dozen burrowed into the ‘Public services’ like leaches.
June 21, 2017
Dear John–On the subject of money I originally thought a coalition with the DUP a thoroughly good idea, but now I am not so sure: do I understand correctly that when it comes down to it they want to be bought? I hope I am wrong.
June 27, 2017
I don’t begrudge the Province the money at all. And it may help to get the IRA to stop boycotting the Assembly, not that they would ever admit that.
June 21, 2017
About 12 years ago I found a £10 note next to the ticket machine in a car park at 5.00am in the morning. My job at the time was street sweeper. I felt rich and have never forgotten it.
The frightening thing about this job ( contracted out by the council ) was that when I turned up from the Agency they wanted ME to drive the huge refuse lorry
The rest of the queue of people who turned up at 5.ooam were all non English speaking foreigners and when I declined the driver job one of them had to do it. ( which was hair raising as passenger )
BTW am an ordinary person, who needed a job that week. Not a druggie, alkie, doley etc. Not a judgement on those groups ( or the foreigners )
T*sco shop was exciting today had to step over a prostrate, handcuffed ……chap in the foyer being restrained by a tiny cop and lady cop ( unarmed ) while the Tannoy made 6 ever more desperate anouncements ” will the owner of this car…” Last announcement being This is an emergency, will the owner of this car….
Me (F) and another bloke spotted each others Help for Heroes wristbands and had silently worked out what to do if needed.
June 21, 2017
I feel rich because I know that I have enough. Our mortgage is paid, our pensions are adequate and we have enough savings to enjoy small pleasures like a meal out, hardback books, or a holiday, and we can meet unexpected bills and give to charity. I have been poor and those who say money doesn’t matter have never been without it. I can sleep at night without worrying about bills or debt. That makes me rich indeed.
It is interesting to note that the aggrieved young (and I sympathise with them) have very Tory aspirations, however left their shouted slogans: home ownership, good pensions and a future for their children.
How do people get on the housing ladder when high rents, often greater than mortgage repayments, make it almost impossible to save for a deposit? Could banks and building societies be encouraged to re-introduce 100% mortgages to first time buyers who have a good record of paying rent equal to the proposed mortgage?
Trim the overseas aid budget where there is so much waste and use the savings to offer scholarships and maintenance grants to STEM students who commit to 5 years’ work in the UK after graduation. Offer 50% reduction for proper academic degree courses and abandon vocational degree courses. (My niece has just spent 3 years studying for a degree in Events Management.) Learning on the job and getting paid is a much better route in many such areas.
Social care is another area that rouses passions. Instead of forcing people to sell their homes to pay or care, could there not be an arrangement whereby the property is rented out and the rents received used to pay care home fees? Even if it takes several years after the death of the owner to clear the debt, the family would still retain the asset and benefit from any increase in property prices.
June 22, 2017
Some brilliant ideas from Anna here.
June 21, 2017
Mrs May complimented Mr Corbyn today in Parliament for going to a vigil yesterday evening at Finsbury Park. No mention of Stamford Hill whilst he was doing whatever one does on a vigil.Two days of mobs using machetes. If memory serves me right, mods and rockers once per year in the 60s used to have a fist fight on the beach, certainly in in Deal, scooters and motorbikes were vandalised. No deaths or severe injuries resulted. Bike chains and knuckle dusters were used sparingly and none fatally. But no major attack on police and citizens…AT ALL.
Mrs May indicated there were four terrorist attacks in the UK in the last three months. NO there hve been at least FOUR terrorist attacks in the last THREE DAYS.Stamford Hill was not classed as one too.. Those with their faces cleaved by a machete can take comfort it weas not a terrorist action.
Mrs May does not have control of this country. Does does not know basic policing facts. Of course there may be more terrorist attacks. I am relying on mainstream media and social media and they cite and picture at least four. In the four days more terrorist attacks in Belgium adn France and the manslaughter by migrants of a Polish truck driver in Calais.
