Private schools, times a changing?
Discussion
DonkeyApple said:
Zolvaro said:
Notreallymeeither said:
And working people in £1m houses with very considerable mortgages and little equity.
Wealth taxes are based on Net wealth, not just asset value.We all know just how stupid wealth taxation tends to be over income and consumption taxes but given Labour's potential spending requirements and the inevitable need to pay uniongeld while also potentially also not being able to get civil servants to return to working in exchange for the money they've given I'm not sure where else they're going to raise the taxes from? All the remaining wealth is in pensions alongside the artificially inflated property market.
We'll just have to wait and see but they pledged to not change other taxes nor borrowing or to act unfunded so an awful lot of money needs to be lifted from the population. None of which will come from the super affluent nor the bottom end so it does seem logical that just like school fees it'll be pitched as a levy on the 'orrible royally minted but fall hard on the shoulders of the people who pay for everything already.
The pip squeezer is currently getting a new, even higher setting.
Ziplobb said:
GT03ROB said:
There will be working people in £1m houses, earning less than 100k & where are they going to find £20k from to pay that?
thisWe did not decide our house was worth £1m plus. That was the estate agents and RICS. We could afford the £20k to live there but that is no holidays, no eating out, no fast car in the garage basically no nothing. We could sell it but then both kids would have to find their own place at a rent of £1200/£1300 a month and moving out of the area where they were born, educated and their lives are because they cant afford to buy their own house because of estate agents and RICS. Our house in Norfolk or the north of england is not £1m plus either so how is that fair and equal ?
okgo said:
Agree. Especially as someone buying a house just now.
Those sorts of taxes would be enough to make me seriously consider this country as somewhere I’d want to stay.
It will be all the additional tax that drives middle England out of private schooling or cause private schooling to split as it innovates to adjust its cost base to fit. It's worth noting that much of the increase in costs over the last two decades have emanated from very modest schools needing to add more and more ancillary facilities and services to compete in an era of rapidly expanding wealth and hugely increased expectations of first generation consumers and their desire to be also buying social standing with that new wealth. Those sorts of taxes would be enough to make me seriously consider this country as somewhere I’d want to stay.
We are clearly looking at a potential change in that consumer demographic where what is essential begins to stand out from what is desired. Ie, if you boil it down to the one single core requirement which is the best academic achievement in the safest and nicest environment there is a realisation that paying an ex Olympian to coach tennis and using their name in promotional media, financing a state of the art theatre block or even science block with a SEM again used for sales material mainly is non essential if the target customer base suddenly hasn't the excess means with which to indulge their firepit and sexpond conversational requirements alongside the reading out of lists of consumer items and services to fellow office workers after the morning commute in a rented vehicle with an RRP greater that one's annual net take home.
Schools have ridden the absolutely enormous wave of wealth expansion of the last nearly 30 years and invested enormous amounts in brochure content for lifestyle promotions as that has been the correct business model for competing for clients but I think there is a valid argument that the U.K. is now ex that massive social expansion and that schools will have to adapt to fit the next sets of customers and the logical way to do that is now by reducing fees by cutting ancillaries, a reverse of the last few decades.
When it absolutely comes to the crunch, parents will trade away those fripperies for the core of a sound education away from key social elements.
As for people moving to other countries, it really doesn't happen. Not amongst workers anyway. It's what makes them such easy targets. Few are in industries that makes such moves easy or more profitable. Which is why it tends to be an activity done more by the less well off who can find a multitude of similar jobs anywhere in the world in exchange for cheaper living or by the retired for whom it is all about wealth protection not employer income.
DonkeyApple said:
Zolvaro said:
Notreallymeeither said:
And working people in £1m houses with very considerable mortgages and little equity.
Wealth taxes are based on Net wealth, not just asset value.We all know just how stupid wealth taxation tends to be over income and consumption taxes but given Labour's potential spending requirements and the inevitable need to pay uniongeld while also potentially also not being able to get civil servants to return to working in exchange for the money they've given I'm not sure where else they're going to raise the taxes from? All the remaining wealth is in pensions alongside the artificially inflated property market.
