Will the rich leave the UK?

welcome back to Gary's economics today we're going to talk about if you tax the rich don't leave we have done a video on this channel about whether it's possible to tax the rich before uh I did it about a year ago I went and watched it um before I did this video um and the reason I watched it is because we have been getting tons and tons and tons of comments which is you can't text the rich they leave you can't text Rich they leave it is by far the most popular comment on the channel it's the most frequent criticism to whether you should tax the rich um so I didn't want to do a video because we've already done one before but I went and checked and it's only got 10,000 views and obviously since then the channel is grown a lot we've got a lot of new people this is clearly the number one concern about why we cannot tax the rich so I wanted to do a video deal with it headon and explain really really clearly why we can tax the rich okay so this argu that we cannot tax the rich because they'll leave is basically based on a confusion between rich people who are rich because they have a good job and they make a lot of money from their work and rich people who are rich because they own a lot of Assets Now Ordinary People don't have great visibility with regards to extremely wealthy families families who have asset Holdings of 10 million 100 million1 billion so all people when they think of the rich they tend to think of people with good jobs doctors lawyers Bankers businessmen people who might earn 1002 200 maybe even more ,000 a year um and these people if you tax them in many cases they can leave um I was a Trader for a long time I made a lot of money when I was doing that um I paid a lot of tax but if I wondered I could have gone to work in most famously sing Singapore which has lower tax rate so it's it's possible for people who have very high incomes from their work to leave because they get their money from their work and they can they can work anywhere in a high tax country or a low tax country when I talk about taxing the rich I'm not talking about these people and I want to make it very clear from the start I've said it a lot of times on the channel but I think some people still don't recognize it when I talk about taxing the rich this is not about highly paid workers this is about individuals and Families that have tens or hundreds of millions of pounds or dollars in assets maybe even billions of pounds or dollars in assets these are the people are under tax now when we consider a billionaire or somebody worth let's say a billion pound or 100 million pound they do not get their income from working in the vast majority of cases if you are say richy sunuk who's worth 700 million pounds he owns assets he owns assets this is he owns buildings he owns properties he he owns companies he owns debt for example he owns your mortgage he owns the government debt this is what rich people own they get their income as what is considered passive income they get it whether they work or not because it doesn't come from the work it comes from their assets and what this means is it comes essentially from you they own your house they own the supermarket you shop in they own the fields that produce the food that you eat they own the natural resources which produce the electricity you use they own the office block that you work in they own your mortgage they own the government debt so when you pay tax they goes to them if you don't understand this concept of what wealth is and what wealth ownership is I really recommend you watch the video on the channel called what is wealth we um also I think we're going to put this out the week after we do a new video explaining really clearly what wealth is so this is the difference between somebody who works for their money and somebody who owns for their money working people can leave and another country but if I own a billion pound of UK government bonds or a billion pounds of UK property regardless of whether I live in the country or not that money is coming from you when you pay your rent and you when you pay your taxes rich people who are rich rich through asset ownership asset holding they get their money from you so this is the key thing to understand right I'm not talking about taxing working people I'm talking about the people that own the assets they own the assets of this country they own British assets they own the land they own the buildings they own the companies they own the debt they own British assets so let's talk about these people can they leave so at the moment we have a tax system in this country which is common in Western countries it's the same in Western Europe it's the same in the US which taxes you based on where you live what that means is I could go into France if I was a billionaire and buy5 billion EUR worth of French property of French businesses and then I could leave I could move to the Cayman Islands and I could take loads of French rent payments French mortgage payments um money from French customers and basically pay no tax in it because even though I own half of France or half of Britain or half of the US I don't live in those countries so I don't pay tax and this is is basically um a completely absurd tax system which we don't have to use not every country does this China doesn't allow you to own half of China and not pay any tax on the money that you extract from Chinese people because you don't live in China other countries don't allow this um we do allow this but but we don't have to the basic fact is if you own a ton of British assets be that companies that sell to British consumers British homes British debt British land British natural resources your money comes from Britain and that that would be the same if I was talking about the us if I was talking about Australia if I was talking about Germany or France you exist in a country that has real assets those assets are owned by somebody and whenever you use those assets you pay that person and the money comes from you so this is the the big reason why the very richest people in society are actually the easiest technically to tax is because if I'm a teacher or a lawyer or a doctor I can go to Dubai I can go to Singapore and I can work in those countries and I generate the money from my work if I'm rich and I own your country whether I leave or not my money still comes from you and it's I'm the least mobile person in the world from a tax perspective because whereas a worker can move and work in another country the owners of the assets they own your country and of course your country can decide whether to tax them or not so I think once you understand this difference that taxing the rich when I use it is not about taxing working people it's about taxing the owners of the wealth I think what you can recognize from that is the fundamental question we are dealing with here is who owns your country who owns the wealth of your country look around you in the place