Parliamentarians are just acting about as I type and enjoying themselves speaking balderdash utterly unrelated to reality.
Skate and Salmon hoho hoho very funny. Give her a fiddle and light a fire while she plays.
June 21, 2017
Earn 25,000 and the state leaves you with 20,280
Earn 50,000 and the state leaves you with 36,700
Earn 75,000 and the state leaves you with 51300
Earn 100,000 and the state leaves you with 66,0000
Earn 200,000 and the state leaves you with 116,000
Then 20% VAT on near everything you buy
Further taxes on buying and selling a property
Further taxes on taking out insurances
Further taxes on alcohol tobacco road fuels owning a vehicle and having a TV set etc
I think the state takes enough off us already.
Its time for the state to stop thinking every solution to every issue is just more state spending.
June 21, 2017
Those figures you quote above are for individuals, but households earning those amounts between two people get to keep more.
Tax per household not per individual, but double the threshold so the state takes less.
June 21, 2017
Edward2, I am inclined to agree with the general sentiment of your post above.
But there is one arm of the welfare state which invites the freeloading of the well heeled, and it is Council/ Housing Association accommodation. Once ensconced in a cosy council house, too many tenants spend the rest of their lives enjoying what is in effect a significant subsidy from the public purse, purely because at some point in the past, their circumstances merited that.
Ideas:
1. Allow/ require local authorities to apply means tests to rents, according to household annual income. So that rents can be escalated for well-off tenants. ( HMRC hold details of annual income and tax/NI paid for us all, eg in P60 format- just let councils have controlled access to that data.)
2. Continue to apply the penalty for under-occupancy (the “bedroom tax”), but allow councils to build more single/dual bedroom apartments.
3. Ban the “inheritance” of tenancies.
4. Ban all sub-letting of social housing.
June 21, 2017
Another stuck needle piece by Mr Redwood. What was that story about someone fiddling while Rome burned?
June 21, 2017
Re the hard-up widow in your example – if she owns a £1.2 million flat then she has options to improve her cash-flow situation.
If she wishes to remain in her prime location London flat then she could consider equity release. However, if she is willing to move out of London then she can buy a cheaper property and invest the balance to augment her income – £600k will buy a nice house with garden and the other £600k can be invested to produce an additional £21k per annum income (assuming dividend yield of around 3.5%).
The hard up widow lives on State pension plus a top up (pension credit?) – this raises the question of whether someone owning £1.2 million of assets should be getting money from the taxpayer when she could increase her income by better utilisation of her assets? The second widow presumably would not be entitled to a pension top up because she uses her assets to provide income?
June 21, 2017
Someone earning £90,000+ per annum in pre-tax income.
June 21, 2017
I listened to our host’s thoughtful speech in the House this evening and found nothing to disagree with.
The emphasis on fishing and agriculture was a shot across the bows for the EU and possibly our government should they think for one moment that control over our territorial waters is something that is negotiable.
Before the referendum I said here that the government should commission the production of a new, modern fishing fleet designed and built in Britain for the specific needs of our various fishing grounds.
These new boats should the be leased on favourable terms to experienced British Skippers on condition that they employ British fishermen and a proportion of British youngsters as apprentices who will provide us with our next generation of fishermen and skippers.
Planning for this should start now so that the EU knows we are serious about taking back control of our fishing grounds and the boats will be ready to go to sea as soon as control is re-established. The cost will be peanuts compared with overall Government expenditure and a fraction of our annual net contribution to the EU budget for just one year.
The jobs created in boatbuilding and fishing will be very welcome in some of the most deprived parts of the Country. The policy will also make it difficult for Sturgeon as she would naturally want to oppose a policy incompatible with membership of the Single Market yet would do so much for the economy of Scottish coastal communities.