We'll just have to wait and see but they pledged to not change other taxes nor borrowing or to act unfunded so an awful lot of money needs to be lifted from the population. None of which will come from the super affluent nor the bottom end so it does seem logical that just like school fees it'll be pitched as a levy on the 'orrible royally minted but fall hard on the shoulders of the people who pay for everything already.
The pip squeezer is currently getting a new, even higher setting.
Currently, there's a staggering glass ceiling between earning from your labour, and earning from your assets. Those relying on their labour have stagnated or gone backwards, those with assets gain a tax exempt leverage to drive more asset acquisition.
It's the old adage about 'first million' versus 'second million'.
I don't think that's a good place to be.
DonkeyApple said:
Which highlights their pure genius as everyone just gears up the on the asset being taxed and moves the capital to another location.
We all know just how stupid wealth taxation tends to be over income and consumption taxes but given Labour's potential spending requirements and the inevitable need to pay uniongeld while also potentially also not being able to get civil servants to return to working in exchange for the money they've given I'm not sure where else they're going to raise the taxes from? All the remaining wealth is in pensions alongside the artificially inflated property market.
We'll just have to wait and see but they pledged to not change other taxes nor borrowing or to act unfunded so an awful lot of money needs to be lifted from the population. None of which will come from the super affluent nor the bottom end so it does seem logical that just like school fees it'll be pitched as a levy on the 'orrible royally minted but fall hard on the shoulders of the people who pay for everything already.
The pip squeezer is currently getting a new, even higher setting.
Indeed - the affluent poor need to be lubing up now.We all know just how stupid wealth taxation tends to be over income and consumption taxes but given Labour's potential spending requirements and the inevitable need to pay uniongeld while also potentially also not being able to get civil servants to return to working in exchange for the money they've given I'm not sure where else they're going to raise the taxes from? All the remaining wealth is in pensions alongside the artificially inflated property market.
We'll just have to wait and see but they pledged to not change other taxes nor borrowing or to act unfunded so an awful lot of money needs to be lifted from the population. None of which will come from the super affluent nor the bottom end so it does seem logical that just like school fees it'll be pitched as a levy on the 'orrible royally minted but fall hard on the shoulders of the people who pay for everything already.
The pip squeezer is currently getting a new, even higher setting.
At least Dennis Healey had the balls to be honest about it
brickwall said:
The question is whether they do a simple rebanding, or (more likely) some kind of proportional payment structure of anything >£1m.
The simple method would be existing council tax (proceeds going to council) then a ‘super tax” of say 1-2% of value above £1m with the proceeds going straight to HMT. So if you live in a £5M house in Westminster, you’re about to get a big bill.
I suspect that, as with the window tax, people would take steps to devalue their homes to avoid the tax. The simple method would be existing council tax (proceeds going to council) then a ‘super tax” of say 1-2% of value above £1m with the proceeds going straight to HMT. So if you live in a £5M house in Westminster, you’re about to get a big bill.
Put your £2m freehold house onto a 5 year leasehold, thereby devaluing it. Split a house into two or three 'separate' flats. Separate the house and garden into two different titles. I'm not a tax accountant (clearly!) but I'm 100% sure ways would be found to get around such a punitive tax.
Sway said:
Currently, there's a staggering glass ceiling between earning from your labour, and earning from your assets.
You generate those assets by taking risk, and using your labour. If assets generate profit, that's risk trade off, as it can also wipe out the entire investment.When you only rely on "labour", you exclude yourself from taking that risk and also the potential reward disappears.
If you create an environment where that potential of wealth generation by investments, disappear with heavy tax, than people won't have any incentive to take risk and there won't be any job to employ "labours"
Not a rocket science really.
ooid said:
Sway said:
Currently, there's a staggering glass ceiling between earning from your labour, and earning from your assets.
You generate those assets by taking risk, and using your labour. If assets generate profit, that's risk trade off, as it can also wipe out the entire investment.When you only rely on "labour", you exclude yourself from taking that risk and also the potential reward disappears.
If you create an environment where that potential of wealth generation by investments, disappear with heavy tax, than people won't have any incentive to take risk and there won't be any job to employ "labours"
Not a rocket science really.
ooid said:
You generate those assets by taking risk, and using your labour. If assets generate profit, that's risk trade off, as it can also wipe out the entire investment.
When you only rely on "labour", you exclude yourself from taking that risk and also the potential reward disappears.
