Non - House prices

Def_II_Royalz said:
Offshore banking needs to be thoroughly policed. Inheritance tax is unfair on regular self-made people.
Click to expand...

Mossy1 said:
Inheritance tax is unfair full stop.My mother has a substantial amount of money in the bank.My sisters keep telling her to get rid of some before she loses a lot to this tax.She refuses to do that because she 'always knows better as I'M YOUR MOTHER' despite we are all over 50 and both sisters work in the financial sector.
Click to expand...

Tbh I don't agree that it's unfair. It's unfair that the richest are able to avoid it like they do with all taxes but from societies point of view its unheathly for the primary driver of wealth to be the parent's wealth rather than the skills and endeavour of the individual.
 
Silent AFCB said:
Yet the FTSE 250 index has comfortably beaten the % increase and the American markets have absolutely obliterated them since 1995. How can house prices not rise somewhat in line with stock markets? If they stagnated then everyone would just stick all their spare cash in a stocks and shares (which most people don’t do enough of anyway, especially with S&S ISAs).
Click to expand...

i have some Novo Nordisk Shares
19,90 DKK ‎7. jan. 2000
637,20 DKK 7. sep. 2021
In 21 years that's some hike.
even the crash of 2016 and the covid slump couldn't halt the rise.
Novo Nordisk
With almost 50% market share by volume of the global insulin market, Novo Nordisk is the leading provider of diabetes-care products in the world. Based in Denmark, the company manufactures and markets a variety of human and modern insulins, injectable diabetes treatments, and oral antidiabetic agents. Novo also has a biopharmaceutical segment (constituting roughly 15% of revenue) that specializes in protein therapies for hemophilia and other disorders.
 
Druss_the_Legend said:
To be fair...there is already a wealth tax in a way. The current lifetime pension you can accrue is £1m. Everything above that is taxed at 55%. Now while people band around £1m as being a lot of money, as a pension pot for two people to retire on its not exactly going to pay for cruises on the Queen Mary every year.

I always struggle with the idea of inheritance tax. Why be complicated with "wealth tax" or one off tax hits. Just increase higher rate tax above a certain figures. Simple, easy and very few people could have any complaints.
Click to expand...

Income is only a tiny proportion of wealth for the most wealthy people. They don't earn primarily through 'income' anyway and so don't pay much tax despite having huge levels of wealth.

Taxing only income penalises a small proportion of the wealthy.
 
davidwhitehead said:
How about a wealth tax ? If your net worth is, say, above £1 million, you pay an extra % tax to help fund our essential public services.
Click to expand...
It wouldn't raise much. The multi-millionaires and billionaires would just clear off out of the country. This tax would only catch people with large houses and people with profitable businesses. Though of course if you are going to tax the profitable business owners to any significant degree, they might decide to sell up to multinationals anyway.

I think people overestimate how much wealth the really wealthy have. According to Wikipedia, there are 54 British billionaires, with £190 billion between them. If they could be persuaded to give up every penny they had and reduce themselves to penury, they still wouldn't have enough to pay for the NHS for 12 months. And if they paid 5%, it wouldn't be enough for the hypothetical £10 billion that they NHS says would cure all its ills.

And of course many of them are not actually British, but just live here, such as the Hinduja brothers; or else are British but live abroad, like Richard Branson and the Barclay brothers. You won't persuade them to stay and pay a wealth tax.
 
dsr-burnley said:
It wouldn't raise much. The multi-millionaires and billionaires would just clear off out of the country. This tax would only catch people with large houses and people with profitable businesses. Though of course if you are going to tax the profitable business owners to any significant degree, they might decide to sell up to multinationals anyway.

I think people overestimate how much wealth the really wealthy have. According to Wikipedia, there are 54 British billionaires, with £190 billion between them. If they could be persuaded to give up every penny they had and reduce themselves to penury, they still wouldn't have enough to pay for the NHS for 12 months. And if they paid 5%, it wouldn't be enough for the hypothetical £10 billion that they NHS says would cure all its ills.