that you live look around you in the country that you live look at all of the land look at all of the buildings look at all of the property look at all of the productive buildings and machinery and all the natural resources somebody owns that who do you want to own it we are in a state of transition in the west where we used to have a large middle class that owned a lot of the wealth they're losing that through increased debt and through decreased direct ownership of things like property things like the stock market which are increasingly being owned by wealthy people if you allow the very rich to own the wealth in your country claim that they don't live in your country so that they don't pay tax on your country despite the fact that all of the people in your country are paying their rent are paying their mortgages are paying company profits to these people it is inevitable that they will accumulate more and more of your country and eventually you will you will lose your middle class and this is this is the reason that what we everything on this channel and I think there's a kind of absurd thing that happens here where I say tax the rich to protect the workers and very very rich people pay a lot of money to pay a lot of people to tell you Gary wants to tax you the reality is unless you're a very rich person if you are part of the middle class or even poorer than the middle class in your country you are losing your assets to the rich and the rich are not paying tax and I really think we need to start viewing tax really in the same way that we view an army the reason that countries have armies is to stop foreign Invaders from coming in and taking all of the land and taking all of the assets that is happening it is happening now the middle class are losing their assets to the rich we can see that in decreased home ownership rates in more increased ownership of the stock market in much higher levels of debt from ordin families and from governments to the rich you are losing your assets you are losing your assets and you are competing with people like rishy sunak who have passive incomes of a million pounds a week and there is no way for you to compete with them what they own is your assets they own your house they own the building you work in they own the building you shoping they own the bars they own the restaurants they own the natural resources all of those things exist in your country they exist in your country and you can tax them we don't tax them because in many cases we have a very very wealthy political class that is funded by them and just simply told you that we can't but we can we can China does it lots of countries done it in the past but at the moment We have basically I would argue there's a degree of political capture where the very rich not only influence the politicians to not tax them but to tax you instead but they also influence the media and the economists to tell you that it's impossible to tax them listen these guys are not magicians they can leave the country the assets are here we don't need them we need their assets it's about ownership of the assets it's about ownership of the country you live in now I want to be clear when I say that it's possible to tax them that is 100% true because we don't need these are people who who don't work we don't need their labor what we need is their assets their ass the assets exist in in this country or in the country in the west where we live we can tax them that doesn't mean it's going to be easy I don't think it's easy I think it's going to be really really hard um but I don't do it because it's easy I do it because I think it's important that my country and your country whichever country is doesn't collapse into desperate poverty and uh the only way to protect the middle class and the poor from the rich is taxation just like the only way to protect you from foreign armies is an army uh we don't have the Taxation and we are moving back towards being a very unequal very high poverty Society um I campaign for taxation of the rich not because it is easy but because it is essential and uh we are going to move into a period now where we have a change of government in this country and if I'm totally honest I think that the previous government you know the Prime Minister was worth 700 million David Cameron made1 million P when a year of leaving office they all went to the most elite private schools and come from wealthy families I think that that government was basically aggressively protecting the class interest of the Rich and um I don't think they ever would have given us what we need in terms of stopping the increases in inequality but we're going to move now into a period of having a government which rather than saying we don't want to stop inquality increasing they will be saying it would be nice to stop inequality increasing but it's not practical or it's not sensible or it's too difficult or it's not worth the effort personally I think it is worth the effort to stop your societies from collapsing into desperate poverty um and it's not easy but it's essential and I think sometimes it's important for people to try to do things that are difficult because they are essential to stop the collapses of their societies and previous generations did things like that and it is through the work of those previous generations that I live in a country which for a long time provided decent living standards and housing and education and Healthcare to Ordinary People that's not normal in most of the world ordinary people don't get good quality housing and education and health care and Leisure Time but we had it here in the UK and we had it in the US and in Europe and Australia and Japan for 50 60 years because people fought for it despite the fact that before they had it it had never happened before in one Society um taxing the rich will be very very difficult it's possible these people are not magicians these people are not gandal they can't magic themselves out of the country and disappear all of the wealth out of the country the wealth is here it is the wealth of our countries but if we allow it to be held by a small group of extremely wealthy families who pretend they live in the Cayman Islands and pay no tax then we and our kids and our grandkids will live in poverty so it's difficult but it's possible I want to do it I'm going to keep campaigning for it and I hope you support us on this channel this is the big question we get asked all the time can we tax the rich okay it's not about working people it's about the people who are holding our assets and stealing our countries the assets are here the wealth is here we can tax it thank you

Channel: Garys Economics

Views: 211,166

Keywords: Wealth Inequality, Enough is Enough, Tax Wealth Not Work, Economics of Covid, Rich get Richer, Poor get Poorer, Economics Explained, Tax the Rich, End Austerity, Billionaire, Poverty

Id: luobN4xGOdA

Length: 14min 46sec (886 seconds)

Published: Sun Jul 07 2024