• HelloThere@sh.itjust.works
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    1 year ago

    For some?! It’s literally everyone, the CGT bands are 10% and 20%, for non-property

    https://www.gov.uk/capital-gains-tax/rates

    Equalisation of CGT and Income tax is a no brainer. The argument has always been that CGT (and things like entrepreneur relief) should exist because of the risks involved, but given that both allow offsetting against costs and losses (and income tax doesn’t) it’s always been a bullshit argument which exists purely to preserve wealth.

    • killeronthecorner@lemmy.world
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      1 year ago

      It’s “for some” because if you’re willing to earn an unliveable pittance, you aren’t taxed very much if anything.

      In principle though, you are right.

    • Aux@lemmy.world
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      1 year ago

      Taxing capital gains will only dampen the economy. Instead, use this lower tax to improve your financial situation.

        • Aux@lemmy.world
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          1 year ago

          I don’t think there should be taxes at all. Not in a current form.

          • noodle@feddit.uk
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            1 year ago

            Hang on, just getting my Libertarianism bingo card ready…

            Ok, so are you a free man of the land or one of those who thinks we should be able to buy rocket launchers at Tesco?

            • Aux@lemmy.world
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              1 year ago

              Neither. Taxes should be nothing more than a subscription or an insurance. Taxes in the UK today are funneled straight into the pockets of Tory friends.

      • Astroturfed@lemmy.world
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        1 year ago

        Yes, because everyone has money to invest. So they should just make more money on their money and stop being poor. Why hasn’t a anyone ever thought of this. Just stop being poor.

        • Aux@lemmy.world
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          1 year ago

          Literally no one is forcing you to be poor, it’s your own choice. And yes, everyone can save up a bit and invest. And it WILL snowball over your life. Don’t be stupid.

  • teamonkey@lemm.ee
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    1 year ago

    Not sure why you need a study to confirm what is literally codified in tax law, but sure.

    • sadreality@kbin.social
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      1 year ago

      Which was designed that way on purpose…

      We work and pay for most everything while they collect rents with government support.

  • Treczoks@feddit.uk
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    1 year ago

    Is anyone surprised by this? The luxury travel and house renovations for the politicians are paid by those who live off those capital gains, not by those who have to work for their money.

  • AutoTL;DR@lemmings.worldB
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    1 year ago

    This is the best summary I could come up with:


    In a separate example that also emphasises the gap between the mainly older people who generate an income from property and shares and those who rely on employment, a person receiving £60,000 a year in the form of capital gains or dividends pays less tax than someone aged 16 to 64 in a job earning £35,000.

    The momentum behind calls for the equalisation of capital and employment tax rates has grown in recent years.

    The former Conservative chancellor Nigel Lawson set the rates of CGT at the same level as income tax in 1988, saying: “In principle, there is little economic difference between [earned] income and capital gains … And in so far as there is a difference, it is by no means clear why one should be taxed more heavily than the other.”

    The authors said the current system allowed for significant levels of avoidance by those with income from capital gains who were allowed to smooth the declaration of their income to make sure it fell under the tax threshold over a period of years.

    “Those who can manipulate the tax system in their favour tend to be those with high incomes or high levels of wealth, leaving a larger tax burden on younger people and those on lower incomes, further perpetuating inequalities between and within generations,” it added.

    The tax privileges granted to those with unearned income in the UK are also over- generous by European standards, the report said.


    The original article contains 630 words, the summary contains 243 words. Saved 61%. I’m a bot and I’m open source!

  • theinspectorst@kbin.social
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    1 year ago

    Capital gains tax discourages investment and innovation. Income tax discourages work. Pick your poison.

    You can raise some tax revenue by shifting the tax burden to ‘bad’ things instead of ‘good’ things - pollution, congestion, unhealthy foods, etc. But you can only go so far with these (at some point Pigouvian taxes start to become too successful…) and even then a lot of people flip out at having to pay fuel duty, congestion charges, etc.

    I mean, we do need to raise taxes somehow. It turns out voters expect quite a bit from the state.

      • theinspectorst@kbin.social
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        1 year ago

        That assumes they both have the same societal externalities - I suspect they don’t.

        I suspect there’s a good reason why even fairly left-wing societies (e.g. Sweden, France) tax income at a higher rate than capital gains.

          • theinspectorst@kbin.social
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            1 year ago

            No, it’s primarily to fund spending. But as a rule of thumb, once you’ve decided how much you’d like the state to spend on things, it makes sense to raise that amount of tax in the way that does the least harm.

            • C4d@lemmy.world
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              1 year ago

              Does it help to view it less to do with funding spending and more to do with reclaiming the money that the government has already spent?

        • C4d@lemmy.world
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          1 year ago

          Doesn’t that also depend on what kind of company has been invested in, and what the job generating the income actually is?