And of course many of them are not actually British, but just live here, such as the Hinduja brothers; or else are British but live abroad, like Richard Branson and the Barclay brothers. You won't persuade them to stay and pay a wealth tax.
Click to expand...

You could start by sorting out the tax they pay on their houses. Council tax is based on the value of the house, but only up to a point. A £2m flat is charged the same as a house that's the size of Buckingham Palace. They manage to charge businesses a percentage of the value of their property but not the ultra wealthy homeowners.
 
klaus_afcb said:
It's not saying house prices have risen by 75%. It's saying they account for 75% of all wealth creation since 1995.

(Unless I've misunderstood you)
Click to expand...

My point was more than while 75% of wealth was created that way, people would have made more putting money in the stock markets since 1995. The S&P 500 index has 10x in value since 1995, the NASDAQ has 3x in the last 5 years. You can get ETF's in these within about 30 minutes, far easier than buying a house and the CGT is less than a second property as well, especially if S&S ISA's were used.

House prices are never going to be too far detached from the markets, it's not possible.
 
Def_II_Royalz said:
Are we not counting income on investments and/or interest then?
Click to expand...

Which is of course included in regular income tax.

The tax system is pretty water tight up to the point of "super rich".

Over 50k and you're paying nearly half your money to the tax man when you think about NI not to mention VAT, council tax, etc. The 1k over 50k is actually about £600 in the bank.

Dividends will let you save some tax and dodge NI (33%, 38% tax for higher and additional tax rates respectively) but that does come after a 20% corporation tax. So if you earned 50k and took a 3k dividend (2k is tax free) that extra 1k of earned company money would actually be about £550 in your bank.

Like Druss said about pensions. If you pay around £1.70 a day from age 18 you'll easily have a million quid by the time you retire which converts to about £45k a year which is again income taxed.

Silent AFCB said:
My point was more than while 75% of wealth was created that way, people would have made more putting money in the stock markets since 1995. The S&P 500 index has 10x in value since 1995, the NASDAQ has 3x in the last 5 years. You can get ETF's in these within about 30 minutes, far easier than buying a house and the CGT is less than a second property as well, especially if S&S ISA's were used.

House prices are never going to be too far detached from the markets, it's not possible.
Click to expand...

Exactly this. My partner had a negative equity home that we rented after we moved in together. She'd invested a 5 figure sum in it and the rent barely covered an interest only mortgage. The insurances, safety checks and the occasional repairs might even have lost us money. After about 5 years we finally got the cash out. It would've been less effort, more fiscally rewarding, and certainly less investment to get a Saturday job at Tesco.

By contrast since about 2018 I've been investing in an ethical (take note XR types!) fund that's had annualised returns of something like 15% including fees.
 
Last edited:
Silent AFCB said:
My point was more than while 75% of wealth was created that way, people would have made more putting money in the stock markets since 1995. The S&P 500 index has 10x in value since 1995, the NASDAQ has 3x in the last 5 years. You can get ETF's in these within about 30 minutes, far easier than buying a house and the CGT is less than a second property as well, especially if S&S ISA's were used.

House prices are never going to be too far detached from the markets, it's not possible.
Click to expand...

Exactly, although galling, better to worry more about what yiu can change, rather than complaining about the 'system'.

Similar to housing, markets tend to run 10-15 year cycles but always trend upwards. We're due a 'correction' following a bull run since the last crash in 2007.

Easy introduction to how investing in index funds works. You're not picking or choosing individual stocks, but investing in the market.

https://jlcollinsnh.com/stock-series/

A good UK site

https://monevator.com/

From there you'll other resources. The sites also lean towards not stretching yourself more than absoloutely necessary when buying a house. There are even the odd arguments that buying a house should not be viewed as an investment and you're better off renting when housing I'd overpriced and sticking any excess in funds for growth. Plus don't have to worry about buying stuff for house, maintenance etc, which generally increase the more expensive the property value is.

