r/GarysEconomics

I’m a West Ham Fan.

West Ham need to win on Sunday 24th and Tottenham Hot Spurs to lose, for us, to avoid relegation.

So as I happened across ‘Saving Private Ryan’ on BBC1 last night I came upon this scene. Look at the motorcycle’s number plate:

WH-152412

West Ham : 1 (more) win on (5) May 24th.

And the relevance of 12?

That’s Everton current position who play Spurs on Sunday.

And no it’s not f***ing AI.

I can hardly work my new toaster let alone understand that crap.

#COYI

Could someone please direct me to where there is some actual figures on how much a wealth tax could feasibly bring in? I know some work from Gabrielle Zucmans been done on the French tax but even then it’s not like turn around figures (he proposes over 20bn optimistically from people with net worths over 100m)

I’ve done some crappy/rough napkin maths on the Uk but to my knowledge the amount that would actually be brought in is pretty minor - 2% of all 157 billionaires wealth equates to 13bn~ - seems like a lot but given the yearly income tax rates for the treasury (1.2-1.3tr) seems a lot smaller - & the cost of general change (e.g nationalising water would cost roughly 100bn) it’s quite minor in the grand scheme of things

I am more skeptical than previously having now understood international OECD tax agreements that have come into play this year/2015 - pillar 1 around capital mobility of where services are taxes (closing google’s loopholes) introduced via the gLobe system where companies need to legally report revenues in their national jurisdiction - & pillar 2 introducing a minimum 15% tax globally for corporations with various different stop mechanisms - & effectively reducing the use of tax havens. But this still is not bringing in the numbers I would have thought (from academic papers it seems to be forecasting bringing in 240bn - which whilst is significant it’s not when you think about its global distribution.)

My first worry is about the scale of revenue that can be collected being significantly lower than what is promised & the implications for the level of change which can be made. & my second worry is that nationally I’m not sure how this can be enforced given all the evidence points towards international cooperation being the only way to actually enforce wealth tax/legal changes

Also please challenge me on this if there is a perspective I’m not seeing - my heart wants to be in this!

I’ve been getting adverts with Gary promoting a couple of different shares to invest in saying that they are under valued or have great prospect to grow. I’m not convinced they’re real, something feels off about them and I suspect they may be AI. Has anyone else come across them?

Where he is correct:

• Our modern financial system heavily rewards the rich for passively hoarding capital rather than investing it in higher-risk, productive industries.
• Because it is low-risk and highly profitable, the ultra-rich use this hoarded wealth to buy up existing, finite physical assets like housing and land.
• This aggressive speculative buying drives property and asset prices through the roof, forcing the working class to spend all their income on rent and survival.
• A Wealth Tax correctly identifies this loop and aims to stop it by seizing that hoarded cash to redistribute it back to the public.
• Once the working class receives this cash, their disposable income rises, naturally increasing the societal demand for better housing, more energy, and goods.

HOWEVER!!!

• The UK's administrative "vetocracy" (bloated red tape, NIMBYs, and 1970s planning laws) makes it legally and financially impossible to build new houses or energy grids.
• Because the system blocks new production, you suddenly have a population with more money chasing the exact same fixed amount of scarce housing and resources.
• Basic economics dictates that when more money chases a fixed and unyielding supply of goods, the prices of those goods simply explode upward.
• Consequently, pure wealth redistribution without supply-side production triggers immediate inflation, vaporizing the new purchasing power of the working class.
• THOSE REDISTRIBUTED TAXES GO STRAIGHT BACK TO THE RICH.

This even continues to new wealth creation in regular businesses and just trying to elevate yourself as a regular person.