    • HelloThere@sh.itjust.works
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      1 year ago

      Yes tax is a disincentive in as much as it raises cost, but we are no where near the limits any maximial analysis has indicated.

      Also, given that losses can be offset, and structures like limited liability, mean that the financial risk to starting businesses are so small as to be almost non-existent. Literally £1.

      So yes, there are limits which tax does cause meaningful disencentives, but we aren’t close to those.

    • SokathHisEyesOpen@lemmy.ml
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      1 year ago

      The problem with sin tax is that they just demonize a new behavior or product whenever they want to raise taxes. It becomes a financial burden to be yourself, depending on the whims of society.

      • theinspectorst@kbin.social
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        1 year ago

        No. Pigouvian taxes are about putting a price on the social cost of antisocial activities - pollution, congestion, etc.

        If I close and seal all my doors and windows and then choose to pump CO2 and other harmful gases into my house, the cost of doing this is largely going to fall on me, and I can probably be trusted to be sensible about how much of this I do. But in the real world, there is no natural mechanism to force me to internalise the costs to the rest of you of pumping out carbon emissions into the atmosphere.

        It’s nothing to do with ‘sin’. Pigouvian taxes are about putting the societal price on antisocial behaviour so market forces can function.

        • SokathHisEyesOpen@lemmy.ml
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          1 year ago

          The problem is that they change the topics to tax more behaviors. It starts out as a carbon tax on big trucks, then they add a tobacco tax, then a vape tax, then an alcohol tax, then a bar tax, then a restaurant tax, then a soda tax, then a streaming video tax… Whenever they want more money they demonize a new behavior.

    • teamonkey@lemm.ee
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      1 year ago

      Capital gains tax discourages investment and innovation. Income tax discourages work

      Are either of those statements true? Does capital gains tax ACTUALLY discourage investment? Does income tax ACTUALLY discourage work?

      • EdanGrey@sh.itjust.works
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        1 year ago

        I’m an accountant and have clients regularly ask me how much tax they would have to pay for a certain investment before they make a decision. It absolutely dissuades some people.

        • teamonkey@lemm.ee
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          1 year ago

          Absolutely, a change to CGT may affect the risk-return profile of individual investments and might make some unpalatable. But it wouldn’t slow or stop investing altogether. One thing that has a bigger effect would be how much spare money people have to invest, how much they earn above their costs of living.

          People have a financial incentive to invest their money somewhere (stock market, bonds, businesses, property, interest-bearing bank account) because if they don’t, their money devalues. Economically speaking it doesn’t matter so much where, so long as money cycles around the country and doesn’t sit doing nothing - or leave (which is another issue with global investments). A change in CGT would have to be hugely disruptive to change that incentive.

      • theinspectorst@kbin.social
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        1 year ago

        This is pretty basic economics. Supply curves slope upwards - the higher the price people are offered for something, the more it people are willing to supply. It’s exceptionally intuitive but there’s reams of empirical evidence to support it if the concept isn’t obvious enough to you.

        • teamonkey@lemm.ee
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          1 year ago

          To start with I think we need to stop giving credence to bunkum theories that state that people are free to provide or withhold their services as they see fit. It’s not the case for the majority of people.

          Most people cannot afford not to work, they have no choice until they are financially secure enough, which few are. Either that or they physically can’t work, but in most cases they MUST work to pay rent, eat, survive. Even if you’re specialised in any job, when unemployed it’s only a matter of weeks before you need to pick any job, whatever you can get. Raising or lowering income tax will not affect that, only the amount of money you have when employed.

          Even if you don’t HAVE to work, the financial incentive is always to work, because it gets you more money, which is the promise of a better time. Changing income tax doesn’t affect that either, just the rate at which you accumulate wealth, but if you don’t have to work at least you have a choice not to.

          What affects employment more than income tax? Employment taxes. Because a business finding it cheaper to employ more staff… employs more staff. That financial incentive again, and a completely different set of levers. You can increase income tax and decrease employment tax, or both together, whatever. Independent.

          You know what else can take people out of the workforce? Reducing CGT. It allows people to retire earlier or live off their investments. Changes the threshold of where your financial incentive to work balances your body’s ability to can. Whether that’s good or bad depends on your point of view.

          On the subject of CGT, again, look at where the financial incentive lies. At what CGT threshold does it become more profitable not to invest in some vehicle, even risk-free-rate bonds, rather than stuffing a mattress? CGT only affects realisation of assets, so with a rate increase you would expect an increase in longer term investments, you might see people delaying retirement. It’s unlikely to affect actual investment, really only the amount of ready cash people have affects that. Lower income tax/higher CGT may actually increase investment in that case (though it’ll probably be mostly invested in other countries through SP500 or global trackers, so maybe not a good thing for the country).