Comments by "looseycanon" (@looseycanon) on "Will the rich leave the UK?" video.

  1. nope. You're forgetting stuff here. A wealthy person can always limit or lower their tax rate. Say that I create an ltd. put all my assets into it, move into a tax haven and simply bill my company as a private contractor the entire profit the company makes. That is what literally until minimum corporate taxation had been agreed a few years ago was being done on corporate level and which country was the tax haven they've used? Flipping Ireland! No, taxing the righ doesn't work for other reason. It is self defeating. It's because the rich can simply consider fines and taxes as costs of doing business, turn around and bill their clients for the same amount. Options only grow, as you own more cash flow producing assets. Make no mistake, you can't dodge taxes simply by moving to other tax jurisdictions. You still have to file and pay tax in country of origin of income and then you can apply, whatever you've paid on tax in the source country against whatever tax obligation from this foreign income you'd have up to what you'd have to pay for this foreign income in accordance with local tax law, eg if you now lived in a country, that had lower tax rate than the one you've earned the money in, you'd pay 0 tax locally on this part of your income, assuming you've paid your tax abroad, which is by law your duty, otherwise fines. Let's have a look at one scenario, that illustrates two problems with taxing what is owned or proceeds from using what is owned to generate income. Say there was a landlord in Czechia and outright owned a smaller commieblock or had it mortgaged. In small itterations of these buildings, you have up to four flats per floor and they come with two to four floors on the smaller size. Say it would be the four story one. That's 16 flats total. Rents vary greatly, they easily range 8000 to 20000 CZK a month. Let's say, that this building would rent at 224 000 CZK a month (four sizes of flats, each bigger flat by 4000 CZK more expensive than the next smaller one across four floors). I found a bigger house, that sold for 7,1 million CZK but needed some work done (the one I found had over 50 flats). Let us assume, that an investor would have to pay double that to get the house on the rental market. ČSOB (a Czech bank) currently offers 11,2 mil mortgage (maximum they'd lend for such a house, the rest would have to come from investor's pockets) at some 54 000 CZK per month. At this point, it would make sense for the investor to hire a guy at 30000 CZK for management and technical maintenance and give some lady a part time job of 20 000 CZK for cleaning common grounds, each per month and 34% of salary as mandatory insurance that's some 67 000 CZK in labor, 121 000 CZK in the big recurring expenses. Property tax for dwellings (including rentals) is 3,5 CZK per meter squared and year times coefficient based on city size. Let us assume the building is 60 meters squared and is situated in Prague, which has the highest base coefficient of 4,5. That is 3780 CZK per year, or about 315 CZK a month. Let us also assume, that 10% of gross income would have to be kept for any incidentals and communal services like electricity, that's 22 400 CZK. Finally, you can apply up to 30% of your income as cost up to 600 000 CZK (if you chose to be lazy about it and not go for actual expenses), which leaves you with some 30 960 CZK a year in income tax, or 2580 CZK per month. If we now subtract these expenses, this leaves 77 705 CZK net cash flow per month to landlord. If the landlord were not taxed locally to the point, that they'd feel it necessary to optimize their tax burden, they would reinvest the money locally and create new products or businesses and thus contribute to local economy in a greater amount than just by packing the money, selling it on FOREX market for currency of their desire or buying something locally, they can flip in the market of their chosing. Meaning the income generating economy, that decided to tax the rich more, loses out on secondary generation of wealth, because the rich, in our case landlord, dcided to reinvest obtained proceeds from Czechia, UK or other high tax economy into one, that will not tax them as much and thus lowered their overall tax burden. This is even worse for Britain than for Czechia, because GBP, unlike CZK, is a globally accepted currency and the transmission method is the same for both, meaning it's easier to do there! This loss of new productivity thanks to unrealized reinvestment is the first problem and it causes next periods tax revenue to be lower than it would have been, if the tax were lower. The second problem lies in possible reaction of wealthy people to new taxation in terms of asset allocation within the economy itself. They could simply treat any and all taxes and fines as costs of doing business and these costs are always forwarded to the customer. Meaning the asset structure of these people would change. That's mass buying of agricultural land, housing, utilities... anything that is highly inflexible in terms of demand. In this kind of environment, the überrich set their demanded ROI, add to it all expenses and taxes, list that as asking price (become price leaders) and those, who have lower tax burden thanks to owning less, simply match price (become price followers), basically irrespective of the asking price, all/nearly all supply get's realized, because people have to live somewhere/commute to job/have electricity to hold down a job and maintain their own income. They simply won't compeet, because they have the same interest and loss/gain of individual client doesn't tip the balance for them (eg, they'll behave like a cartel without ever establishing one, meaning you can't fine them for it and even if you'll do, they'll just forward it to the customer in the long term). The demand inflexibility is the key here. This is why the proper way to solve problem of shrinking middle class and overall loss of purchasing power is not taxation, but rather denying the ability to corner key markets. I'm talking abolishing zoning, denying objections to new development, canceling environmental regulation, generally making entry into markets easier for new players (as to prop up supply), improving access to credit, encouraging and helping young entrepreneurs to set up businesses of their own, shifting taxation from earning money (whatever the way, be it ownership of something or labor) towards consumption based taxation (because that taxes all production factors and rewards living frugally). Because you if you'll look at dynamics of price changes, it's precisely the prices of ESSENTIALS, that are driving the cost of living crisis and thus shrinking the middle class, not necessarily stagnant wages. I'm talking rent and housing (self explanatory), energ and fuel (the green transition), transportation (parking fees and schemes), keeping up with your field (copyright and licensing, frequent changes to legislation).
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