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Increasing it's value by £29,900.
But you are a skint student and need a guitar. Are you will to pay the tax on the increase. How do you police such a tax you somehow have to keep track of everybodies assets and increases in values. Do you they a tax rebate if the value falls?
A lot of mobile assets will go off shore and we will never get the chance to see great art.
There will be to uncentive for small companies to grow and employ more people.
Houses will not be maintained to a high standard in fear of it's value increasing this out housing stock will diminish.
Of course a building company will not longer take the risk of building on the land as the asset value of land will increase.
Taxation on profit the only way to do it.
So you'd list your assets on your tax return every year? Only individual assets over a certain value, or total assets cumulatively over a certain value, or just all assets? And who would carry out the valuations?
It must be late because you are still not getting some fairly fundamental points. You are NOT paying tax on something you own, you are paying tax on the return on investment, the ROI. If you own something (house, shares, crème egg, guitar) and they don't go up in value, you have no ROI, so you have no wealth increase to pay tax on. That is a fundamental mistake you are making.
We have special rules already. Income tax was a special rule. Capital gains tax is a special rule. And using your example of a house, what are they going to do? Dismantle it brick by brick and take it with them? I don't think so. I also don't see a reduction in foreign investment in the housing market (which is what it would be if they moved overseas) to be a bad thing. Foreign investment in companies is a bit of a mixed blessing too if it is unbalanced.
Again, it is not taxed based on assets, it is tax based ROI or if you like, the INCOME from those assets. Hope that makes it clearing this morning![:) :)](/plugins/EmojiExtender/emoji/fb/1.gif)
As for the house generating wealth, of course it does. There is a return on the value of my asset (the house) and there is a cost to living in a house (rent). Just because the two match, and I don't have any formal agreement with myself doesn't change that. Thing of it as being like an opportunity cost if it is easier. When I moved into my house, I had a mortgage so it was costing me £650/m. Alternatively, I could have rented a house (say next door) for £700/m So by owning the house, it was generating £700/m in income, of which I was usng £650/m to pay my mortgage. The other £50 was a surplus, profit. Now, I have no mortgage and could rent out for say £900/m. So it is generating £900/m which covers my rent of the house. If I was to choose to live somewhere else, I could stll rent this out for £900/m and rent somewhere smaller for £600/m, for a surplus of £300/m (my rent is now only £600/m, but my asset, the house, is still generating £900/m).
Maybe you need to read my posts again, or my next one (well, the previous one to this). It is increase on wealth on the assets, or the ROI if you like. That is still income even if it is in a different form. If my shares go up in value over the year, my net worth is higher. the only way that can happen is if my income is higher than my expenditure.
Who carries out the valuation of your tax return now? When you fill it in, if you have to list any other income besides PAYE, who does that?
Yes, we are talking about high value stuff. I am not sure why you keep thinking that income and cash are not interchangeable. Sometimes it is easier than others, but they are. And again, you are making a false dilemma as I explained before (with the 300k house owner having to find £300, are you seriously suggesting that someone owning a £300k house mortgage free would have to sell their house over £300, or that this would be a widespread problem?). There are people who struggle to pay tax as it is. So if in a hypothetical situation, someone can't pay income tax, should we abolish that? That makes no sense at all.
We have a tax year. It really isn't that difficult. I have investments during that year, and they will generate a return, That return is taxed. Just like we do now.
We already pay a tax on increased value of a property. It's called stamp duty as the value of a property increases so does the cash value of stamp duty once the property is sold.
But as I said what happens when the value of an asset goes down? Do you get a tax refund.
If I had a small company that for what ever bizar reason had a massive growth year and being a responsible owner used the profits to hire more people. So now I need to personally pay a massive tax bill.
To afford that I then have to award myself a massive pay rise thus taking money out of the company.
This means I potentially have to let somebody go causing resentment amongst my employees who are me giving myself a massive pay rise at their cost. That means bad moral and the company not performing as well.
Now the increase in profit of the company would have already been taxed anyway.
All it will do is stifle growth and make anything of value worthless.
Tax is rightly placed on income.
This argument is total rubbish.
Some people would argue that you should be taxed on the proceeds of the sale of you domestic home. I think that's rubbish too. Most of us will paid outrageous compound interest over the life of the mortgage, so I think we all deserve to receive the gain on the house sale without being taxed.
ON anything else you pay capital gains tax, which agreably is coming down too.
For me, a fair solution (IMO) to taxation is very simple - a flat rate and a higher threshold. Everyone pays the same rate of tax on their earnings. That is a level bar. If you want to have more money in your pocket, the ball is in your court: do something about it.
As I said earlier, the underlying issue is that as a nation, we are resentful of wealth. To use the cliche, it really is a culture of envy.
And I see from this morning's news that my old chums at HMRC once again demonstrate that they've got no idea what's going on. And this time I have to ask myself that if they fail to follow up on the paltry amount of high earners that they do investigate, is there someone pulling the strings? I'm not a conspiracy theorist, but it makes me wonder.
http://www.bbc.co.uk/news/business-36044321
OK, I am tired of typing.
Some people will get it, some won't here are a couple of good reads about it though:
http://www.bloombergview.com/articles/2014-05-11/picketty-s-wealth-tax-isn-t-a-joke
https://newrepublic.com/article/117499/heres-what-we-know-about-thomas-pikettys-wealth-capital-tax
The rich could do more, but then so could the not-so-rich. And since it's the rich that are doing all the heavy lifting at the moment I think it's not unreasonable to let someone else shoulder more of the burden. As I said before, it's sad that people are judged on what they could contribute and not what they do contribute. Bill Gates has given billions to charity that he didn't have to - and yet folk still resent him for not giving whatever stuff he has left over.
I'm not a high earner but I live what I consider to be a very comfortable life with a lot of money left over at the end of the month. Of course, it's in my interest to pretend that I can barely scrape by but I know I'd be lying - and if I'm lying then so are other people in my situation.
Read the links, read the book. To me, if you think that you are paying tax on something just because you own it, you are still missing the point by a mile, but with all respect, I am not going to go into further.
And it wasn't meant as condensing, so sorry if it came across that way.![:) :)](/plugins/EmojiExtender/emoji/fb/1.gif)