If you create an environment where that potential of wealth generation by investments, disappear with heavy tax, than people won't have any incentive to take risk and there won't be any job to employ "labours"
Not a rocket science really.
these taxes are not about raising revenue, like taxing schoolchildren or the 45% tax rate, they are about making the less well off feel that those wealthier than them are being levelled down and the perception that 'massive profits' are being punished. Those same people will be blind to the fact it will in the long run make everyone poorer.When you only rely on "labour", you exclude yourself from taking that risk and also the potential reward disappears.
If you create an environment where that potential of wealth generation by investments, disappear with heavy tax, than people won't have any incentive to take risk and there won't be any job to employ "labours"
Not a rocket science really.
Zolvaro said:
Gearing just moves the wealth it doesn't make it disappear. Wealth taxes are on global assets so unless you are actively evading tax it will still be considered. Whether wealth taxes are reasonable is a whole other discussion!
That's not how implementations work. The taxes tend to be asset and geolocation specific so you just change how the asset is held and move the wealth. It's why so many wealthy overseas owners of London property are renting at home but owning in the U.K. etc. For example, you have a U.K. property where the net value is to be annually taxed. The solution is to therefore remove that net value by increasing the debt on the asset. You can go one step further and sell up to an SPV and rent it back which can work even better as it is also a vehicle for moving net income out of the U.K. when things like pension caps are in place.
As with all such taxation it doesn't target the people the proponents are priapismic over the thought of it targeting but is just a bill carried by the perfectly normal workers who are trapped at the level where options are few.
A good example being those who just bought normal houses, in normal streets using normal incomes and spent 30 years doing normal jobs to pay off that normal mortgage. The deliberate property asset inflation from 1997 to create a faux wealth euphoria and rampant consumer spending increase from borrowing against that faux wealth means that those completely normal people who didn't partake in the great 21st century shopathon and chattel consumption race but left that faux equity where it was would now be paying a huge annual tax uplift that isn't commensurate with their lifetime income, pension etc. Meanwhile, those who asset stripped themselves living someone else's lifestyle and are essentially renting the property they live in because they've extended the loan and duration so many times they'll never own it would be sitting pretty.
This is the equality of IHt as a wealth tax over living wealth taxes.
The spiking of council tax to bury an annual property wealth tax in it is quite interesting as it will force many pensioners to move but also push many emigrants to the SE to return to the cheaper regions as it would fundamentally be a tax on the SE. It would arguably create quite a potential change in the London centric nature of the service economy biased U.K. There are fair arguments on either side with regards to that. Afterall, the housing problem in the U.K. isn't really one of affordability but a combination of a failure of local authorities to enforce the construction of social/affordable housing and instead favouring the money being spent building a new club house or other municipal facility but primarily an employment issue where the majority of jobs are in the SE etc.
Zolvaro said:
ooid said:
Sway said:
Currently, there's a staggering glass ceiling between earning from your labour, and earning from your assets.
You generate those assets by taking risk, and using your labour. If assets generate profit, that's risk trade off, as it can also wipe out the entire investment.When you only rely on "labour", you exclude yourself from taking that risk and also the potential reward disappears.
If you create an environment where that potential of wealth generation by investments, disappear with heavy tax, than people won't have any incentive to take risk and there won't be any job to employ "labours"
Not a rocket science really.
For much of the asset owning class, the 'risk' was non existent. Financial regulation, asset prices, other historic factors mean people who happened to be born in a specific couple of decades and had an income when the conditions were right were able to print money.
All that's changed. I missed out by about 3 years. Stupidly, initially focussed on getting my own home - not an income earning asset. Then the world changed, and I'd missed out, along with every generation after me.
That's not healthy for society - and as said usually on here I'm considered somewhere further right than Thatcher economically.
Zolvaro said:
That's true if you exclude house prices, lots of people have generated a lot of wealth just by being born at the right time and riding the huge increases.
Again? Yawn really...those who was born before (us), did not have internet, easy jet and today's much more diverse job market. People who invests or buy assets (that they actually inhabit) might generate wealth. Sorry but people still arguing this is bad for society similar to 5 year old kid who does not want to accept "gravity" exists..
