The U.K. closed a tax loophole for the global rich, now they're fleeing(wsj.com)
wsj.com
The U.K. closed a tax loophole for the global rich, now they're fleeing
https://www.wsj.com/world/uk/the-u-k-closed-a-tax-loophole-for-the-global-rich-now-theyre-fleeing-f078cce4
211 comments
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The British government closed this loophole because it's politically easier than the strategy which is actually needed: properly taxing assets.
This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location.
Of course, this would mean taxing powerful aristocrats, including the royal family. With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location.
Of course, this would mean taxing powerful aristocrats, including the royal family. With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
As you pay more tax, you get less services, and I dont just mean, where you elect to avoid them. You get less (or none at this point) free childcare. No umemployment benefits if you get fired. No child benefit. You can't save as much in your pension.
Then there are the semi-elective things like healthcare, education, home security. These kinda dont work for the whole society. The rich are thus paying for their own out of pocket. But they are also paying for the semi-working system for everyone else.
I think introducing a wealth tax just to balance the books without rethinking who and how accesses public funds, will just end with the rich leaving. Some may say good riddance, but the UK budget is now beyond creaking and heading for collapse.
Oh and when I say "the rich", that probably covers many people here. IIRC earning 90k per year puts you in the top 1%. A 10-15 year experience NHS doctor is in that bracket.
Then there are the semi-elective things like healthcare, education, home security. These kinda dont work for the whole society. The rich are thus paying for their own out of pocket. But they are also paying for the semi-working system for everyone else.
I think introducing a wealth tax just to balance the books without rethinking who and how accesses public funds, will just end with the rich leaving. Some may say good riddance, but the UK budget is now beyond creaking and heading for collapse.
Oh and when I say "the rich", that probably covers many people here. IIRC earning 90k per year puts you in the top 1%. A 10-15 year experience NHS doctor is in that bracket.
People earning 90k aren’t “the rich” that are doing the most egregious tax avoidance. They’re still working class. They still have to work or face destitution.
The very top sliver who own the majority of the land and assets and who never need to work a day in their life are who must be looked at; that hereditary wealth needs to begin to find itself flowing into public services more and more.
The very top sliver who own the majority of the land and assets and who never need to work a day in their life are who must be looked at; that hereditary wealth needs to begin to find itself flowing into public services more and more.
They are, I fear, the ones that pay this tax. The actual millionaires will surely figure out how to avoid it, just as they did with all the other ones.
Of course this will be an unpopular comment, but when it comes to things like this .. have you ever simply looked up the total net worth of all billionaires in the UK, and divided it by the total number of people living in the UK? Like .. you need to do one single division between two numbers to prove that your idea of just "seizing and redistributing the rich people's wealth" will accomplish nothing you think it will. A single division is all it takes.
At no point did I say “just”. You’re making a strawman.
Really? Because 50% of the UK wealth is in the hands of billionaires. So everyone in the country would suddenly be twice as wealthy (excluding the billionaires of course).
Perhaps you should check the facts before making statements like that!
Perhaps you should check the facts before making statements like that!
In the times of AI it's really easy to verify the question above. I had literally just copied it to the chat and made a research (also asked to cite and manually verified the links).
So it says there are 57 billionaires in UK with total worth of £182 billion. Non-billionaire wealth is £10.13 trillion, btw, so it's definitively not 50%. UK population is 68.3 million people. So everyone gets their £11,311 and that's it.
UPDATE there are £772.8 billions if you include non-UK citizens, but happen to live here. If you seize their money as well that will give you the total of £11K
So it says there are 57 billionaires in UK with total worth of £182 billion. Non-billionaire wealth is £10.13 trillion, btw, so it's definitively not 50%. UK population is 68.3 million people. So everyone gets their £11,311 and that's it.
UPDATE there are £772.8 billions if you include non-UK citizens, but happen to live here. If you seize their money as well that will give you the total of £11K
It’s a straw man cause you don’t have a windfall redistribution as only option
> IIRC earning 90k per year puts you in the top 1%.
According to the public data for 2023-2024, top 1% is around £180-200k, so you're off by quite a bit. £90k is around 5-6%. This is gross, not net.
In the U.S., the top 1% is around $570-600k according to 2024 census numbers.
According to the public data for 2023-2024, top 1% is around £180-200k, so you're off by quite a bit. £90k is around 5-6%. This is gross, not net.
In the U.S., the top 1% is around $570-600k according to 2024 census numbers.
Fine. I'll take top 5%.
In the mind of probably at least 75% electorate, the top 5% are filthy rich who should make up any tax shortfall. But also 90k puts you, I believe, out of reach of all the services I listed above.
I'm all for paying tax, and even more tax if need be, where I get equal access to services. But not when I'm literally excluded for paying more tax.
Interestingly, according to an FT article, high earners in the UK pay comparable amounts of tax as they would on the "high tax" continent. It is the low earners who oay substantially less, bringing down the effective average. But they in turn pay outsized housing rent, so arent better off either.
In the mind of probably at least 75% electorate, the top 5% are filthy rich who should make up any tax shortfall. But also 90k puts you, I believe, out of reach of all the services I listed above.
I'm all for paying tax, and even more tax if need be, where I get equal access to services. But not when I'm literally excluded for paying more tax.
Interestingly, according to an FT article, high earners in the UK pay comparable amounts of tax as they would on the "high tax" continent. It is the low earners who oay substantially less, bringing down the effective average. But they in turn pay outsized housing rent, so arent better off either.
Renting doesn’t go to government but to landlords and aristocracy
To maybe explain the confusion, there’s a difference between national and global. I bet it is true that if you earn 90k/year in the UK then you are in the global 1%, but that is different from what most people in the UK mean when they talk about “the 1%”.
The rich benefit most from a stable society and the rule of law though.
No point owning most of Mayfair if you don't feel safe enough to enjoy your lifestyle.
And it's not just funding the police and courts that leads to this - it's making sure there aren't too many desperate people with no hope. ie paying unemployment benefit so people can live while looking for work - is all part of that stable society from which everyone benefits - but particularly the rich as they have more to lose.
No point owning most of Mayfair if you don't feel safe enough to enjoy your lifestyle.
And it's not just funding the police and courts that leads to this - it's making sure there aren't too many desperate people with no hope. ie paying unemployment benefit so people can live while looking for work - is all part of that stable society from which everyone benefits - but particularly the rich as they have more to lose.
It's why some much money ( doubious sources or clean ) ends up in places like London.
Often it's looted ( or comes from exploitation ) from unstable countries where the weak rule of law has allowed the looting ( corruption or whatever ), and then moved to London to ensure nobody can then steal it back directly or via political revolution.
Taxes are the price of civilisation - if you want the good life - you have to help support civilisation - not free load.
Often it's looted ( or comes from exploitation ) from unstable countries where the weak rule of law has allowed the looting ( corruption or whatever ), and then moved to London to ensure nobody can then steal it back directly or via political revolution.
Taxes are the price of civilisation - if you want the good life - you have to help support civilisation - not free load.
The rich generally derive their wealth from the labours of a healthy and educated population. In most Western countries, these are proceeded at least in part paid by taxes and amount to a massive subsidy to those who need labour. Arguably this includes the "free childcare" mentioned above.
“As you pay more tax, you get less services”
This is a lie. In US, most food our rules, legal system, government agencies (that are not direct transfers like doc security & Medicare) exist to protect properties and interest of the rich.
That higher income people are not seeing much of direct transfers does not mean they are not getting more benefits from the government. Even our bloated military and foreign policy is primarily still protecting US business interests globally. It’s not minimum wage peon that benefits from that. It’s owners of large capital
This is a lie. In US, most food our rules, legal system, government agencies (that are not direct transfers like doc security & Medicare) exist to protect properties and interest of the rich.
That higher income people are not seeing much of direct transfers does not mean they are not getting more benefits from the government. Even our bloated military and foreign policy is primarily still protecting US business interests globally. It’s not minimum wage peon that benefits from that. It’s owners of large capital
> This is a lie. [Followed by nonsense about other countries, rather than the UK]
I earn over £90k in the UK. It is very much true, a lot of things are "means tested".
I earn over £90k in the UK. It is very much true, a lot of things are "means tested".
Yes. Progressive taxation. That's the point. Tax those who can afford it, fund equal opportunity and a basic standard of living for those who can't. Pull society up from the bottom.
