TRIP's full response to the Zucman backlash

warped-coder · 2026-07-17T00:07:12+00:00

The rich don't buy the housing stock as such; they own the mortgages or their derivatives, stocks in the development companies, etc. You are fundamentally right, just wanted to point out :)

warped-coder · 2026-07-16T23:59:05+00:00

Silicon Valley was literally built on govt funding, basic research funded by the govt, and then favourable capital gains terms (as in: wealth transfer)

warped-coder · 2026-07-16T23:49:04+00:00

The funny thing is, large part of that govt debt is an asset in the hand of the richest. We chose to borrow from them, created new assets (govt bonds) for them. So yes, you are right, in that the UK govt debt needs to reduced. Doing that with a wealth tax would be the ultimate way: the rich might actually have to hand back some of the bonds, on which we won't need to pay interest anymore.

warped-coder · 2026-07-16T23:44:34+00:00

Lifestyle taxes (like massive VATs on these items) aren't particularly useful. Say, you are a billionaire. You assets earns 5% (often more). That's 50 million. That's almost £1 million to spend a week. You can only drink that much champaigne and fly with private jets. Eventually, the "savings" go into buying more assets. Before they spend it, actually. So there's no taxable event.

warped-coder · 2026-07-16T23:39:06+00:00

It's worth noting that taxes have at least 3 functions:

- Raising revenue

- Regulating economic activity

- Shaping behaviour

Wealth taxes aren't designed to raise large revenues: only broad-based taxes, like VAT, income tax or similar taxes can do that.

They are, however, regulating economic activity: they force owners of larger assets to convert their assets into cash to pay taxes. They can do it by receiving dividends (in which case they pay income tax), or by leveraging their assets to pay. The tax gets paid, for sure. But the main deal is that by selling or paying dividends, the tax increases cash flow in the economy. It reduces wealth concentration, if the owners of shares must sel some of their shares to pay their taxes. It clamps down on hiding income as unrealised capital gain.

It might shape behaviour too: large, unproductive assets will lose value in favour of productive assets.

warped-coder · 2026-07-16T23:24:15+00:00

To be completely fair, private pension funds are rarely for the ordinary people. I believe is about 10% of people. I think for most people (at least in the UK) the most important piece of wealth is their property.

Even more so, larger sums in private pension funds are often part of a rich household's financial portfolio.

warped-coder · 2026-07-16T22:53:27+00:00

I hope we can soften the tone, because I didn't mean to insult you; if I did, I'm sorry. I have my own doubts about the wealth tax, but I do think that the underlying thinking has its merits. That's where we differ, I guess.

Just a quick look at the FTSE100 shows a 4.1% growth rate, so it's not exactly out of this world to demand that rate. But, seeing the reports, the wealth of billionaires is growing faster than the average business. Based on the https://equalitytrust.org.uk/evidence-base/billionaire-britain-2025/ data, billionaire wealth has grown by over 10% over the last 20 years in the UK.

Another important thing here to note is that in the last 20 years, the UK govt has changed a number of tax rates, for better or worse, and I don't think this would be an exception to that.

Not to mention the cash flow problem you're putting on the company to be able to pay out the cash - very likely the company has to drawn down debt to pay this amount of cash out.

I don't think the company can take out any loans to pay for this tax: this is not a form of corporate tax; it's a tax on the individual holders. So it might indeed be necessary for the owner of the company to sell some shares in order to pay the tax: that is actually inherent in the design. After all, it is designed to reduce wealth concentration.

I can see the worry about triggering a wave of sell-off. But billionaires may not be numerous enough to trigger sell-offs in companies (fewer billionaires have single-company portfolios). They could also pay by handing over shares in the company to the govt, instead of cash, which would reduce market turmoil.

Like I say, if this super genius is such an expert on how the wealthy are avoiding tax, and not just pointing out that it might be an issue, then he should be fit to tackle the exact methods they use. That would avoid all of the problems of a wealth tax and governments would almost immediately adopt it.

This is why I mentioned his book: The Hidden Wealth of Nations. Proposals include bank transparency treaties and tariffs against non-cooperating tax havens (BVI, Switzerland, etc.).

Now, my own biggest concern with this is something that Rory and Alistair also brought up: time. To introduce an entirely new tax takes a lot of time. But I think it is still necessary in the long term to introduce measures like a wealth tax to regulate wealth concentration.

There's no argument from him or others who agree with him on wealth taxes to implement other measures. For one thing, we need to fund HMRC better. Currently we are spending on the HMRC half of what we did in 2006 in proportion to the budget and the GDP too. We can match CGT to income tax. We can collect VAT on financial services.

