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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 c

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.

trebligdivad 1y ago
If they're here they tend to spend money, and employ people. That all ends up as tax slightly more indirectly.
- mickgardner 1y ago
  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.
- andrepd 1y ago
  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.
- XorNot 1y ago
  That's just arguing trickle down economics, which has a decades long story of failure.
  - dijit 1y ago
    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.
  - gruez 1y ago
    >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.
    - ujkhsjkdhf234 1y ago
      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.
      - gruez 1y ago
        >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_share_of_GDP,_2022.png https://en.wikipedia.org/wiki/File:Government_revenues_as_a_...
        ujkhsjkdhf234 1y ago
        > 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.
- stefan_ 1y ago
  And if they just pay tax like everyone else, even more tax!
- BriggyDwiggs42 1y ago
  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.
  - trebligdivad 1y ago
    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.
    - BriggyDwiggs42 1y ago
      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.
- sorcerer-mar 1y ago
  "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."
- cam_l 1y ago
  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.
  - gruez 1y ago
    >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?
    - jemmyw 1y ago
      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_inequality https://en.m.wikipedia.org/wiki/Effects_of_economic_inequali... has plenty.
      - gruez 1y ago
        >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.
        ujkhsjkdhf234 1y ago
        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.
- ujkhsjkdhf234 1y ago
  I employ people and I am not a billionaire. I also pay my taxes. Crazy I know.
  - johnisgood 1y ago
    Would you still pay if you knew for certain you'd get away with it? If yes, why, or why not?
    - ujkhsjkdhf234 1y ago
      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.
      - johnisgood 1y ago
        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.
        ujkhsjkdhf234 1y ago
        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.
        johnisgood 1y ago
        It is OK, I suspected it was not you. By the way, I was just reading this: https://news.ycombinator.com/item?id=44630810 https://news.ycombinator.com/item?id=44630810.
- Grimblewald 1y ago
  slightly more indirect, with more loopholes with more of the cash exiting the cash flow cycle, choking the life out of the economy.
graeme 1y ago
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.
- Isofarro 1y ago
  > 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?
  - graeme 1y ago
    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.
throw56t3e8 1y ago
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.

trebligdivad 1y ago

If they're here they tend to spend money, and employ people. That all ends up as tax slightly more indirectly.

mickgardner 1y ago
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.
andrepd 1y ago
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.
XorNot 1y ago
That's just arguing trickle down economics, which has a decades long story of failure.
- dijit 1y ago
  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.
- gruez 1y ago
  >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.
  - ujkhsjkdhf234 1y ago
    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.
    - gruez 1y ago
      >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_share_of_GDP,_2022.png https://en.wikipedia.org/wiki/File:Government_revenues_as_a_...
      - ujkhsjkdhf234 1y ago
        > 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.
stefan_ 1y ago
And if they just pay tax like everyone else, even more tax!
BriggyDwiggs42 1y ago
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.
- trebligdivad 1y ago
  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.
  - BriggyDwiggs42 1y ago
    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.
sorcerer-mar 1y ago
"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."
cam_l 1y ago
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.
- gruez 1y ago
  >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?
  - jemmyw 1y ago
    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_inequality https://en.m.wikipedia.org/wiki/Effects_of_economic_inequali... has plenty.
    - gruez 1y ago
      >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.
      - ujkhsjkdhf234 1y ago
        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.
ujkhsjkdhf234 1y ago
I employ people and I am not a billionaire. I also pay my taxes. Crazy I know.
- johnisgood 1y ago
  Would you still pay if you knew for certain you'd get away with it? If yes, why, or why not?
  - ujkhsjkdhf234 1y ago
    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.
    - johnisgood 1y ago
      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.
      - ujkhsjkdhf234 1y ago
        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.
        johnisgood 1y ago
        It is OK, I suspected it was not you. By the way, I was just reading this: https://news.ycombinator.com/item?id=44630810 https://news.ycombinator.com/item?id=44630810.
Grimblewald 1y ago
slightly more indirect, with more loopholes with more of the cash exiting the cash flow cycle, choking the life out of the economy.

graeme 1y ago

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.

Isofarro 1y ago
> 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?
- graeme 1y ago
  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.

throw56t3e8 1y ago

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.