As much as one can complain about specific inefficiencies or not being able to send young Jasper and Tabitha to private school because of VAT and tapered tax relief, I do think we don't take it far enough.
The reason it not working is that we have stapled our personal wealth and economy to housing. 60 years of financiers pushing for higher lending limits with looser regulation resulted in more people able to "afford" a £1m house. That drags up all the prices.
There's no simple way to reverse it this distortion but it had a knock on effect: the generationally rich, the landed gentry through to farmers have become insanely rich, through no work but HODLling all the land until they got planning permission.
I agree, wealth tax is scary but not addressing how wealth works won't fix things either.
As much as one can complain about specific inefficiencies or not being able to send young Jasper and Tabitha to private school because of VAT and tapered tax relief, I do think we don't take it far enough.
The reason it not working is that we have stapled our personal wealth and economy to housing. 60 years of financiers pushing for higher lending limits with looser regulation resulted in more people able to "afford" a £1m house. That drags up all the prices.
There's no simple way to reverse it this distortion but it had a knock on effect: the generationally rich, the landed gentry through to farmers have become insanely rich, through no work but HODLling all the land until they got planning permission.
I agree, wealth tax is scary but not addressing how wealth works won't fix things either.
For now only earnings are taxed.
Earn £300k a year, you pay 65% on more than half of it, and obviously 45, 40, and so on of the first half of it)
Get £3 million from the stocks? You pay 20% (above £50k threshold)
People are obsessed with workers paying all their taxes and letting off the wealthy avoiding the most.
Earn £300k a year, you pay 65% on more than half of it, and obviously 45, 40, and so on of the first half of it)
Get £3 million from the stocks? You pay 20% (above £50k threshold)
People are obsessed with workers paying all their taxes and letting off the wealthy avoiding the most.
The royal family is exempt from a lot of tax laws.
There was a bit of a scandal a few years back at just how much input the Queen got to those sort of laws, but it didn't really have legs as everyone thought she was brilliant.
But if the same thing comes out about King Charles you can bet it's going to be a bigger stink.
There was a bit of a scandal a few years back at just how much input the Queen got to those sort of laws, but it didn't really have legs as everyone thought she was brilliant.
But if the same thing comes out about King Charles you can bet it's going to be a bigger stink.
Genuine question as I’ve been interested in the conversation around taxing wealth: how do we do it?
I assume a new government dept. has to be set up to oversee it. Or do the wealthy self assess? Are things like shares and investments valued once? Once per year? How is a company valued? How do you know if you qualify as wealthy? Do we value everyone’s wealth? Can’t the wealthy just relocate or move assets out of reach?
I don’t expect answers to this, I’m just thinking out loud as there seem to be a lot of challenges.
A few countries seem to have tried and continued to tax wealth but it seems far from proven and only seems to “work” in Switzerland, which is a bit of an outlier
I assume a new government dept. has to be set up to oversee it. Or do the wealthy self assess? Are things like shares and investments valued once? Once per year? How is a company valued? How do you know if you qualify as wealthy? Do we value everyone’s wealth? Can’t the wealthy just relocate or move assets out of reach?
I don’t expect answers to this, I’m just thinking out loud as there seem to be a lot of challenges.
A few countries seem to have tried and continued to tax wealth but it seems far from proven and only seems to “work” in Switzerland, which is a bit of an outlier
Switzerland does it and my understand is they basically just ask you to fill in a tax return every year and say how much wealth you have (all the assets you own).
Presumably they do have a department of people checking this to make sure people aren't lying, but also Switzerland is a relatively high trust society, and taxes are reasonable, so people probably don't mind paying too much.
In the UK in 2025 I'm not sure this would work, people would try and evade it and the UK government isn't competent enough to stop them
Presumably they do have a department of people checking this to make sure people aren't lying, but also Switzerland is a relatively high trust society, and taxes are reasonable, so people probably don't mind paying too much.
In the UK in 2025 I'm not sure this would work, people would try and evade it and the UK government isn't competent enough to stop them
I think by "asset" OP actually means "real property", otherwise the subsequent statement of "if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location" doesn't really make sense. You could easily move corporations around, for instance, so the statement is only really true when applied to real estate.
This isn't limited to property.
Britain could just as easily tax profits on the sale of shares in British companies, regardless of the country of domicile of the company or individual that sold the shares.
We don't need wealth taxes, we just need parity between tax on earned and unearned income.
Britain could just as easily tax profits on the sale of shares in British companies, regardless of the country of domicile of the company or individual that sold the shares.
We don't need wealth taxes, we just need parity between tax on earned and unearned income.
My answer to this (good) question is: do whatever banks do to value illiquid assets when they lend against them (this is how the wealthy largely have cash at all), then levy taxes accordingly. Hell if you want, add the taxes to the interest rate.
I think The Netherlands has it running quite OK.
You don’t need new govt. dept. tax authority is enough. You do your yearly tax statement.
In NL they have access to your bank accounts or more like banks and brokers are obliged to provide state of accounts as per 1st of January.
Downside is you pay wealth tax on „possible gains” not actual gains on wealth above 40k€. If you have mortgage it of course is deducted from value of your house or any debts that you have documented.
In case you think collecting watches can make you hide the wealth, there are of course tax authority checks most likely if your wealth suddenly changes.
You don’t need new govt. dept. tax authority is enough. You do your yearly tax statement.
In NL they have access to your bank accounts or more like banks and brokers are obliged to provide state of accounts as per 1st of January.
Downside is you pay wealth tax on „possible gains” not actual gains on wealth above 40k€. If you have mortgage it of course is deducted from value of your house or any debts that you have documented.
In case you think collecting watches can make you hide the wealth, there are of course tax authority checks most likely if your wealth suddenly changes.
The Netherlands is an accountant's wet dream. Everyone with assets here has a personal double-layered corporate structure where the assets are held by the one company, but they're nominally employed by the second one. Even cars for every-day use can be business-owned and then leased back to yourself. And the corporate tax rate is nowhere near the personal wealth tax, people here don't even bother with registering their assets in foreign holdings.
Just tax land and you'll get 80/20
I don’t think the wealth taxes, fundamentally workable because you have issues you raised above, but other things like liquidity and indivisibility of assets.
I think the simpler solution if simply passing along the original cost basis to heirs (and without documentation it’s assumed to be zero). That way people or even families can defer taxes on income, but eventually they get paid.
I think the simpler solution if simply passing along the original cost basis to heirs (and without documentation it’s assumed to be zero). That way people or even families can defer taxes on income, but eventually they get paid.
That Socialist hotspot, Texas, taxes property at 1.8%, vs. 0% in the UK. Can't inconvenience the feudal aristocracy (i.e. parasites descended from thugs), starting with Chuck von Battenberg, Sachsen, Coburg und Gotha.
Yeah but they have No Income tax right?
No, Texas residents pay income tax to the federal government. On a state level, yes, there is no income tax.
However, the tax burden in Texas is not significantly lower than a state like California.
However, the tax burden in Texas is not significantly lower than a state like California.
Wait are you suggesting that we tax assets instead of income?
There's been a big shift of rich people avoiding taking pay or dividends. Instead they get paid in stock, and then get interest free loans secured on that stock to actually spend money.
It's a loophole the mega-rich are using to avoid tax.
The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.
And one of the big things they've got? No capital gains on those stocks when passed to children.
So yeah, we need to tax assets as well as income. Because anything that's not taxed the rich just funnel money into it to avoid paying tax.
It's a loophole the mega-rich are using to avoid tax.
The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.
And one of the big things they've got? No capital gains on those stocks when passed to children.
So yeah, we need to tax assets as well as income. Because anything that's not taxed the rich just funnel money into it to avoid paying tax.
Not just rich people. Here in estonia small startups like mine pay minimum tax, and reinvest the rest in company.
> There's been a big shift of rich people avoiding taking pay or dividends. Instead they get paid in stock, and then get interest free loans secured on that stock to actually spend money.
They have a stockholding in a firm, and the firm pays CIT on income earned. That sounds fair.
> The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.
Why should my kids be liable to pay a tax when they inherit my house? That house was bought by my income on which PIT was duty fully paid. Again sounds very fair to me.
> And one of the big things they've got? No capital gains on those stocks when passed to children.
Again sounds fair to me.
> There's been a big shift of rich people avoiding taking pay or dividends. Instead they get paid in stock, and then get interest free loans secured on that stock to actually spend money.