DonkeyApple said:
That's not how implementations work. The taxes tend to be asset and geolocation specific so you just change how the asset is held and move the wealth. It's why so many wealthy overseas owners of London property are renting at home but owning in the U.K. etc.
For example, you have a U.K. property where the net value is to be annually taxed. The solution is to therefore remove that net value by increasing the debt on the asset. You can go one step further and sell up to an SPV and rent it back which can work even better as it is also a vehicle for moving net income out of the U.K. when things like pension caps are in place.
As with all such taxation it doesn't target the people the proponents are priapismic over the thought of it targeting but is just a bill carried by the perfectly normal workers who are trapped at the level where options are few.
A good example being those who just bought normal houses, in normal streets using normal incomes and spent 30 years doing normal jobs to pay off that normal mortgage. The deliberate property asset inflation from 1997 to create a faux wealth euphoria and rampant consumer spending increase from borrowing against that faux wealth means that those completely normal people who didn't partake in the great 21st century shopathon and chattel consumption race but left that faux equity where it was would now be paying a huge annual tax uplift that isn't commensurate with their lifetime income, pension etc. Meanwhile, those who asset stripped themselves living someone else's lifestyle and are essentially renting the property they live in because they've extended the loan and duration so many times they'll never own it would be sitting pretty.
This is the equality of IHt as a wealth tax over living wealth taxes.
The spiking of council tax to bury an annual property wealth tax in it is quite interesting as it will force many pensioners to move but also push many emigrants to the SE to return to the cheaper regions as it would fundamentally be a tax on the SE. It would arguably create quite a potential change in the London centric nature of the service economy biased U.K. There are fair arguments on either side with regards to that. Afterall, the housing problem in the U.K. isn't really one of affordability but a combination of a failure of local authorities to enforce the construction of social/affordable housing and instead favouring the money being spent building a new club house or other municipal facility but primarily an employment issue where the majority of jobs are in the SE etc.
Those kind of people probably aren't resident for tax in the UK anyway and they are of course never caught by these things due to their mobility. The other 99.9% of normal people affected by this will not be able to gear their way out it.For example, you have a U.K. property where the net value is to be annually taxed. The solution is to therefore remove that net value by increasing the debt on the asset. You can go one step further and sell up to an SPV and rent it back which can work even better as it is also a vehicle for moving net income out of the U.K. when things like pension caps are in place.
As with all such taxation it doesn't target the people the proponents are priapismic over the thought of it targeting but is just a bill carried by the perfectly normal workers who are trapped at the level where options are few.
A good example being those who just bought normal houses, in normal streets using normal incomes and spent 30 years doing normal jobs to pay off that normal mortgage. The deliberate property asset inflation from 1997 to create a faux wealth euphoria and rampant consumer spending increase from borrowing against that faux wealth means that those completely normal people who didn't partake in the great 21st century shopathon and chattel consumption race but left that faux equity where it was would now be paying a huge annual tax uplift that isn't commensurate with their lifetime income, pension etc. Meanwhile, those who asset stripped themselves living someone else's lifestyle and are essentially renting the property they live in because they've extended the loan and duration so many times they'll never own it would be sitting pretty.
This is the equality of IHt as a wealth tax over living wealth taxes.
The spiking of council tax to bury an annual property wealth tax in it is quite interesting as it will force many pensioners to move but also push many emigrants to the SE to return to the cheaper regions as it would fundamentally be a tax on the SE. It would arguably create quite a potential change in the London centric nature of the service economy biased U.K. There are fair arguments on either side with regards to that. Afterall, the housing problem in the U.K. isn't really one of affordability but a combination of a failure of local authorities to enforce the construction of social/affordable housing and instead favouring the money being spent building a new club house or other municipal facility but primarily an employment issue where the majority of jobs are in the SE etc.
ooid said:
Zolvaro said:
That's true if you exclude house prices, lots of people have generated a lot of wealth just by being born at the right time and riding the huge increases.
Again? Yawn really...those who was born before (us), did not have internet, easy jet and today's much more diverse job market. People who invests or buy assets (that they actually inhabit) might generate wealth. Sorry but people still arguing this is bad for society similar to 5 year old kid who does not want to accept "gravity" exists..
ooid said:
Zolvaro said:
That's true if you exclude house prices, lots of people have generated a lot of wealth just by being born at the right time and riding the huge increases.