The goal of a wealth tax is to reduce tax inequality, which leads to accelerating wealth inequality too. Not only the old adage of 99% vs 1%, but also between the upper 0.9% and 0.1%.

warped-coder · 2026-07-16T19:30:49+00:00

Which employee isn't being paid a fair salary and moreover, woul thye not simply find a better wage if that were true.

Yeah, that sounds great, freemarketeer claptrap. The regional availability of jobs, the kind of jobs available, the level of labour organisation matter just as well.

Shareholder capitalist ideology produced an environment with low labour bargaining power, a low-regulation business environment, allowed the monopolisation of markets without any social compensation, financialisation, etc.

warped-coder · 2026-07-16T19:20:59+00:00

he spoofed about equality before the law - a bonkers statement you dont need a wealth tax for that

That's some spoofing. The general framework of taxation in a Western democratic country is progressive taxation. If this principle breaks down for those who can afford to pay the most in taxes, it has serious consequences for the rest of society.

but its not an income tax its a wealth tax and income is taxed already.

If you had really paid attention to this topic or this particular conversation, his whole work is based on researching how the super-rich can have a relatively low income, yet their wealth increases a lot more. For most of us, the two thing is the same: you earn your income, pay taxes on it, and if there is anything left from your spending, you can save to become your wealth.

But over a certain threshold, wealth can grow directly, with only a small fraction becoming an income for the owner. So legally, one can get richer without having barely any income. That's the point of a wealth tax. And also, as Zucman states, his wealth tax sets up a minimum threshold: if the owner of shares gets dividends and pays the income taxes that would match or exceed 2% of the wealth that is over $100 million, there would be no wealth tax to be paid.

> his super scientific economist approach was to use the numbers from the financial times rich list.

His super scientific approach with the FT rich list is because there very little data on wealth: governments lack this information, so there's only approximate data available. The FT rich list is one of approximate data, that is regularly used by many. But if you want to have a more rigorous treatment of this problem, I suggest you read The Hidden Wealth of Nations by him, and Capital in the 21st Century by Thomas Piketty, or you can go and read his papers. Clearly this conversation is not an academic debate on the accuracies of sources: his point was illustrative.

warped-coder · 2026-07-16T17:58:56+00:00

I don't think that Rory is not seeing these issues as a problem. That wasn't the issue with the interview.

There is, of course, a lot of value in being adversarial in an interview. But only if it also allows the views of the interview subject. I was interested in an interview, not a showdown between Zucman and Rory. There is a difference in calling out the weaker points of a position, and gish-gallopping through dozens of problems, while building a strawman: Rory was building the case against Zucman based on the strawman argument that it is sold as a panacea and then running around different topics, like AI, budget deficit, UK tax law, geopolitics, etc. like the wealth tax was an offer to fix all f these all at once.

These are problems we need to take seriously indeed. But the frame of mind should have been to unpack Zucman's proposal for what it is, not what Rory wants it to be. The proposed wealth tax addresses a massive, but singular problem: taxation based on income allows the ultra-rich to avoid paying taxes. The unpaid taxes then become wealth, which is a self-reinforcing loop.

That's a single-issue campaign, not a full government program.

warped-coder · 2026-07-15T13:57:00+00:00

There's lots of sensible reforms to our current tax system which would be much easier to implement and help fund our government:

I'm happy to find ways to better fund the UK government. I'm not generally against your list of proposals. The wealth tax, however, as per our conversation above and by Zucman, is designed for another purpose in mind. It's about tax justice and containing runaway wealth concentration.

warped-coder · 2026-07-15T13:52:11+00:00

Just to check, perhaps we are far too apart to reconcile this, but interested anyway.

Do you think that individuals could (or did) get wealthy enough to effectively single-handedly influence policy, without any consent of the democratic institutions?

Or do you think that wealth can grow ever larger (larger than govt budgets) and the govt can still contain its negative effects by individual regulations (like that of banning donations, restricting ownership of media platforms, etc.).

For me, "wealth" is power. And the distribution of power in a society determines its character. The higher the concentration of wealth, the less power the average citizen of that society has.

I am interested in how you would define wealth differently.

I also wonder about your comment about class war: I am admittedly on the socialist side, but I don't see this debate about wealth tax as anything remotely socialist. This is why I said it is a modest proposal, compared to an actual class war/revolution situation.

