Large scale income inequality cuts quality of life and eats away at the fabric of society. Look at the evidence here http://www.equalitytrust.org.uk/why . We should adopt income inequality as one of the key indicators of progress in our society and urgently enact measures to cut inequality (see http://www.equalitytrust.org.uk/why/remedies ). It cannot be fair for instance that Bristol's first billionaire, businessman Peter Hargreaves (pictured) who now has a staggering personal fortune of £1,020 million, has seen his fortune soar by £450m in just 12 months when so many are losing their jobs, having their pay cut, having public services cut.See this Post report on how A MIXTURE of Bristol's businessmen and celebrities made it onto this year's prestigious Sunday Times Rich List.
Also see this Post report on Peter Hargreaves
http://www.thisisbristol.co.uk/news/m-proud-Bristol-s-billionaire/article-3532105-detail/article.html
(If he has made an additional £450 million in 12 months and has a personal fortune of over £1 billion why does he say "When people ask me what have I done for this country, I tell them that I pay £10 million in taxes every year." ? Just a figure of speech? Or is this really the amount of tax he pays annually? £10 million is only 1% of his total reported financial wealth and only just over 2% of the £450 million he is reported to have seen his fortune soar by in the space of a single year!).
Chances are, that £450 million gain in wealth is probably due to gains in illiquid investments (e.g. shares, property). Such investments are not taxable until they are liquidated (i.e. sold), at which point they become liable to Capital Gains Tax. The state will get its hands on its cut in due course, either as and when he liquidates, or when he dies.
ReplyDeleteAttempting to tax illiquid assets would be quite a radical step, and would also require thinking about what the government should do when tax has been paid on an illiquid asset that turns out to be overvalued; refunds in subsequent year(s) until it regains its former value?
Assuming his "£10 million in taxes" claim is accurate, that would suggest he received about £20 million as income.
Heavily speculative Alex B, though you may be right on illiquid investments. If I know Mr Hargreaves he is set up to pay the minimum tax he possibly can within the law as a UK resident, both while alive and after his death. Its speculation again but I think your view that he paid 50% of his income in tax is very wide of the mark - his accountants would surely be better at their jobs than that?
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