They have a stockholding in a firm, and the firm pays CIT on income earned. That sounds fair.
> The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.
Why should my kids be liable to pay a tax when they inherit my house? That house was bought by my income on which PIT was duty fully paid. Again sounds very fair to me.
> And one of the big things they've got? No capital gains on those stocks when passed to children.
Again sounds fair to me.
The heart of this is what you think tax is.
If you just think it's the government stealing your stuff, then it seems very unfair to have your stuff taxed after you die.
But what tax is, under another lens, is a way to divert the capacity of a state to social ends. Everything from the military to the police to prisons and the justice system is what enables you to live in peace and accumulate stuff in the first place. Those are social goods.
So how do you fund this spending? How do you incentivize other people to protect your house? Well, the solution of tax is they take a little bit of your stuff over time, in a predictable way, according to rules that are pre-agreed and can be changed with consensus.
If you just think it's the government stealing your stuff, then it seems very unfair to have your stuff taxed after you die.
But what tax is, under another lens, is a way to divert the capacity of a state to social ends. Everything from the military to the police to prisons and the justice system is what enables you to live in peace and accumulate stuff in the first place. Those are social goods.
So how do you fund this spending? How do you incentivize other people to protect your house? Well, the solution of tax is they take a little bit of your stuff over time, in a predictable way, according to rules that are pre-agreed and can be changed with consensus.
The really tricky part is that both aspects of taxes are true.
The really really tricky part is when taxes are used to penalize you - for instance used to fund agencies that even actively harass you (ICE recently).
Or go to fund programs that only your political opponents benefit from.
Also, anyone living in the bay area can attest how terrible the roads are for how much tax money clearly gets spent on them.
Or go to fund programs that only your political opponents benefit from.
Also, anyone living in the bay area can attest how terrible the roads are for how much tax money clearly gets spent on them.
I think taxing assets is a horrible idea, but the simple solution to all of this is simply not having any step up in basis when assets are transferred to heirs - that way the tax eventually gets paid even if it’s deferred.
The underlying problem is the UK is reverting back to a system where you have property and can then therefore build wealth, or you don't have property, and somewhere to live costs over 50% of your net income.
This isn't to say taxing wealth is actually the solution, but it's the catch all that people like to scream about.
30% of pensioners are millionaires in the UK, and they recieve a state pension. Fixing that would probably immediately turn a massive budget surplus ( albeit a nasty suprise for financial planning ).
However, suddenly if you find pensioners releasing funds from their property, you affect what's going to be inherited and that's a no go area. There's no real concept of fairness in the debate, just the politics of it all.
This isn't to say taxing wealth is actually the solution, but it's the catch all that people like to scream about.
30% of pensioners are millionaires in the UK, and they recieve a state pension. Fixing that would probably immediately turn a massive budget surplus ( albeit a nasty suprise for financial planning ).
However, suddenly if you find pensioners releasing funds from their property, you affect what's going to be inherited and that's a no go area. There's no real concept of fairness in the debate, just the politics of it all.
An issue with this is that even if pensioners are millionaires and getting state pension, they’re definitely the right people to trickle it down to where it’s most needed.
I think “30% of pensioners are millionaires” is also a bit moot given the majority of those are living in properties that they didn’t buy for millions and have lived in while house prices have gone up. My parents for example are probably close to your millionaire threshold and it seems unfair that they’d have to sell their home they’ve lived in for decades and want to continue living in just because the housing market has pushed its value past the point where it seems like it should be taxed. They’d have to sell it just to pay that tax and move somewhere smaller, which seems unfair to force on people approaching 80yo.
I think “30% of pensioners are millionaires” is also a bit moot given the majority of those are living in properties that they didn’t buy for millions and have lived in while house prices have gone up. My parents for example are probably close to your millionaire threshold and it seems unfair that they’d have to sell their home they’ve lived in for decades and want to continue living in just because the housing market has pushed its value past the point where it seems like it should be taxed. They’d have to sell it just to pay that tax and move somewhere smaller, which seems unfair to force on people approaching 80yo.
It's a complicated subject.
Like you're talking about fairness, but you're also arguing that other people should pay taxes to give your parents money, in order for them to keep their property, whilst many of those paying their taxes, will never get on the ladder, and if they do, will never afford such a lovely house.
Where's the fairness in that?
Further, most folks are aware of equity release and your parents could borrow against the house and not move. The main outcome is you wouldn't get it. Now I've bought such a house but I didn't get it from my parents, I got it by earning the money which I've paid income tax on, so it's literally required 2-3x in earnings to get there.
What's fair in that?
For the record, I have a kid in private school and will try my best to pass on as much as possible, so I totally get both your parents and your own position. I'm just poking fun on "fairness" because fairness in politics never seems to consider the person the money comes from and when you consider all angles, it's rarely fair.
Like you're talking about fairness, but you're also arguing that other people should pay taxes to give your parents money, in order for them to keep their property, whilst many of those paying their taxes, will never get on the ladder, and if they do, will never afford such a lovely house.
Where's the fairness in that?
Further, most folks are aware of equity release and your parents could borrow against the house and not move. The main outcome is you wouldn't get it. Now I've bought such a house but I didn't get it from my parents, I got it by earning the money which I've paid income tax on, so it's literally required 2-3x in earnings to get there.
What's fair in that?
For the record, I have a kid in private school and will try my best to pass on as much as possible, so I totally get both your parents and your own position. I'm just poking fun on "fairness" because fairness in politics never seems to consider the person the money comes from and when you consider all angles, it's rarely fair.
You realize both the US and Uk’s national pension schemes are very progressive (low earners revive a larger share of their contributions than high earners and I don’t think anyone really gets back what they put in adjusting for longevity
It's not a revolutionary idea. That I know of, the Netherlands does it, somewhat. How it works is: rather than taxing capital gains, with its myriad loopholes and counterloopholes, you tax assets directly: assume a neutral sort of "risk-free" rate of return, and then tax a percentage of that. E.g. assume yearly return of 1% on cash and savings, 6% on other assets, etc, then levy tax of 30% on that (past a tax-free allowance of 25k€ per person).
Simple, and more effective!
Simple, and more effective!
Americans become idiots when it comes to tax, unable to understand even the simplest concepts or fathom that things might have been possibly implemented elsewhere.
Hell even Switzerland taxes global assets. You just declare your stocks, property, etc at some instantaneous value and that’s that. Capital gains aren’t taxed.
The system is easy to cheat and until recently it was possible for HNW people to get a bespoke deal when moving there. But the tax rate is low enough and the risk is high enough that it’s more beneficial to just pay.
Hell even Switzerland taxes global assets. You just declare your stocks, property, etc at some instantaneous value and that’s that. Capital gains aren’t taxed.
The system is easy to cheat and until recently it was possible for HNW people to get a bespoke deal when moving there. But the tax rate is low enough and the risk is high enough that it’s more beneficial to just pay.
I would consider it very destabilizing idea and an affront to fairness really.
As an example, Wouldn't that mean that if my startup raises a round of 1m for 10%, my NW would go to 0 to 9m. 6% of that would be around 0.5m, and 30% tax would mean I would have to pay 162,000 EUR in taxes.
As a cash poor founder how do you suggest I pay that.
That's why taxing income and not wealth has been the norm.
As an example, Wouldn't that mean that if my startup raises a round of 1m for 10%, my NW would go to 0 to 9m. 6% of that would be around 0.5m, and 30% tax would mean I would have to pay 162,000 EUR in taxes.
As a cash poor founder how do you suggest I pay that.
That's why taxing income and not wealth has been the norm.
I think you missed the part that this was in Europe, no need to worry about startups
Have you considered taking a measly 20 seconds out of your day—surely a fraction of the time you took to type this comment—to google this information?
Another point: have you considered that the authorities and people of the Netherlands, a very rich country with several valuable companies, may have possibly thought of this absolutely trivial argument when designing their tax code? Do you really think nobody thought of it?
Jesus
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To your point: stakes in your _own_ company are not taxed as assets, but as income, precisely to avoid the ridiculous situation you point out.
Simply put: your retirement savings, your brokerage account = assets, your startup, your company, your farm = income.
Another point: have you considered that the authorities and people of the Netherlands, a very rich country with several valuable companies, may have possibly thought of this absolutely trivial argument when designing their tax code? Do you really think nobody thought of it?
Jesus
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To your point: stakes in your _own_ company are not taxed as assets, but as income, precisely to avoid the ridiculous situation you point out.