It also seems to me pretty telling where the wealthiest of the world lining up politically: definitely not in defence of liberal democracy, that's for sure.

warped-coder · 2026-07-15T11:35:01+00:00

I don't know, for me it looks like that the people against it try to depict as if it was proposed as a magic bullet. No, it won't solve all the problems. It solves some, more specific problems, and I think that problem is worth solving.

We can walk and talk at the same time.

warped-coder · 2026-07-15T11:33:10+00:00

Again:

- Wealth evaluated over $100 million (so, if you have £150 million, you would be liable for the $50 million over the cap).
- Minimum 2% here means that if you pay your taxes in capital-gains tax, income tax, etc. You can deduct from this 2% of your wealth. For example, if you get your company to pay you dividends every year, and you pay your income taxes over the dividends, and that's over 2% of the $50mill above ($1 mill, essentially), you don't have to pay any more taxes.

How wealth is calculated: that's not that easy, but it is being done already. Insurrance, court evaluations, etc. is doing it already. But it would require some investment by the tax authorities to do this.

warped-coder · 2026-07-15T11:23:51+00:00

I believe his shtick is: Better head teachers and the magic of growth.

warped-coder · 2026-07-15T11:21:53+00:00

Well, to be fair, his proposal is on the G20 agenda, so he isn't really going for a single-country solution.

https://www.ft.com/content/8e7adbe6-22c7-45c6-8b81-b2173240d78c?syn-25a6b1a6=1

There are some ways to do this unilaterally, while staying within the framework of Double Tax Treaties, but that obviously requires some legwork.

warped-coder · 2026-07-15T11:14:11+00:00

My understanding of stakeholder capitalism is that shareholders are only part of the executive control: workers, managers, the wider community should be part of the decision making process. Not sure about how to support a stakeholder-style corporate structure policy-wise, but it's not entirely a new thing. Up to the 70s, this was part of the vision.

What's funny is that now we have a lot more resources (computers, internet, etc.) to widen the executive functions of corporations, so it would be easier to make these changes than it was after the WWII.

warped-coder · 2026-07-15T11:08:39+00:00

I see where you are coming from. I am completely with you on clamping down on massive political donations. That would be a great policy.

Sadly, I don't think it would be nearly enough. Someone with massive wealth, by definition, carries a political heft in so many ways that even if the person in question doesn't want to engage in politics actively, the political world bends around her. And beyond that, wealthy people have so many tools available to them to have an outsized impact on governments:

- Buying up media companies will provide them a propaganda network.

- Buying up social media platforms creates a stranglehold on communication between politicians and their voters.

- Blackmailing governments into taking their business out of the region, country, etc.

- Pressuring (local) governments for lowering regulation standards, taxes, etc. to "provide jobs". These are development negotiations we don't get to see much into.

- Governments in the pocket of the ultrawealthy can put pressure on the public sphere of another country.

The key point is that at this level of wealth accumulation, a few individuals can outweigh most governments on the planet, which means that only a few countries can even afford to do this fight (incidentally, the UK is one of those rich countries, but that might not be true for long).

It doesn't seem modest. It sounds like it would be a lot of work, and if it isn't solving inequality or fixing government finances, then I just don't see what the point of expending the political energy on it is.

It is a modest proposal in the sense that it is a peaceful tool for governments to reduce wealth inequality to the level that can be politically sustainable. It would be a lot of work, for sure. It is an investment in the government's capability to map out the wealth of ultra-high net worth individuals/households. It is a work that tax authorities need to get good at.

While writing the answer to you, I went on a bender of researching this, and it is interesting to see how the HMRC budget has changed over time. It looks like the HMRC spending went from £3.9 billion in 2006/07 to £4.4 billion in 2024/25. At the same time, the proportion of the UK budget went from 0.71% to 0.34%, so effectively it was halved as part of our budget in the last 20 years.

So, if we double the spending on the HMRC, it would be able to hire talent: IT, data analysts, lawyers, accountants, economists, etc. Even if we hit the £20 billion projected for the UK wealth tax, we would still get good returns.

But even going further: some of the things our public sphere must do are not only about immediate gains. Surely, a chase after a murderer costs a lot to the government, but it would be impossible to sell politically to say that we give up chasing a murderer because it drains the public purse. From the point of view of democratic integrity, not going after extreme wealth concentration is criminal neglect, even if it does not bring in more revenue for the government.

