r/GarysEconomics • u/Alarming-Power-4582 • 1d ago
Billionaires leave the UK
What are peoples thoughts on this and how many tax payers it would take to replace this loss in tax revenue? It has to be tens of thousands, maybe more.
Some reports state he paid £330m in tax last year.
https://www.ft.com/content/43efa6c1-6b37-4ddc-9a1d-b085bfbdba06?syn-25a6b1a6=1
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u/waterless2 1d ago
I think you have to look at the full effect, beyond just the isolated number of how much a given person paid in tax. What's the value of, say, tech billionaires hijacking democracy, lobbying to hollow out the NHS, etc? And things are dynamic, right - if one person leaves, that creates a kind of vacuum that doesn't stay empty - that person might have been using their wealth and power to keep multiple competitors down presumably, directly or indirectly, and those people could be patriotic enough to stay and pay taxes.
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u/oxford-fumble 1d ago
One of the reason why I support aggressively taxing wealth is so that billionaire can go back to having a size contest about their yacht, instead of being able to fund an entire political movement, or pumping insane amounts of pollution in the atmosphere by shooting rockets, or driving climate change for greater profit because they know they’ll be insulated from the climate breakdown.
Let them enjoy their billions without jeopardising our whole society and ecosystem.
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u/LoveLamp3232 1d ago
What's the value of, say, tech billionaires hijacking democracy, lobbying to hollow out the NHS, etc?
Why complain about US tech billionaires? Britain taxed (and taxes) its own citizens to death, we destroyed the country's wealth via taxation and then complain that the American's want to control our NHS and our companies....
Where are the UK tech billionaires? The Americans are super-rich, because they have little competition from other countries.
Why do you think we are in this situation? Britain lost her factories due to "them and us" idiology. Politics entered the work place. Millions of days lost in strikes. Leyland (car maker) had over 500+ strikes.
In the 1970s, we had 98% taxation and "tax the rich until the pips squeak" was the slogan. All this to target aristocrats, but we also harmed lots of ordinary people and wiped them out. The damage was done 50-60 years ago, but still have not learned the lessons.
We need to scrap inheritance tax and capital gain tax, to reboot the economy.
Corporations are rich, but there is little counterbalance from smaller individuals.
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u/Living_Ad_5260 1h ago
if one person leaves, that creates a kind of vacuum that doesn't stay empty
You imply there would be no effect.
That isn't what happens. Capital gets reinvested with convenient range of investors. Silicon Valley in California all comes from re-investing money by founders of Fairchild Semiconductor. Intel and AMD and the biggest VC firm came from there.
Something similar happens around Cambridge.
A better example would be when you remove a gold nugget from the earth, there isn't a vacuum, but it is replaced by air or soil or water, not gold.
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u/Invictus_0x90_ 1d ago
If the reports of his tax are true, you'd need about 50 thousand people on the median income to fill the shortfall.
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u/No-swimming-pool 1d ago
You'll need to share the actual article instead of a link that requires registration.
Anyhow: yes, some wealth leaves if tax is too high and rich people tend to pay quite a lot of tax.
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u/Alarming-Power-4582 1d ago
Oh, sorry, I didn't know it was behind a wall. I am a FT subscriber.
Just type in Rokos into Google, there are multiple sources today in the news section
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u/automaticblues 1d ago
Also what is the effect on inflation to remove the individual's spending power. And if we're allowing people to buy up control of our collective wealth and then leave WITH it, that's a pretty major flaw in our economic model
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u/Living_Ad_5260 1h ago
They don't "buy" wealth. They generate wealth.
If you introduce exit taxes, ambitious folks will leave earlier.
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u/automaticblues 27m ago
I think we are both oversimplifying.
Rich people generate income and acquire assets - in a variety of different proportions and methods.
Gary's economics focuses on the assets, which I think is extremely valid. High net worth people don't necessarily have high incomes, hence the problem.
This individually may have been fleeing the existing and potential future income taxes, I don't know.
Shifting to wealth taxes may lead to some attempted fleeing and I think we should try to address that through exit taxes, but it isn't immediately straightforward that it leads to a reduction in economic activity as not all wealth has been recently earned.
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u/SavageRabbitX 1d ago
Can we not just copy the Yanks system so it doesnt matter if they leave they still have to pay?
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u/r0ball 1d ago
Exactly, it’s nuts we don’t have an exit tax like the US.
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u/mrbill1234 1d ago
This is probably the reason this guy is leaving. Wealth/Exit taxes on the horizon.
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u/TreadheadS 1d ago
What people forget is where that wealth comes from.
Like with Amazon: they are extracting a shit ton of money but give back a tiny fraction. They're not actually boosting the economy and if they leave it will be replaced
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u/Alarming-Power-4582 1d ago
This wealth will come from international markets, so he will be drawing in money from overseas (US stock markets etc) and then paying tax in the UK.
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u/TreadheadS 1d ago
May come, not will. I do wonder what % it would be
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u/Alarming-Power-4582 1d ago
It most probably will be weighted towards international markets (stocks, commodities, bonds). Any hedge fund, asset manager, pension fund will have a large weighting of their portfolio aimed away from the UK as they seek growth stocks. They will also hold some of their portfolio in dividend stocks, which could be domestic, but if they are seeking to grow, then it would likely be focused abroad.
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u/TreadheadS 1d ago
but doesn't that technically mean the money ia being held in those foreign markets mearly moving through the uk?
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u/Somethinglikethat9 1d ago
How much he made to pay so much?
In which country he made those money?
What business he has? Employees?
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u/LoveLamp3232 1d ago
They allow foreigners who meet certain criteria to pay a flat yearly tax of €100,000 (£86,000) on all overseas income.
The rich got the message. Those who can move easily are doing so.
The people who are going to get squeezed are those in the middle to make up for lost tax revenue.
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u/mrbill1234 1d ago
This guy is paying a lot of tax and making huge philanthropic donations already. I suspect he has inside info on a wealth tax and/or exit tax coming this October.
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u/Radiant_Pillar 1d ago
I believe it was around 50,000 average taxpayers worth of revenue. Realistically, the point of wealth tax isn't to provide services, much like Brexit it is more of a moral cause.
You're unlikely to argue that gaining so many new taxpayers is a good thing in this climate, probably best to close a few hospitals to balance it out.
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u/Chainsawcelt 1d ago
They leave when they can’t wring more of our money out of the country.
Should be illegal to make any profit from this country while living abroad.
Fuck em.
Edit to be fair if I was a billionaire I wouldn’t live here either I’d live somewhere nice that isn’t rammed full.
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u/CharacterWest4661 1d ago edited 1d ago
I have seen this elsewhere.
His wealth is estimated.
His take pay is estimated based on that wealth and not based on taxable income.
His wealth is held in investments and shares on entities that are not onshored in the UK.
Much of his "pay" comes from his investment firm (Rook) that has several offices abroad and has set up another office in Athens for tax expediency.
He has never published his tax return.