Simply put: your retirement savings, your brokerage account = assets, your startup, your company, your farm = income.
> To your point: stakes in your _own_ company are not taxed as assets, but as income, precisely to avoid the ridiculous situation you point out.
Enlightening, so you mean this policy isn't for the so called "1%"? Only for middle class folks and their stock portfolios? That's not what the GP was proposing.
> Another point: have you considered that the authorities and people of the Netherlands, a very rich country with several valuable companies, may have possibly thought of this absolutely trivial argument when designing their tax code? Do you really think nobody thought of it?
Yes, because I can point to an even richer country, with even more valuable companies where the left proposed same destructive policy only a few months ago and almost came close to winning.
Lastly, you did make me look it up and it seems Netherlands and other European countries really didn't think it through.
https://www.leideninternationalcentre.nl/get-advice/blogs/su...
https://www.linkedin.com/posts/jasoncalacanis_norways-wealth...
Enlightening, so you mean this policy isn't for the so called "1%"? Only for middle class folks and their stock portfolios? That's not what the GP was proposing.
> Another point: have you considered that the authorities and people of the Netherlands, a very rich country with several valuable companies, may have possibly thought of this absolutely trivial argument when designing their tax code? Do you really think nobody thought of it?
Yes, because I can point to an even richer country, with even more valuable companies where the left proposed same destructive policy only a few months ago and almost came close to winning.
Lastly, you did make me look it up and it seems Netherlands and other European countries really didn't think it through.
https://www.leideninternationalcentre.nl/get-advice/blogs/su...
https://www.linkedin.com/posts/jasoncalacanis_norways-wealth...
> so you mean this policy isn't for the so called "1%"? Only for middle class folks and their stock portfolios?
What do you mean? This is a proportional tax (slightly progressive actually due to the 0% rate on the first bracket). It's for everyone with such assets.
> where the left proposed same destructive policy only a few months ago and almost came close to winning.
If you think either of the major parties in the USA can be in any way described as "left" then this is not a serious conversation.
What do you mean? This is a proportional tax (slightly progressive actually due to the 0% rate on the first bracket). It's for everyone with such assets.
> where the left proposed same destructive policy only a few months ago and almost came close to winning.
If you think either of the major parties in the USA can be in any way described as "left" then this is not a serious conversation.
> the wealth tax was based on assumed returns rather than actual returns
That does sound poorly thought thru. Why not just calculate it instead of "assumed returns"? Seems unfair on its face and bound to go wrong.
That does sound poorly thought thru. Why not just calculate it instead of "assumed returns"? Seems unfair on its face and bound to go wrong.
Not to mention no one would pay you $9m for your stake and for you to walk away…
Yep - Cayman Islands, Isle of Man, Channel Islands, British Virgin Islands etc etc.
It's these that need to be tackled - not just because of tax evasion, but because they are also a large part of the workings of organised crime.
It's these that need to be tackled - not just because of tax evasion, but because they are also a large part of the workings of organised crime.
The real solution to the UK’s stagnation is accepting the truly politically difficult truth - the UK is getting poorer, year after year. The empire is long dead and gone, and their number 1 growth company and success story of the last decade is OnlyFans, a global smut purveyor.
The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
Privatisation and attacking social security does not work, it just makes the wealthy even wealthier.
Not the solution is fair taxation every trade made in the country, if you make business in a country you need pay taxes there for the transactiona made there.
Otherwise you just extract value out of the country, without giving back.
To me there is no worse thievery than tax evasion, it's literally robing a nation.
Not the solution is fair taxation every trade made in the country, if you make business in a country you need pay taxes there for the transactiona made there.
Otherwise you just extract value out of the country, without giving back.
To me there is no worse thievery than tax evasion, it's literally robing a nation.
The US continues to be a magnet for entrepreneurs around the world. We just increased the max amount for 0% tax rate for successful startup investments to $15 million in profit (lookup up QSBS expansion). Our pie is so incredibly large, and growing, that we can tax a small percent of income to provide a very large safety net.
This takes a long time to get - you have to sacrifice now to get the future growth
This takes a long time to get - you have to sacrifice now to get the future growth
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Why do so many people think that cutting social safety nets is a cheat code?
With the exception of certain pension benefits there isn't much money flowing into these programs to begin with.
With the exception of certain pension benefits there isn't much money flowing into these programs to begin with.
Its so stupid.
There are loads of people not participating in the economy because they do t have money, just give them money to spend.
The multiplier effect means it pays for itself.
Doesn't apply to the super rich where the money is just hoarded.
There are loads of people not participating in the economy because they do t have money, just give them money to spend.
The multiplier effect means it pays for itself.
Doesn't apply to the super rich where the money is just hoarded.
This is an ignorant and totally misinformed take on how the economy functions. Giving people money will not create a sustainable economy
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> Why do so many people think that cutting social safety nets is a cheat code?
The people who don't (currently) need them see them as a waste.
The people who don't (currently) need them see them as a waste.
If the state only paid for defense and the justice system, there would be very little reason to tax!
Just a fully militarised state, a la starship troupers.
> The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
I was under the impression they had done that already.
https://en.wikipedia.org/wiki/United_Kingdom_government_aust...
Though one can't help but think it wont be radical enough for conservatives until we simply dispose of those unable to work through some dystopic mechanism or other.
I was under the impression they had done that already.
https://en.wikipedia.org/wiki/United_Kingdom_government_aust...
Though one can't help but think it wont be radical enough for conservatives until we simply dispose of those unable to work through some dystopic mechanism or other.
This was a long time ago. Since then we've been running full speed in the opposite direction.
(from the linked Wikipedia article)
> Coalition and Conservative governments in office from 2010 to 2019 used the term, and it was applied again by many observers to describe Conservative Party policies from 2021 to 2024, during the cost of living crisis.
2024, last year, is "a long time ago"?
> Coalition and Conservative governments in office from 2010 to 2019 used the term, and it was applied again by many observers to describe Conservative Party policies from 2021 to 2024, during the cost of living crisis.
2024, last year, is "a long time ago"?
People use terms, they're often wrong. The last few years since 2019 we've been breaking ever greater records on state spending and borrowing, this is not austerity.
Oh wow I had no idea OnlyFans is from UK. Always thought it was US.
>The UK needs to radically reduce its social safety net and simultaneously cut taxes
Unfortunately that is not a popular opinion in the UK. They want to tax everything, taxing the rich is popular among voters which is why they are doing it. And again the consequence have long been known or told. They are doing it anyway.
Most of the street in London is empty. UK is either number 1 or number 2 in millionaires fleeing the country after China. Property pricing are falling somewhat not because of more supply but because those asset are being sold as part of those moving abroad.
>The UK needs to radically reduce its social safety net and simultaneously cut taxes
Unfortunately that is not a popular opinion in the UK. They want to tax everything, taxing the rich is popular among voters which is why they are doing it. And again the consequence have long been known or told. They are doing it anyway.
Most of the street in London is empty. UK is either number 1 or number 2 in millionaires fleeing the country after China. Property pricing are falling somewhat not because of more supply but because those asset are being sold as part of those moving abroad.
Does London need the Global Rich hanging around if they’re not willing to pay taxes? Is it necessary to have the tax bring in 30 Billion in order for it to be considered a success?
If nothing else, this tax demonstrates to those who DO pay tax, that the Government is willing to treat earners equally and fairly, regardless of how much tax it brings in.
They do pay taxes though. Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes. This change is likely to lower tax revenues.
> Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes
It's curious that the percentages used to defend not taxing the rich (whether they are UK citizens, or operating as "non-doms") tend to be what percentage of the tax burden they pay. But it's never what percentage of their income and capital gains they pay as tax.
I think the latter is a fairer representation, considering we have a progressive taxation system. Someone who is earning over £125k a year should be paying close to 45% of their income and capital gains.
The question is: are they? If not, why not?
It's curious that the percentages used to defend not taxing the rich (whether they are UK citizens, or operating as "non-doms") tend to be what percentage of the tax burden they pay. But it's never what percentage of their income and capital gains they pay as tax.
I think the latter is a fairer representation, considering we have a progressive taxation system. Someone who is earning over £125k a year should be paying close to 45% of their income and capital gains.
The question is: are they? If not, why not?
The world has to be dealt with how it is. For example:
>The question is: are they? If not, why not?
Because they're non-domiciled and for several centuries the UK didn't tax foreign income of non domiciled residents. It's not a mystery, it was the law.