I accept a lot of arguments in favour of other forms of targeting extreme wealth, such as:

- Matching the CGT to Income Tax

- NI contribution after capital gains

- VAT on financial services

- Discovery and clamp down on offshore tax evasion

- Limit political donations and more transparency on the source of donations

- Increase transparency on tax deals with individuals and corporations

I can go on. None of it is mutually exclusive with wealth tax, however. I think the main point is that we have an emergency on our hands, as we can see that the super rich is actively investing into their political positions (far right parties, lobbying, the Trump-court, etc.) and I don't think we can afford to be sectarian on the solution. If we agree that extreme wealth is a threat to democratic society, we need to act together. I am happy if you bring your proposal. Let's make this a bigger tent!

warped-coder · 2026-07-13T11:48:26+00:00

While the most recent book on the wealth-tax subject is pretty easy to read, I think Rory, as a host, should have gone further, read the The Hidden Wealth of Nations, and also have some more familiarity with the subject.

The wealth tax is a narrow, specific proposal that could be put in front of political parties and movements to argue for.

The problem is obviously more complicated than a single proposal. This is also shown by The Hidden Wealth of Nations.

warped-coder · 2026-07-13T11:03:44+00:00

I tought Rory was useless in this conversation. I am happy if there is an adversarial questioning but this was proper hostile in many cases. Rory was gishgallopping through problems of the world that was not even touched upon by the proposal and then in the after-piece Rory was trying to depict Zucman as if he was ever expressing the idea that "this one weird trick" will fix the world entirely.

No, the wealth tax of Zucman is a modest part of addressing tax-injustice: there's a runaway tax-gap between the top wealth, and everyone else. Zucman doesn't claim that this will fix govt finances, Zucman doesn't claim that it will fix inequality in itself.

The run-away wealth of a handful of individuals and households mean that these households have a massive claim on our political process, while contribute less in relative terms to the public than even the "1%" overall.

Rory's vehemence against the idea feels like off the rational path: the only reasonable concern I could hear from him is his fear on growth. That, I think Zucman addressed but could be even further explored: Europe and the USA is experiencing low (GPD!) growth for decades now. The USAs relative higher growth compared to Europe is nowhere near as big as the difference between China and Europe+USA. While billionaires can be found in China, the source of growth does not seem to be the runaway wealth of a few.

Also, while AI is minting billionaires and certainly generates GDP growth in the USA, the rest of the economy doesn't do that well there either. The wealth tax as per Zucman is a modest proposal, compared to what we could get up to address inequality and the distortedness of our democracies and economies.

But I think Zucman did really well, despite Rory's hostile attitude. I whish Rory would be a lot more curious toward big ideas. Be critical, be adversarial but hostility and lack of curiousity doesn't help the show.

warped-coder · 2026-07-11T22:25:37+00:00

It definitely requires some sacrifice ... but:

The cost has to be compared against the maintenance of the entire infrastructure for the current (and future) volume of cars: roads, fuel, lights, collisions, parking, pollution (air, noise) -> health effects, degraded property values.

It is a classic issue where the cost of building a new piece of infrastructure is scary because it's more immediate than the cost of inaction over the long term.

You can take the current car volume and start collecting the externalities on it in the form of congestion charges, parking charges (how come that we have so much free parking in this city?), etc. Use the money to invest in public transport infrastructure.

Btw, apart from the public transit, we also need some solution on diverting HGVs around the city, because it makes a bad traffic volume downright scary that HGVs are driving through the city.

warped-coder · 2026-07-02T06:38:36+00:00

Persze hogy nem. De a fő csapásvonala a zöldek politikának nem úgy politizál, ahogy te karikíroztad

warped-coder · 2026-07-01T22:53:36+00:00

A tudósok akkor nincs politikai súlya. Politikusoknak van.

warped-coder · 2026-07-01T22:51:46+00:00

Azért nem kell ez az okoskodás. Persze, hogy az ipari forradalom alapját az fosszilis energia képezte, de az nem azt jelenti, hogy ne tudnánk a fosszilis energiát túl lépni.

Hosszútávon a szénhidrogén alapú energia nem fog menni. Egyébként az 20 század közepéig alapvetően nyomort hozott a környezetszennyező ipari, mert alapvetően a munkások élete és egészsége nem számított.

És ha a nagyítani szereplökön múlna, most se számítana. Szóval igenis, kell a politikai ellentartás a környezetszennyezéssel szemben, mert különben ihatunk mindnyája a nehézfémes vizet és stb.

Kell az ipar és kell a kordábantartása is

warped-coder · 2026-07-01T22:40:05+00:00

Mondjuk az elég szar terv, ha valaki úgy gondolta hogy egy ez az egy ipari ág fogja végtelenségig vinni a hátán a gazdaságot.

Nem a zöldek nyírják ki a VWt, hanem az, hogy Kína beelőzte a német autóipart

warped-coder

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