• If you attempt to build wealth from zero, your only initial resource is your labor, which is immediately penalized by aggressive PAYE and National Insurance deductions before the money even reaches your bank account.
• Because tax thresholds have been deliberately frozen, the traditional advice to simply "work harder" is a mathematical trap; taking extra shifts or a second job pushes you into higher tax bands, yielding diminishing returns on your actual sweat and time.
• Stripped of your gross income, you are then forced into a punitive rental economy, systematically draining your remaining liquidity to pay off a landlord's mortgage and ensuring you can never accumulate seed capital.
• Without personal cash reserves, attempting to start a business forces you into a punitive debt economy, requiring you to take on high-interest commercial or personal loans where the financial sector captures your future growth.
• Even if you manage to launch the company, the state instantly hits you with punitive upfront costs, such as fixed employer National Insurance and the highest commercial property taxes in the developed world before you have made a single penny of profit.
• Conversely, those who already hold significant wealth bypass this entire gauntlet; they do not rely on PAYE, but instead fund new ventures by borrowing cheaply against their existing assets (which is completely tax-free).
• When the wealthy do realise their profits, they are shielded by Capital Gains tax rates that are vastly lower than the income taxes levied on the working class, while utilizing corporate structures to legally write off their expenses and losses.

Meaning...

• "Taxing the Hoarders" is a broken mechanism unless you simultaneously smash the bureaucracy to "Back the Builders" and flood the market with cheap, abundant supply.
• The modern economy operates exactly as designed: it heavily taxes the wages, efforts, and ambitions of the middle class to prevent them from becoming asset owners, while providing a frictionless, subsidized playground for those who already own the assets to acquire more.
• The economy hasn't meaningfully grown in years because we engineered a system where it is vastly safer and more profitable for the rich to hoard existing assets and charge rent, rather than take the risk of building anything new.

In Conclusion.

Tax the Rich Only Works If our entire system also supports wealth, value creation, getting costs of services to the lowest prices (energy, travel, water, admin) and the ability for the poorest to actually escape the rental economy.

If the state causes inflation by injecting money into the economy and devaluing the currency we hold, do billionaires conversely drive deflation when they hoard wealth? By pulling money out of circulation, do they effectively boost the purchasing power of the cash left in our pockets?

The City of London. Learn about the second government of the UK and the malign influence it has had over our politics for decades. When the young generations truly wake up to the role the City has had in making living conditions materially worse in this country, you can only hope there'll be hell to pay.

You can learn more in:

Treasure Islands by Nicholas Shaxson and The Finance Curse by the same author.

There is a good documentary called The Spider's Web https://www.youtube.com/watch?v=np_ylvc8Zj8&t=24s

So, Gary is always going on about how we should tax wealth not work, and that people who own assets should be forced to pay their fair share instead of continuing to hoard and increase their wealth. Well, Australia is doing just that. The Australian government recently announced a new proposal to end the current 50% capital gains tax discount, and replace it with a 30% minimum tax on capital gains. This was done to make taxation fairer by ensuring that people pay just as much tax on their capital gains as they do on their income from work, which in theory should help level the playing field between those who work for a living and those who simply profit off of stocks.

However, if you head over to r/AusFinance and other subreddits, there is an overwhelmingly negative response to this new policy. What do you think of this? it seems like getting rid of capital gains tax discounts is exactly the type of policy that Gary has been advocating for. And yet when it actually happens, it's met with a huge amount of backlash and outrage not only from the wealthy, but also from young, working-class people who have aspirations about investing their hard-earned savings into the stock market. Even Gary himself hasn't discussed or celebrated this news, despite the fact that he previously traveled to Australia for the sole purpose of promoting wealth taxes. So do you support this new capital gains tax? Why or why not?

I’ve seen Buffett make arguments that sound very close to Gary’s broader point: that the wealthy and large companies should pay more/fairer tax.

Has Gary ever referenced Buffett on this? If not, why do people think that is?

I’m not trying to attack him, but I’m starting to notice a pattern where similar arguments from well-known billionaires don’t seem to get brought into the discussion. Curious whether others have noticed this too, or whether I’m missing something.