The non-dom's came to the UK because of this tax regime. The UK can either have the revenue they get from them, which is substantial. Or, it can remove the non-dom regime, hope they stay, but be prepared for total loss of their revenue if they leave.
There's no magical third choice where everyone in that non-dom category stays just cause and pays more money. So far it looks like UK tax revenues are set to diminish from this change.
>The question is: are they? If not, why not?
Because they're non-domiciled and for several centuries the UK didn't tax foreign income of non domiciled residents. It's not a mystery, it was the law.
The non-dom's came to the UK because of this tax regime. The UK can either have the revenue they get from them, which is substantial. Or, it can remove the non-dom regime, hope they stay, but be prepared for total loss of their revenue if they leave.
There's no magical third choice where everyone in that non-dom category stays just cause and pays more money. So far it looks like UK tax revenues are set to diminish from this change.
If they're here they tend to spend money, and employ people.
That all ends up as tax slightly more indirectly.
So what you are saying is, it eventually trickles down?
edit: The reality is they don't spend enough for it to offset the harms that wealth inequality brings.
I know a couple of people who have been using this London loophole as a way to avoid paying taxes anywhere at all. They are not residents here, they are not residents there, and their income is earnt globally. So they think they shouldn't have to pay tax to any particular country.
edit: The reality is they don't spend enough for it to offset the harms that wealth inequality brings.
I know a couple of people who have been using this London loophole as a way to avoid paying taxes anywhere at all. They are not residents here, they are not residents there, and their income is earnt globally. So they think they shouldn't have to pay tax to any particular country.
>edit: The reality is they don't spend enough for it to offset the harms that wealth inequality brings.
source? Has "the harms that wealth inequality brings" even been quantified?
source? Has "the harms that wealth inequality brings" even been quantified?
Yes, and London is a case point for it: the affordability of housing. Anyway, I don't even need to trawl for links, https://en.m.wikipedia.org/wiki/Effects_of_economic_inequali... has plenty.
>the affordability of housing
If you're trying to imply the housing shortage only exists because rich people have too much money and are making prices too high for everyone else, that doesn't make much sense. If everyone had the same amount of wealth, you'd still have the same housing crisis. Specifically, there's still going to be the same amount of houses in London, and the same amount of people who want to live there but can't. The problem of housing in London is that there isn't enough for everyone who wants to live there, not that the rich are making prices unaffordable.
If you're trying to imply the housing shortage only exists because rich people have too much money and are making prices too high for everyone else, that doesn't make much sense. If everyone had the same amount of wealth, you'd still have the same housing crisis. Specifically, there's still going to be the same amount of houses in London, and the same amount of people who want to live there but can't. The problem of housing in London is that there isn't enough for everyone who wants to live there, not that the rich are making prices unaffordable.
> The problem of housing in London is that there isn't enough for everyone who wants to live there, not that the rich are making prices unaffordable.
And why might that be? Could it be that the rich are using their wealth and disproportional influence that wealth gives them to slow down or block new development to keep their property values high, or are we supposed to believe that places where housing is used as an investment vehicle are just naturally incompetent at building more housing?
And why might that be? Could it be that the rich are using their wealth and disproportional influence that wealth gives them to slow down or block new development to keep their property values high, or are we supposed to believe that places where housing is used as an investment vehicle are just naturally incompetent at building more housing?
That's not entirely true. The rich have been buying multiple houses in London, as well as buying rows of housing and joining them internally. Plus if the market is for the wealthy then the prices are controlled by that. You can argue that London has always been a wealthy city, but things have really gone into overdrive over the last 2 decades.
Both of these things are true. London doesn't build enough but rich people are sitting on supply and raising prices. London needs to build more houses as well as prevent people from turning them into Airbnbs or investment properties.
Are they? Or are they there to outcompete ordinary people for houses, labour, etc?
We don't need a bigger market for luxury dog sitters or sports car manufacturing, better allocate those resources for childcare, elder care, or other chronically understaffed fields.
We don't need a bigger market for luxury dog sitters or sports car manufacturing, better allocate those resources for childcare, elder care, or other chronically understaffed fields.
That's just arguing trickle down economics, which has a decades long story of failure.
>That's just arguing trickle down economics, which has a decades long story of failure.
Deng Xiaoping's "let some people get rich first" worked out pretty well.
Deng Xiaoping's "let some people get rich first" worked out pretty well.
This worked because China had very strong regulatory frameworks and redistribution was at center of that philosophy. The entire point of letting a few people get rich was that those people who get rich will need to pay taxes to redistribute that wealth around the country.
The people who hoard the wealth in the US actively attack regulation and avoid taxes so that they don't have to redistribute the wealth. At that point, you're a drain on the system.
The people who hoard the wealth in the US actively attack regulation and avoid taxes so that they don't have to redistribute the wealth. At that point, you're a drain on the system.
>This worked because China had very strong regulatory frameworks and made sure the wealth was redistributed.
Source? Aside from some lip service paid about "common prosperity", China definitely does not have a strong wealth redistribution system. I can't find good metrics on size of welfare systems specifically, but using the crude metric of government revenue as % of GDP, it's clear that China isn't some sort of global leader in redistribution.
https://en.wikipedia.org/wiki/File:Government_revenues_as_a_...
Source? Aside from some lip service paid about "common prosperity", China definitely does not have a strong wealth redistribution system. I can't find good metrics on size of welfare systems specifically, but using the crude metric of government revenue as % of GDP, it's clear that China isn't some sort of global leader in redistribution.
https://en.wikipedia.org/wiki/File:Government_revenues_as_a_...
> Aside from some lip service paid about "common prosperity", China definitely does not have a strong wealth redistribution system
I don't think this does your argument any favors because by your words, it didn't work. Because you're right, China's "let a few people get rich" idea led to massive wealth inequality but redistribution was always at the center of the idea and what I'm talking about are recent reforms that Xi is taking to accelerate that redistribution such as and introducing salary caps, increasing taxes, and creating more social security programs the rich have to pay into. So China is right now building their strong wealth redistribution network.
I don't think this does your argument any favors because by your words, it didn't work. Because you're right, China's "let a few people get rich" idea led to massive wealth inequality but redistribution was always at the center of the idea and what I'm talking about are recent reforms that Xi is taking to accelerate that redistribution such as and introducing salary caps, increasing taxes, and creating more social security programs the rich have to pay into. So China is right now building their strong wealth redistribution network.
> what I'm talking about are recent reforms that Xi is taking to accelerate that redistribution such as and introducing salary caps, increasing taxes, and creating more social security programs the rich have to pay into. So China is right now building their strong wealth redistribution network.
and its gdp growth, prosperity, and investment rate going down at an exactly same rate…
and its gdp growth, prosperity, and investment rate going down at an exactly same rate…
Prosperity according to which metric?
"GDP growth" and "investment rate" are just really terrible proxy indicators for the thing most people actually care about, i.e. quality of life for the common person. Without context they're just distasteful weasel words that strongly imply that GDP is somehow representative of the quality of life, which only serves to trick people into voting against their own interests.
"GDP growth" and "investment rate" are just really terrible proxy indicators for the thing most people actually care about, i.e. quality of life for the common person. Without context they're just distasteful weasel words that strongly imply that GDP is somehow representative of the quality of life, which only serves to trick people into voting against their own interests.
So? Quality of life has improved and they have virtually eliminated extreme poverty by focusing on this redistribution[0]. Ask those people how they feel about GDP growth slowing down. They don't care.
[0] https://msadvisory.com/quality-of-life-in-china/
[0] https://msadvisory.com/quality-of-life-in-china/
Likely you’ve been flagged because everyone on hackernews refuses to see themselves as working class and think that we’re the global elite that needs protecting.
“Failure” is of course subjective, but I would say that the gargantuan increase in wealth inequality is a datapoint in favour of suggesting that its a failed model.
Post-War consensus Britain was a golden age, and neoliberalism has been harmful to the quality of life for an overwhelming number of British people. This is just factual, by all the data we have.
“Failure” is of course subjective, but I would say that the gargantuan increase in wealth inequality is a datapoint in favour of suggesting that its a failed model.
Post-War consensus Britain was a golden age, and neoliberalism has been harmful to the quality of life for an overwhelming number of British people. This is just factual, by all the data we have.
They don’t need to be there to employ people, and they don’t spend as much as most people do as a portion of their income or wealth.