June 21, 2017
Mode of transport is a good touchstone of wealth. These days you are truly rich if you can afford to fly by private jet or have a private chauffered car or your own yacht. The middle class is those who can afford taxis regularly (i.e. Even for commuting) if they wanted. Those who can only regularly travel by public transport or by driving their own car are working class.
June 21, 2017
Rich people are people who can choose their GP, can choose which school their child goes to, can choose where to live, can choose what to eat…, can afford tax advice to squirrel away money from the tax man using wheezes like trust funds not available to the majority, are secure in the knowledge that they have enough money in the bank to bring their children up even if they lost all other earnings. Rich people can afford not to work if they don’t want to.
June 21, 2017
You imply towards the end that portfolio investment (in publicly traded bonds and stocks) is advantageous to direct investment (in property and controlling interests in businesses), because one could land in the dock in the latter. This may be true but what about the agency problem which affects all portfolio investments ? As Adam Smith said:
“The trade of a joint stock company is always managed by a court of directors. This court, indeed, is frequently subject, in many respects, to the control of a general court of proprietors. But the greater part of those proprietors seldom pretend to understand anything of the business of a company…. The directors of such companies, however, being the managers rather of other peoples money rather than their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own…. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company’
June 22, 2017
I’m not going to play this silly game of making subjective judgements and trying to make taxation complicated. There should be three rates of income tax, zero, standard and highish. VAT should be at a reasonable rate and levied when real wealth is generated. CGT should be levied if there has been a genuine gain in terms of constant prices, and losses should be set against gains. There should be no taxes on transaction turnover where there is no net generation of wealth – this consideration applies to the sale of old houses, to gambling tax and to stock exchange transactions.
In the late seventies, Labour were imposing 83% on the top portion of earned income and 98% on unearned income. Both tax avoidance and tax evasion were rife. Now we have gone to the other extreme and do not tax moderate savings income at all. Why not tax both earned income and unearned income, keeping the rates low?
We need to treat the retired elderly the same as everybody else. All pensioner perks should be expressed as cash and subject to income tax – simple, fair and uncomplicated. It would mean getting rid of concession fares by replacing them by a pensioner’s annual travel allowance. Once this system is in force, the pensioner perks can be consolidated into the State Pension.
We need to get this right because ‘putting an end to austerity’ cannot mean letting the fiscal deficit increase. The electorate seem to be rejecting further public expenditure cuts, so raising more taxation is necessary – and not just from the rich.
June 22, 2017
LL only scored 13 this time.
June 22, 2017
Rich is a relative word. Corbyn’s idea of ‘rich’ is anyone earning over HIS salary as an MP. How hypocritical is that?
Now, he earns far more than my whole household so he is rich. And so is his talk.
June 22, 2017
However you define rich the problem is we haven’t got enough of them
A real Conservative Government would be setting the conditions to encourage far more people to become rich.
Sadly they do the opposite we now have a left wing led agenda that demonises and despises success and wealthy people. You know the very people who pay the largest slice of the tax revenues that supports the people that attack them.
Imagine how much better things would be if the top 7 percent became the top 14% who became the top 25% etc
However too many people still believe that the economy is a zero sum game . Sad really, cutting off your nose to spite your face
June 28, 2017
I think there should have been another blog post called ‘The Poor and their Responsibilities’
Today I read an article in the Guardian about immigration lawyers arguing that refugees being paid by the Home Office to clean up their own mess, and keep their toilets and showers clean themselves are calling these tasks ‘slave labour’, they are also performing ‘kitchen tasks’. ENOUGH IS ENOUGH.
If they want NMW to look after themselves in their homes do we all get it, students and our elderly. For goodness sakes – they should be grateful we provide what we do for them for FREE – what is the cost to the taxpaying public to keep each person in these detention centres. They should be blimin grateful for our good grace in this. How dare they demand payment for doing tasks that we all do to look after ourselves – I’m absolutely with the Lawyers involved in this action – who is paying them – who are they?
June 28, 2017
I’m absolutely LIVID with the Lawyers