In the Interest of Fairness and Balance...

I've been looking at more left leaning sites recently. On YouTube I've been watching videos from Novara Media the left leaning organisation.

Some of their opinions and guests I can completely dismiss as fruit-loops, but they've just had Gary Stevenson (From the Gary's Economics YouTube channel) on and he talks a lot of sense. An ex-city trader, he has made a ton of money betting on the collapse of the economy.

I think by now it's clear that the UK is in decline. High Taxes, reduced services (although I have some thoughts on that) and just a general malaise economically.

The reduced services bit could be improved by government getting out of things it shouldn't be involved in. For instance the hate speech laws and protection of people and prosecutions for hurty words.  The government have no business getting involved in being people's parent. It's not there to stop people being offended. That just ties up resources for no good reason. Government shouldn't care if you get offended by someone's opinion and should not get involved.

But back to Gary. He's spent most of his life betting on the decline of the economy. He's made millions.

And a lot of what he says makes sense. It's very similar to what I've been saying. The eye-watering amounts of debt for instance and the government's liabilities for payment of interest. 

I've glossed over his ides on the transfer of wealth and assets from the poor to the rich. To some extent i sympathise because it's not just the oppressor/oppressed diatribe we get from the left, but luckily my eyes didn't glaze over entirely..

Gary get's hung up about who owns the debt. He lies the blame at the rich, which to some extent is true but then he spurs off blaming the rich for buying up resources like housing and then renting them out to the poor at high rents. Which is true. But Government debt is a peripheral to that. Instead we are looking at States investing in Government bonds and as I've said before, those states not only buy that debt, they use that debt to exert influence. The only nations that can invest that sort of money are cash-rich ones, like the oil-producing states of the Middle-East, or China. States that do not have the interests of Britain at heart or certainly don't care enough about us to just take the interest and be quiet. I expect there to be some extortion from these states.

The Middle-Eastern states I've already talked about and how they use their influence to change the UK. Not only by investing in Mosques and supplying extremist Imams spouting anti-Western rhetoric, but by buying our debt or our businesses and using that leverage to nudge the government in a certain direction. Extortion, essentially.

Gary blames the rich elite class, and to some extent I agree. The rich have turned their back on altruism and there's now a class of rich that are all about how much money they can accrue. Not actual liquid cash, you understand. We're not talking about Scrooge McDuck style piles of cash, because that's too risky. 

No, we're talking about property portfolios, using holding companies to maximise profits, carefully skirting round the legal and tax issues owning a large investment can raise.

Gary's answer is tax the rich, but that's an over-simplification. Just how do you tax them? How do you distinguish between the rich person holding assets using a public limited company, and a "legitimate" PLC doing legitimate business stuff?

Because it's easy to identify someone owning a few properties as buy-to-let properties, or just plain owning the properties to let them out. But as soon as you start to tax multiple property private ownership, then they'll just wrap them up in a PLC and then you're into the business tax regime rather than the private individual tax regime.

So how do you tax the Rich?

It's a difficult one to answer, because you have to involve legitimate businesses. Do you increase tax on profits? Do you increase tax on dividends? How do you identify a private individual running a property empire if they set up a PLC, the PLC owns the property and the board is made up of the kids and the dog and they all receive dividends from the PLC? 

I've no simple answer unfortunately and it's one that the left really needs to address.

I'd certainly like inheritance tax to be abolished, or reviewed. Now, thanks to government policy, even ex-council houses could be subject to inheritance tax. That's not what it should be used for. It should not be a stick to beat the poor at their lowest point. These days a million pound house can be owned by someone who is poor. But there's the rub: they're not technically rich. They are poor because they are not leveraging the value of the asset they own. It's their home and they wouldn't take the risk of losing it. Where a rich person would get advice, probably have a few properties and be maximising their potential revenue generation. That, I guess is the difference between rich and poor: the rich make money and assets work for them, or at least have enough to mitigate any risk from doing so. 

Certainly I have a lot of sympathy with Gary's viewpoint, I'm just not convinced that the "cure" to excessive personal wealth is so simple.

Certainly we need to dissuade people from having second homes or more and leaving them empty. That's a criminal act that should be heavily punished by government. It's not a jealousy thing either. It's a practical solution to freeing up housing stock.

The rich as I said are rich enough to mitigate risk (and tax burdens). The question is can you leverage that to level the playing field? Can you make being rich more risky to ever the odds?

Also it would be a good idea to start looking at companies that hold property and keep it deliberately empty for long periods. Along with companies that "LandBank", holding onto land for development.

I've also said we need to stop money flowing outside the UK. If you earn it in the UK, you pay tax in the UK. So end the Non-Dom tax breaks and the ability to offshore tax responsibilities. Also legislation needs to be created by government to State that when a company transacts with a UK citizen and receives payment from a UK bank account, that tax should be paid on that transaction in the UK, irrespective of where the server is, or where the head office of the company supplying the goods or services is located. 

We need to catch up with the digital age and make online companies repair the hole in the exchequer they have created by decimating the high street. 

Also a high-street brand should not be on the high street one day, go bust the next day and then a month later start trading online with a regime that pays hardly any UK tax. 

There are ways to tax the rich, but it's not as easy as the left want to make out unfortunately.

I shall watch more of Gary, he sounds like a top bloke. Obviously politically we might be different, but not that far apart to be honest. For instance I do not think that labour will be our saviours.

For instance immigration. I do understand that mass immigration is a symptom of the system rather than the cause of all ills. Yes, immigration does affect access to services and availability of houses and rent prices, but it's not the main issue. It's more to do with corporations not investing in our population. Instead of training people they want to bring in people from other countries that are trained. It's cheaper than training someone that already lives here. They can generally pay the immigrant a lot less too.

The relentless drive to maximise profits is to blame. Buy low and sell high. Pay as low as possible and sell as obscenely high as you can get away with. 

The problem is unfettered capitalism, the worst excess of corporate greed, where global corporations are now big enough to bully governments, or at least government departments like on tax. They even have the power to manipulate public opinion against governments.

How you limit those excesses I have no idea. I can't imagine a mechanism that would reduce the greed of the global corporations, or make excessive profits er, unprofitable.