I'm not claiming they pay as much tax or spend as much as percentage; but they do spend money in the country; it might not be a fair amount etc - but it's a useful amount going into the pot. So if you emphasise fairness they leave and you have less tax to spend on the poor.
As long as they're not actively doing bad things, I'd rather have the cash coming into the country.
If, say, a megarich person who only operated their business in that country left, would the economic system be hurt after the initial shock wore off? They aren’t like doing charity work; in principle it’s either net zero into and out of their companies or producing value by the function of the company, and if the latter then shouldn’t whatever niche they occupied before be quickly filled? I don’t really understand the economic logic, and I’d genuinely appreciate an explanation because maybe I’m just not informed.
And if they just pay tax like everyone else, even more tax!
slightly more indirect, with more loopholes with more of the cash exiting the cash flow cycle, choking the life out of the economy.
There are plenty of people with money, who do pay taxes, who can start those businesses. We don’t need trickle down economics in order to function as a society.
I employ people and I am not a billionaire. I also pay my taxes. Crazy I know.
Would you still pay if you knew for certain you'd get away with it? If yes, why, or why not?
Yes, I took from my community to get to where I am. I used libraries, roads, and social services. Ethically, it's only fair that you pay it back and give other people the same chance I had. If you have clean water coming out the tap then you benefit from people paying taxes.
That is noble, but what about taxes funding things with which you disagree, e.g. wars or whatever else with what you disagree completely, with passion?
As for the down-voter of my parent post, I would like to say that the question was genuine, out of curiosity. I do not see the reason for the down-vote, really.
As for the down-voter of my parent post, I would like to say that the question was genuine, out of curiosity. I do not see the reason for the down-vote, really.
For the record I didn't downvote you. As for your question, I get what you are getting at but I don't get to pick and choose where my taxes go and you will never 100% agree with everything being spent on a government level.
If it got to a situation where libraries aren't being funded and water isn't clean, which isn't out of the realm of possibility with this administration, then I may need to reevaluate my stance but right now I'm fine paying what I owe.
If it got to a situation where libraries aren't being funded and water isn't clean, which isn't out of the realm of possibility with this administration, then I may need to reevaluate my stance but right now I'm fine paying what I owe.
It is OK, I suspected it was not you.
By the way, I was just reading this: https://news.ycombinator.com/item?id=44630810.
By the way, I was just reading this: https://news.ycombinator.com/item?id=44630810.
"slightly more indirectly" is an interesting way to say "by distorting local economies and politics around the idiosyncratic needs and desires of a very small number of uber-wealthy foreigners."
According to the article, there was one person who was hiring over 100 people to take care of their needs. That person is now leaving the UK.
The irony of a superrich claiming to feel 'unwelcome' in a country while claiming non-domiciled status in it cannot be lost on the author. Also, for all the talk of scaring away "job creators" I doubt the guy running a "Dubai-based venture capital firm" was creating many jobs in the UK.
The number of non-doms fell from 74,100 to 73,700 in the year up to April 2024, whilst tax intake from them increased by £100m. I do not consider 400 out of 74,100 as them fleeing....
[1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU via @FT
[1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU via @FT
A lot of magical thinking in policy these days. Global rich people went to London BECAUSE of the tax treatment.
There was no magical property of London that attracts people DESPITE higher taxes.
Very difficult to have any policy discussion when a second order effect is involved.
There was no magical property of London that attracts people DESPITE higher taxes.
Very difficult to have any policy discussion when a second order effect is involved.
Why does it have to be assumed that having the ultra wealthy living in your country and not paying taxes is a net positive? It seems close minded to just ignore the possibility that those people are causing more harm than good.
I think the consensus view is that they are massive net positive contributors (they still pay a lot in taxes in terms of things stamp duty or VAT, they spend lots of money in the country supporting business and employing people, and they don’t consume much in the way of resources like using the NHS or publicly funded schools).
I think the optics are clearly bad but the question I think people really have to ask is what they rather these people paying something in the country, or nothing at all (because there’s nothing keeping them there if it’s viewed as too expensive to stay)
I think the optics are clearly bad but the question I think people really have to ask is what they rather these people paying something in the country, or nothing at all (because there’s nothing keeping them there if it’s viewed as too expensive to stay)
Most of the luxury and high end restaurants are closing down precisely because they are leaving. Many with a lot of spending, including their employees, which do get VAT taxed as part of their consumption. They also hire a lot of people and stayed after Brexit for one reason or another, Football, Culture, Kid's Education, Use of English, Comparatively high living standard in London compared to other European Cities. They stayed even after Brexit, but I think with a lot of things happening a lot are moving. And within their circle knowing others are moving elsewhere has an effect on others planning to move as well.
Very unfortunate. Brexit didn't bring as much damage as some might expect. But this new government, or may be even previous government as well all compounded to the decision happening now.
Very unfortunate. Brexit didn't bring as much damage as some might expect. But this new government, or may be even previous government as well all compounded to the decision happening now.
It's not an assumption. The article stated that non domiciled residents DO pay a lot of taxes. That's why the UK is concerned that they are leaving and modelled against that risk.
I did a quick check and it seems like non dom's are about 0.11% of UK residents and pay about 1.24% of UK taxes. And this doesn't account for indirect benefits such as taxes paid on wages they generate.
I did a quick check and it seems like non dom's are about 0.11% of UK residents and pay about 1.24% of UK taxes. And this doesn't account for indirect benefits such as taxes paid on wages they generate.
if i understood the article, these people (1) didn’t make their money in your country, and (2) are not making money in your country. they just happen to reside there. it seems nonsensical to me to tax revenue that was made in foreign land. but people who love and swear by taxes think that more tax revenue can solve world hunger.
if the uk wants tax money on revenue maybe they should incentivize these so-called super-rich to run their affairs from within the uk?
if the uk wants tax money on revenue maybe they should incentivize these so-called super-rich to run their affairs from within the uk?
I’d presume they are spending a lot of money locally and probably employing a staff locally and driving other economic activity locally but I guess I could be wrong.
A rich eats three meals a day, just like everyone else. They may eat nicer food, but they do t consume that much more than the average person. Indeed, the rich tend to hoard their wealth, removing it from the economy while the average person spends most of the money they earn.
Taxing the billionaires is a net plus for any economy.
Taxing the billionaires is a net plus for any economy.
What do you mean by hoard their wealth? I assume like everyone else they have their wealth in banks/stocks etc and not matreses.
How is it a net plus though?
Is there's a serious hike in taxes the billionaires will just leave and open companies elsewhere
Is there's a serious hike in taxes the billionaires will just leave and open companies elsewhere
They already "open companies elsewhere". From the article, the non-dom status is a tax-exemption on a non-dom for profits and revenues from businesses outside the UK.
If these non-dom billionaires leave, and they aren't currently paying tax, will we even notice?
The housing market noticed; again from the article, the value of properties valued above £10m dropped by 37%. So these "just leavers" aren't just leaving, they are taking a near 40% hit on selling up.
If these non-dom billionaires leave, and they aren't currently paying tax, will we even notice?
The housing market noticed; again from the article, the value of properties valued above £10m dropped by 37%. So these "just leavers" aren't just leaving, they are taking a near 40% hit on selling up.
So then leaving is giving the government less tax revenue and hence less money for other people
If only there was some historical data, maybe even 30 years of it, that could tell us whether or not putting money in the hands of the ultra wealthy had a sort of “trickle down” effect that benefited everyone else too!
Fine, but is there any data that having ultra wealthy residents in your country(like Sunak's wife) harms everyone else?
The GP is being sarcastic, we have 30 years of evidence.
It shows that trickle down economics doesn't happen.
The harm you're looking for is massively inflated asset prices, for example pushing housing out of the affordable range of normal residents and the actual tax payers.
So the mega rich turn out to be parasites in many ways.
It shows that trickle down economics doesn't happen.
The harm you're looking for is massively inflated asset prices, for example pushing housing out of the affordable range of normal residents and the actual tax payers.
So the mega rich turn out to be parasites in many ways.
Also, more than once, the mega rich caused my meat to spoil. Terrible people!
I know you think you’re joking but I’d encourage you to consider the consequences of deregulating the food industry.
Real estate inflation is a pretty obvious way it does that.