Again? Yawn really...those who was born before (us), did not have internet, easy jet and today's much more diverse job market. People who invests or buy assets (that they actually inhabit) might generate wealth. Sorry but people still arguing this is bad for society similar to 5 year old kid who does not want to accept "gravity" exists..
I'm saying the disconnect in how labour and wealth are taxed is bad for society. The chasm is so great on the middle classes.
Compare two people, one earning £80k in a job doing 40+ hours a week and one earning £80k from a BTL portfolio that self funded off riding a wave of perfect conditions (and very little 'investment' or risk) purely as a consequence of being the right age at the right time - the net income for them is wildly divergent. Is that right, or fair?
Sway said:
Zolvaro said:
ooid said:
Sway said:
Currently, there's a staggering glass ceiling between earning from your labour, and earning from your assets.
You generate those assets by taking risk, and using your labour. If assets generate profit, that's risk trade off, as it can also wipe out the entire investment.When you only rely on "labour", you exclude yourself from taking that risk and also the potential reward disappears.
If you create an environment where that potential of wealth generation by investments, disappear with heavy tax, than people won't have any incentive to take risk and there won't be any job to employ "labours"
Not a rocket science really.
For much of the asset owning class, the 'risk' was non existent. Financial regulation, asset prices, other historic factors mean people who happened to be born in a specific couple of decades and had an income when the conditions were right were able to print money.
All that's changed. I missed out by about 3 years. Stupidly, initially focussed on getting my own home - not an income earning asset. Then the world changed, and I'd missed out, along with every generation after me.
That's not healthy for society - and as said usually on here I'm considered somewhere further right than Thatcher economically.
We aren't going to get a sudden upward shift in growth. The Boomer working demographic has pretty much retired and the following generations are too small. These generations don't work the number of hours that the Boomer generation did. The working day is shorter as is the working week. We are an ex growth economy, whether that is a positive or a negative is for debate but there is no magical growth increase to cover off the liabilities so it comes down to levying taxes on assets potentially.
Sway said:
Compare two people, one earning £80k in a job doing 40+ hours a week and one earning £80k from a BTL portfolio that self funded off riding a wave of perfect conditions (and very little 'investment' or risk) purely as a consequence of being the right age at the right time - the net income for them is wildly divergent. Is that right, or fair?
Your understanding is fundamentally wrong. You would be surprised how many those investors actually employ people that earn more than 80k to manage their assets.
This riding perfect waves of BTL nonsense is just a 5 year old dream, and quite worrying TBH...
ooid said:
Your understanding is fundamentally wrong.
You would be surprised how many those investors actually employ people that earn more than 80k to manage their assets.
This riding perfect waves of BTL nonsense is just a 5 year old dream, and quite worrying TBH...
Yup. The BTL 'live for free' was mainly an investment scam that lazy suckers fell for and got rinsed. But for those who did create a successful business doing so via property opens the door to the 'property is theft' 'unearned income is evil' extremist mantra that is easy to sell into a core section of society. You would be surprised how many those investors actually employ people that earn more than 80k to manage their assets.
This riding perfect waves of BTL nonsense is just a 5 year old dream, and quite worrying TBH...
As an aside, the one intelligent thing the Conservatives did was to end the utter lunacy of the speculative BTL boom by forcing out the most leveraged monkeys. Just imagine the state of the housing and rental market today if they hadn't made those tax changes in 2011 and all those leveraged gamblers had hit 6% debt funding at the same time and the rampant capitulation that would have been contagious.
ooid said:
Your understanding is fundamentally wrong.
You would be surprised how many those investors actually employ people that earn more than 80k to manage their assets.
This riding perfect waves of BTL nonsense is just a 5 year old dream, and quite worrying TBH...
It's not quite nonsense.it happened. I know of one person who ended up with a nice buy to let portfolio with very little initial investment. He no longer works as the tax changes to rental income stopped it being worthwhile. He had a couple of worrying moments around 2008/9 when his mortgages came.up for renewal though.You would be surprised how many those investors actually employ people that earn more than 80k to manage their assets.
This riding perfect waves of BTL nonsense is just a 5 year old dream, and quite worrying TBH...
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