If you can't afford to invest, worth looking at financial independence retire early sites to see how people do save on average wages. As I said, I know everyone can't earn high amounts, but also investing in yourself through upskilling, or finding online sidelines to supplement your wage. Not ideal to some I know, but better than complaining about how unfair it is and waiting for something out of your control to change.
 
Last edited:
Kudos said:
By contrast since about 2018 I've been investing in an ethical (take note XR types!) fund that's had annualised returns of something like 15% including fees.
Click to expand...

I'm an XR type - the only investing I want to see is investing time in getting the word "growth" to be seen as a bad thing - everything needs to be reduced. reduce is the way forward! I'll scuttle back under my rock now.
 
RobWells said:
I'm an XR type - the only investing I want to see is investing time in getting the word "growth" to be seen as a bad thing - everything needs to be reduced. reduce is the way forward! I'll scuttle back under my rock now.
Click to expand...

You don't want to see see green companies and technologies grow their market share? Surely does more good then forcing cars to burn more petrol detouring round a drum circle road closure.

I don't think growth is necessarily bad just the mechanism for growth, i.e. more people, more things, more consumption, more disposal.
 
Silent AFCB said:
My point was more than while 75% of wealth was created that way, people would have made more putting money in the stock markets since 1995. The S&P 500 index has 10x in value since 1995, the NASDAQ has 3x in the last 5 years. You can get ETF's in these within about 30 minutes, far easier than buying a house and the CGT is less than a second property as well, especially if S&S ISA's were used.

House prices are never going to be too far detached from the markets, it's not possible.
Click to expand...

Ah, I get you. And sure, that's likely true.

My view is that both these means of wealth generation (house price increases or stock market returns) are reliant on the ownership of capital, and not from productive work. If you own capital, you can increase your wealth massively. If you don't, well, tough. This makes for a highly unequal society, which has negative consequences across the economic spectrum, even for those at the top (health and education outcomes are higher amongst the rich in more equal countries than in more unequal countries).

This is part of the reason why I fundamentally disagree with those suggesting that inheritance taxes are unfair (not that I'm suggesting you're arguing that, Silent AFCB). The vast majority of wealth is not created by someone's hard work (although there are, of course, exceptions) but by returns on their ownership of capital. The ability to freely pass this on to their children (who don't have to do anything to earn it except be born) just continues the cycle of inequality. Poor families with no capital ownership stand next to no chance of socio-economic mobility.

Milanovic (a leading economist on inequality) estimates that 80% of someone's future income can be determined by a combination of where they are born and their parents' income. That leaves only 20% being determined by that person's choices or work ethic. Unfortunately, we live in a nepotistic, rent-based society and not the meritocracy most people believe. Under-taxed inheritance is a driver of that.
 
Kudos said:
You don't want to see see green companies and technologies grow their market share? Surely does more good then forcing cars to burn more petrol detouring round a drum circle road closure.

I don't think growth is necessarily bad just the mechanism for growth, i.e. more people, more things, more consumption, more disposal.
Click to expand...

Sure, green technologies are vital. But why do all sectors of the economy need to grow? Why do we need further expansion at the aggregate level? The majority of clean energy generation over recent decades has been eaten up by increased energy demand, much of which is not necessary.

Economic growth basically requires something to be undervalued (either workers or the environment) in order to create value for a return on investment. There is also no evidence that growth can be absolutely decoupled from greenhouse gases or material resources more broadly. That means that addressing the environmental crisis through growth is basically an oxymoron.

The positive is that we know that further aggregate growth (particularly in rich countries) contributes nothing to increases in wellbeing - if anything, it's actually having a negative effect. This suggest that we can all live better in a post-growth society, where we value time and social participation over material resources. We therefore need to structure our economies around social participation and wellbeing and not around aggregate economic expansion, allowing those sectors of the economy which contribute to wellbeing to flourish and those which don't to shrink. This, of course, requires massive changes to the way we work, the investment economy, production etc. but we're working on it! ;)
 
swapping petrol cars for leccy cars is just keeping the current system going almost exactly as is - all very lovely, but unfortunately not an answer to the problems we face
 
You must log in or register to reply here.

;