> putting money in the hands of the ultra wealthy
that’s a very sinister way to describe the reward for their extraordinary efforts. who’s putting money in their hands? where did this ‘who’ get the money from?
that’s a very sinister way to describe the reward for their extraordinary efforts. who’s putting money in their hands? where did this ‘who’ get the money from?
> who’s putting money in their hands
If we're talking about foreign oligarchs living in London, I suspect a fair amount of the money is coming from Russian organized crime.
If we're talking about foreign oligarchs living in London, I suspect a fair amount of the money is coming from Russian organized crime.
what are these 'extraordinary efforts'?
if the wealth isn’t inherited then it obviously requires extraordinary effort to amass. i’m not a billionaire and it’s not from a lack of trying to be. the fact that my efforts over the years—which are non-trivial btw—haven’t made me one is a clear signal.
starting and running a successful business is extraordinary effort. my life is better thanks to founders of all the companies whose good and services i depend on. i’m full of gratitude for their extraordinary efforts because they’ve made life worth living.
starting and running a successful business is extraordinary effort. my life is better thanks to founders of all the companies whose good and services i depend on. i’m full of gratitude for their extraordinary efforts because they’ve made life worth living.
That is the theory, but unlike taxes there
is neither an obligation to spend nor a required threshold to spend.
So basically just hoping that billionaires spend and trickle down.
So basically just hoping that billionaires spend and trickle down.
London is also an attractive global city like few others. Most rich people would not want to live in Andorra-la-Vella just for tax breaks.
This might be persuasive if the reports didn't indicate that substantially more non-doms are leaving the UK than expected. The options are not a binary UK or Andorra.
There aren't many global cities that can compare. New York, Paris, Tokyo, possibly Seoul or the San Francisco Bay Area. Dubai isn't it, unless all you care about is shopping.
You still have not reckoned with the fact that they are leaving. Whatever else is true the non-domiciled have determined that "somewhere else" is more attractive than the UK without the non domiciled tax regime.
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> a centuries-old tax loophole, abolished in April, that catered to the global rich. The nondomiciled—or non-dom status, as it is known—allowed foreigners living in the U.K. to pay tax only on what they earned domestically. Profits made abroad were ignored unless brought into the U.K.
For virtually every other jurisdiction, natural persons pay tax where they live, not where they source their income.
If I happen to work for a foreign corporation, I don’t get to skip paying tax.
If I happen to work for a foreign corporation, I don’t get to skip paying tax.
In the US you pay taxes in the state where you earn the income and where you live. So for example if you own a pass-though tax corporation and it earns income in all states then you must file and pay taxes in all states.
Not true. This is only true for US which taxes your global income.
Most of the world taxes only income earned in that country.
> If I happen to work for a foreign corporation, I don’t get to skip paying tax.
Sure, because you earned it your country, and not in the country of domicile of foreign corporation.
EDIT: Correction, I see now that most countries do tax worldwide income, just that they have DTA so you offset taxes paid abroad.
Most of the world taxes only income earned in that country.
> If I happen to work for a foreign corporation, I don’t get to skip paying tax.
Sure, because you earned it your country, and not in the country of domicile of foreign corporation.
EDIT: Correction, I see now that most countries do tax worldwide income, just that they have DTA so you offset taxes paid abroad.
We (the UK) have a very extensive set of double taxation treaties too. The point of non-dom status is that it doesn't even matter if your earnings were taxed elsewhere: they're still not liable in the UK.
It’s standard in Europe and many other countries to tax their “tax residents” on their worldwide income. The tricky part is that sometimes that external income is also taxed at source, but this is usually taken care of by tax treaties, which means that you pay the higher of the tax rates, but only once.
I live in europe, and I would be breaking the law if this would true. Would love to see some citations.
It's only the US which taxes worldwide income. It's not true for rest for the world.
It's only the US which taxes worldwide income. It's not true for rest for the world.
Most countries tax worldwide income for the tax residents. Where the US is different is that US citizens need to report their income (and sometimes pay taxes) even if they don’t live in the US.
You may be breaking the law. It’s common to owe taxes on world wide income in your country of tax residence. I imagine this is the same across the EU but open to be corrected
https://taxsummaries.pwc.com/ireland/individual/taxes-on-per...
https://taxsummaries.pwc.com/ireland/individual/taxes-on-per...
Ok, so it's only US and Ireland and maybe a few others that tax worldwide income.
Still the common norm is that PIT is only levied on income earned in the country.
Still the common norm is that PIT is only levied on income earned in the country.
I believe most, if not all, European countries tax residents on worldwide employment and capital income.
It’s not just Ireland, almost all (if not all?) EU counties do it:
https://europa.eu/youreurope/citizens/work/taxes/income-taxe...
You mentioned Estonia in another comment - it might be the case that Estonia is a special case or has a scheme for attracting talent that doesn’t include worldwide tax
https://europa.eu/youreurope/citizens/work/taxes/income-taxe...
You mentioned Estonia in another comment - it might be the case that Estonia is a special case or has a scheme for attracting talent that doesn’t include worldwide tax
Happy to be corrected.
I see now that most countries do tax worldwide income, just that most of the time they have DTA agreements so you can offset tax paid in other countries against your tax bill.
I see now that most countries do tax worldwide income, just that most of the time they have DTA agreements so you can offset tax paid in other countries against your tax bill.
Because it allows people to very easily funnel their income through offshore companies, and avoid being taxed on it because it’s “earned” in Cyprus or Cayman Islands.
_good_. the average person is struggling to feed and shelter themselves and we’re worried that if we don’t coddle the rich the economy will collapse. let them leave and we can rebuild a society that supports everyone.
Wrong, our society is here to support pensioners (one fifth of the population) and those on disability benefits (one quarter of the working age population). Every millionaire that leaves, leaves a disproportionate hole in the amount of tax collected and we borrow more to cover the gap. This will continue until the IMF is forced to step in.
I really agree with you, except I don't think we should be letting them leave
I think we should be taking a page out of French History
Every so often I think the wealthy classes need a reminder that they only get to have what they have at the pleasure of the lower classes
I think we should be taking a page out of French History
Every so often I think the wealthy classes need a reminder that they only get to have what they have at the pleasure of the lower classes
Yeah, give your family's money to trump so that he can redistribute it to the poor.
Are these people really "investors and entrepreneurs" in the UK economy if they were staying there specifically as a tax dodge, when any profits from UK economic activity would always have been taxed?
Is this a bad thing? You'd only leave if you weren't contributing to the local economy. People who, for example, run a small business in the UK aren't impacted at all.
How is a rich person living in London not contributing to the economy? They don't actually make their money in United kingdom, they just import it to live near good Indian food, fish and chips, and the theater. Theatre.
Not paying taxes while enjoying the benefits?
Being able to pay higher prices than locals so prices for goods and housing go up? "investment properties" and such
Being able to pay higher prices than locals so prices for goods and housing go up? "investment properties" and such
They pay their vats and they pay property taxes and presumably have insurance and grocery bills etc.
Which benefits are they enjoying that they are not paying the taxes for? National defense?
Which benefits are they enjoying that they are not paying the taxes for? National defense?
If you accept the premise that these individuals are net contributors (paying far more in taxes than they consume in services), and that their income and assets are largely non-UK and mobile, then the reality is simple: you either compete for them and treat them differently, or you lose them to jurisdictions that will.
Some individuals are net assets. Many are not.
If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost.
This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative.
Then you have billionaires like Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive).
Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).
If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost.
This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative.
Then you have billionaires like Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive).
Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).
That's the thing I never understand about tax the rich, as soon as you do that they're going to leave. Well even before you do that they're going to leave. And a lot of these people do employ a lot of people so they just start companies elsewhere.
And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt.
I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt.
I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
> And a lot of these people do employ a lot of people so they just start companies elsewhere.
Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries.
If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries.
If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
Most billionaires do employee people in the countries in which they live.
Making some types of billionaires leave is a benefit.
Everybody else should close these loopholes as well for both individuals and corporations.
The minimum corporate tax of 15% is one place to start:
https://taxfoundation.org/blog/global-tax-agreement/
The minimum corporate tax of 15% is one place to start:
https://taxfoundation.org/blog/global-tax-agreement/
Well the USA isn't following it so it's dead. But also, there were loopholes making it meaningless. For example, here in Switzerland the government said they'd follow it but local governments could provide rebates to companies.
And why not? We don't need the extra revenue. Why should we raise taxes on local companies when we don't want the money? Just because other countries can't control their spending why do we have to raise our taxes? It's stupid.
