Legal Govt Theft : coming to a place near you.

[sishya]

I recently saw this in Mish's blog and was surprised that such a plan to increase capital gains Tax to 50%(from 18%) is being planned in UK.

- I think this will disproportionately hit Middle class
- The wealthy will be able to do a Capital Gains 1031 exchange, other tax means and escape taxation.

If this is enacted and if it is not back dated, this will surely cause a stock market crash.
This can also be classified as legalized theft because the profit will not be indexed to inflation. If a man buys a property at say $60,000 and sells to downsize it at retirement time for $300,000, he/she will have to give 50% of the profit(without inflation adjustment) to Govt.

Combining this with Inhereitance tax, I think the whole purpose of providing
loans is to make people take on debt and Banks will be able to collect a
certain portion of an Individual's wealth and earnings, Just like the Money
lenders if old days. One difference, in the old days when the borrower defaults, the Money lender lost some money, but nowadays Govts just buy the loans from the Bank and transfer risk to the public.There is just no escape.


Based on all these it is extremely difficult to escape Govt extreme taxation.
Many centuries ago Indians also had the same problem where Mughal emperors
used to tax property after death at high rate. To escape, this people hid their wealth via Gold. Love of Gold in India may have been even before this.
Traditional sacred days and occassions also were chosen to buy Gold to make it more
religious and passed on as generational knowledge to this day.

SIDE NOTE :
Had a conversation with my father who was a day laborer when he was young, bending iron bars for concrete roof.
- Around 1972 he paid Rs. 180 for 8 gms(1 sovereign) of 22K Gold when his daily wage was Rs.3
ie. 1 sovereign can be bought with 60 days of labour.
- Flash forward now- a day laborer earns R.300 per day. and the price of 1 sovereign is Rs.14,450
ie it takes approx 50 days of labor to buy a sovereign.

So Gold has kept it's value even after 40 years.


http://www.telegraph.co.uk/finance/f...investors.html

Higher taxes for a million as George Osborne's emergency Budget hits investors

More than a million people could be dragged into paying capital gains tax after George Osborne confirmed that he would use his emergency Budget to hit investors.


The Chancellor is to increase duty on capital gains even though the plan was not included in the Conservatives’ election manifesto.




CGT on “non-business assets”, including second homes, buy-to-let properties and shares, could rise from the current 18 per cent flat rate to a top rate of 40 or even 50 per cent, to fall in line with the higher rates of income tax.



The move could double tax bills for hundreds of thousands of investors and has been denounced as “legalised theft”. There has been speculation that the changes may be backdated to stop a “fire sale” of second homes and other assets.



The Liberal Democrats also want the tax to kick in below the current starting level of a £10,100 profit on any investment income. A threshold of £2,000 has been suggested. Deloitte, the accountancy firm, has estimated that that would mean the number of investors forced to pay CGT each year quadrupling to about a million.



It is estimated that 250,000 families own a second home and that there are one million buy-to-let properties. One in six families, a total of 3.75 million people, also own shares.
If the threshold for capital gains eligibility were lowered, it would drag thousands more middle-class investors into tax levels previously designed for much higher earners.



David Cameron has been warned that the decision to raise CGT would be particularly unwelcome for core Conservative supporters, who were unaware when they voted Tory that they would end up with a significant bill on their investments.



Middle-class families have complained that they are effectively paying the price for the Lib Dem proposal to reduce income tax for low earners, which was adopted as part of the coalition agreement between the two parties.



Mr Osborne insisted that the CGT increase was necessary in order to crack down on income tax avoidance, saying that there was an “enormous amount of income shifting”.





He claimed people were seeking to avoid paying higher-rate income taxes by moving their money into investments that currently attract the lower capital gains tax.
Asked why CGT was rising when the plan had not been included in the Tory manifesto, he said: “I think it would have been pretty clear for anyone coming into office that there was a substantial problem with capital gains tax and avoidance of income tax.”
But critics pointed out that hundreds of thousands of ordinary investors would be dragged into paying the new rate as well as those seeking to dodge income tax.
These include middle-class families, who would also be hit by the coalition’s decision to strip them of child tax credits, and those frustrated by the ditching of the promise to raise the inheritance tax threshold to £1 million.



Pensioners with small share portfolios would also be badly affected by the increase. Figures released by the insurance company Aviva yesterday showed that 10 per cent of people over the age of 55 have a second home.
Bill Dodwell, the head of tax policy at Deloitte, said: “It affects wealthy people, for sure. But it is more likely to affect older people in the second half of their life.
“Many older people hope to have savings for their retirement, which they might want to invest in shares.”





Conservative insiders said that pensioners would be compensated by the raising of the income tax threshold.
Lord Forsyth, the former Tory Cabinet minister who headed a tax reform commission for the party, condemned the plans.
He told the BBC: “If it [CGT] is increased to 50 per cent this will have a very devastating effect on, for example, people who have bought buy-to-let properties as part of their pension investments. At 50 per cent it is simply too high.”
Around a quarter of a million buy-to-let and holiday homes were bought last year.
David Salusbury, the chairman of the National Landlords Association, said the CGT increase would be disastrous for the buy-to-let market.
He added that it would “act as a barrier to further investment in residential property just at a time when there is an urgent need for more housing”.





Mark Dampier, from Hargreaves Lansdown, the independent financial advisers, said taxing capital gains was profoundly un-Conservative, because it punished risk-taking.
Mike Warburton, the lead tax partner at Grant Thornton, who has previously advised the Tories, said: “I am not surprised at all that many Conservative voters are upset.
“You don’t have to be wealthy to pay capital gains. If you have a second property, which you have inherited or held for a long time, the only way you realise any profit is when you sell.”

[Master Shake]

Re: Legal Govt Theft : coming to a place near you.

All your wealth are belong to us.

Except of course, if you are really wealthy and well-connected.

[medved]

Re: Legal Govt Theft : coming to a place near you.

I recently saw this in Mish's blog and was surprised that such a plan to increase capital gains Tax to 50%(from 18%) is being planned in UK.

- I think this will disproportionately hit Middle class
- The wealthy will be able to do a Capital Gains 1031 exchange, other tax means and escape taxation.

Here is the answer to all the gold confiscation questions.

If you are a middle class person that had enough wisdom to invest in gold, you will have some serious gains in a few years. The gov't will tax you at the regular 50%, and, I am sure, when gold reaches the bubble stage they will come up with a special tax for gold. So, some 75%-80% tax on gold is quite possible.

[karim0028]

Re: Legal Govt Theft : coming to a place near you.

Sounds like thats what dual citizenship is for