And why not? We don't need the extra revenue. Why should we raise taxes on local companies when we don't want the money? Just because other countries can't control their spending why do we have to raise our taxes? It's stupid.
To call it a loophole makes no sense to me.
Also, smarter policy would be like what Estonia does
- CIT should only be applicable when dividends are paid. So corporations can reinvest that money in the business and not be taxed on it.
- PIT on dividend income should be 0, since that amount has already been taxed(CIT) and the stock holder has paid his due share on that income as a owner of corporation.
Also, smarter policy would be like what Estonia does
- CIT should only be applicable when dividends are paid. So corporations can reinvest that money in the business and not be taxed on it.
- PIT on dividend income should be 0, since that amount has already been taxed(CIT) and the stock holder has paid his due share on that income as a owner of corporation.
>CIT should only be applicable when dividends are paid.
Or dividends should be taxed as normal income.
Dealing with capital gains tax is messier but not impossible.
Or dividends should be taxed as normal income.
Dealing with capital gains tax is messier but not impossible.
That‘s why exactly why Cyprus guarantees the non-dom benefits for 27 years
That is probably a good thing.
This didn't happen, the only evidence is PR from one company
https://taxjustice.net/press/millionaire-exodus-did-not-occu...
https://taxjustice.net/press/millionaire-exodus-did-not-occu...
Before just accepting this at face value, New Statesman claim this is not the case:
https://www.newstatesman.com/politics/2025/07/the-british-we...
https://www.newstatesman.com/politics/2025/07/the-british-we...
Yes, of non Dom's only 400 have left out of just over 70,000
What if you target 0% inflation and instead tax assets at 2%? Same effect as “good inflation”, encouraging investment rather than hoarding, but it funds government rather than just devaluing the currency?
Workers have an irrational dislike of their salary or wages ever going down. The main benefit to 2% per year inflation is giving employers a way to reduce real wages 2% per year during a downturn without the worker noticing.
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Most comments on this thread go the way of: “You’ll own nothing and you’ll be happy.”
When is enough going to be enough? Using the example of this article, the UK. There was a 70% increase in government spending during the last 10 years. Do you think that you are getting 70% better public services?
Where is the government spending all our money? And what kind of propaganda is going on to make the people believe the answer is even more taxes?
When is enough going to be enough? Using the example of this article, the UK. There was a 70% increase in government spending during the last 10 years. Do you think that you are getting 70% better public services?
Where is the government spending all our money? And what kind of propaganda is going on to make the people believe the answer is even more taxes?
I love it when the fairy tail libertarianism of this website meets the reality of the UK.
I wonder what people actually think of this result. "tax-the-rich" makes very limited sense unless applied internationally. Many of the super rich are super rich because they have serious influence over, or outright control of foreign states (US rich are a large exception worldwide). Nobody in the US is even 1% as rich as Putin, or Xi, or frankly even just as rich as the grand duke of Luxembourg is.
You cannot tax these people directly, because they'll leave.
You cannot have international cooperation on tax treaties because these people control states.
In other words: you can only tax them either through war, or by totally blowing up trade relationships.
You cannot tax these people directly, because they'll leave.
You cannot have international cooperation on tax treaties because these people control states.
In other words: you can only tax them either through war, or by totally blowing up trade relationships.
One of these rich persons you mentioned is very unlikely to decide he's going to leave Moska-Oblast and retire in Monaco or anywhere else that's doesn't have a thick bunker at the ready for him.
> Nobody in the US is even 1% as rich as Putin
Putin is estimated to be up to $200 billion in wealth.
The top 4 Americans are all more wealthy: Musk, Zuckerberg, Bezos, Ellison.
Putin is estimated to be up to $200 billion in wealth.
The top 4 Americans are all more wealthy: Musk, Zuckerberg, Bezos, Ellison.
There are other kinds of wealth, like the ability to have your enemies accidentally fall out of windows.
Putin controls the entire Russian economy. In other words, by today's valuations for companies his net worth would be something like 40*GDP(Russia). Which works out to about 80 Trillion USD.
You could say that number is artificial. But you could say the same about any stock market valuation. Even that ignores that even 80 Trillion wouldn't buy the power Putin has. It would, for example, not buy 8000 nukes. I'm 100% sure that if Elon Musk threatened to nuke Washington he'd be in prison within the hour, and if his wealth was 1600 times bigger than it is (which would bring him near Putin), that wouldn't change things. Reality is not a superman movie.
The grand duke of Luxembourg is worth about 400 billion USD by the same measure, or a bit more than Elon Musk (although that ignores that the risk to Luxenburg as a country is MUCH less than the risk to Elon Musks' companies)
You could say that number is artificial. But you could say the same about any stock market valuation. Even that ignores that even 80 Trillion wouldn't buy the power Putin has. It would, for example, not buy 8000 nukes. I'm 100% sure that if Elon Musk threatened to nuke Washington he'd be in prison within the hour, and if his wealth was 1600 times bigger than it is (which would bring him near Putin), that wouldn't change things. Reality is not a superman movie.
The grand duke of Luxembourg is worth about 400 billion USD by the same measure, or a bit more than Elon Musk (although that ignores that the risk to Luxenburg as a country is MUCH less than the risk to Elon Musks' companies)
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Doesn't the billionaire Rupert Murdoch ultimately own the WSJ?
No one ever looks at taxes and says
"hey guys between income tax, and VAT and other goods taxes we literally take more than 50% of the money that the entire lower and middle class is earning! This should be more than enough by a factor of two at the least to run our shitty bureaucracy and public services"
Nope it's always
"Who can we tax more? How to we steal more money for our shitty novelty projects and ideological madness"
Anyone resource strong enough to leave, that usually is the upper class, will eventually do so. Leaving even more predatory taxation pressure against the lower social strata
"hey guys between income tax, and VAT and other goods taxes we literally take more than 50% of the money that the entire lower and middle class is earning! This should be more than enough by a factor of two at the least to run our shitty bureaucracy and public services"
Nope it's always
"Who can we tax more? How to we steal more money for our shitty novelty projects and ideological madness"
Anyone resource strong enough to leave, that usually is the upper class, will eventually do so. Leaving even more predatory taxation pressure against the lower social strata
Good riddance
On behalf of the US and long suffering Commanders fans, we don't want Dan Snyder back.
> The exemption was restricted over time to largely benefit foreigners who don’t expect to live in the U.K. permanently.
Sounds like it worked out as planned, since they're leaving now.
Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
Sounds like it worked out as planned, since they're leaving now.
Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
Farmers with active farms have not been paying inheritance tax and won't until 2026, and even then there are ways to avoid most of it (couples can pass on £3 million without tax for example). See https://www.gov.uk/government/news/what-are-the-changes-to-a...
The other side of the coin is that inheritance is allowed at all. We could tax at 100% above a certain threshold, wealth only exists because it is permitted through the recognition of property rights. 40% is arguably more than reasonable when you’re desiring to transfer generational power the beneficiary did not earn, but simply was lucky to be in the right lineage. It is a lottery ticket.
The 40% only applies to the portion of the estate that exceeds the tax-free threshold, which is currently £325K. If you leave your home to your children or grandchildren, that can be raised to £500K, and if you leave it to your spouse, it increases to £650K.
There are also ways to reduce the tax rate, like through charitable donations.
Like in the US with estate taxes, relatively few people are affected by it.
There are also ways to reduce the tax rate, like through charitable donations.
Like in the US with estate taxes, relatively few people are affected by it.
It's 40% above a threshold; the trouble is that the threshold is laughably tiny when you compare it to house prices.
It's also relatively easily defeated by transferring assets to others well in advance of your death, which is the kind of thing very wealthy people are more likely to be able to arrange.
It's also relatively easily defeated by transferring assets to others well in advance of your death, which is the kind of thing very wealthy people are more likely to be able to arrange.
Very unmeritocratic society if you can just win by inheriting half of 20 billion dollars.
Why would I care if someone inherits billions of dollars. I'm going to go on enjoying my life, rather than wasting it being upset someone else has more than me.
Because all that wealth gives the person an outsized ability to influence government. See the 2024 US election cycle for numerous examples.
I’m not even “rich” and yet thinking of moving myself and my assets somewhere else like Dubai. Why should I pay into a system I get virtually nothing out of? Furthermore my country took my freedom of movement in the EU away. That’s another incentive for me to leave - five years in Portugal and I get freedom of movement back.