Thanks for all questions, I answered 4 of them on different videos. Whether tax affects growth or not, I think tax share will have to keep rising. kzfaq.info/get/bejne/d6mbZJualZnNnoU.html

It's not necessarily the rate of tax, it's the weird tax traps that seem to take place uniquely in the UK. You have massive drop offs at the 100k mark that incentivises people to keep their income under this amount unless they're earning over £130k. It's not just the marginal increase on that income. It's loss of personal allowance, free childcare, Higher NI, and a plethora of other weird, honestly unexplainable pain points at this income level. It makes people dump this money in their pension to keep their income below this level, keeping money out of the economy and tax revenue from being generated.

The issue is that poor and middle class have incomes. While the rich have profits and losses, because of that they have the ability to make their tax affairs tremendously complicated. We need to move away from the concept of taxing labour and instead tax wealth, but I doubt the current political class would ever want to do that.

It's taxing the "wrong" people that screws the economy. Then again how do you tax the "right" people when they can register their companies in tax havens or have non domiciled status.. All you have to d has o is look at Jacob Rees Moggs Somerset Plc registered in the UK but has never traded so never paid any UK tax. If you look at where his other companies are registered thyey are either in Brotish posessions or the ROI. Nothing against Moggy personally for taking advantage of an antiquated crappy system.

Although I have interests in global economics I don't watch the news anymore... I have enough FUD lol. Thanks for this news and offering your insight on how to navigate during unfortunate times/events like this. You're right about keeping level headed when investing so that's why I think it's important to limit the amount of FUD we consume. I don't watch the media but the news that you present has enough to know issues going on without riding the emotional rollercoaster if I were to watch the news everyday. Now I buy and just trade long term more than ever, I have made over 16 btc from day trading with Francine Duguay in few weeks, this is one of the best medium to backup your assets incase it goes bearish.

Just looking at the comments, I'm sensing people kinda missed the point of the video, which was a good summary. Taxes gain a more visceral response. As an American in Europe, there is a bit of a tax shock on some things, but the longer one is here and kicks around the situation, I think one sees tax is a distraction. I think the most enlightened part of the video is the "professor's" acknowledgement of how rates affect his desire to work. Therein seems to be a big difference between the two sides of the Atlantic. There's a sizeable difference in gross and net incomes between the US and Europe and it seems to be getting larger as the US seems to be establishing itself as the destination for getting sophisticated and complex things done and being paid well if you can participate in it. Europe seems to be arguing about how to slice up a shrinking pie rather than growing the size of the pie. That's not true of everywhere in the EU, but certainly among the biggest economies.

The reason why Singapore has "low taxes" is because they have state-owned enterprises (which help lessen the tax burden pushed towards the working class). It's also not a "free market" countries that Libertarians and other similar schools purports to. However, Western countries treat state-owned enterprises like a disease, and a majority of Western countries have privately-owned enterprises (also them canbalizing the public sector). Yes, up to a certain point you can't tax your way to growth. Yes, also higher taxes aren't amicable to attracting foreign investments (which is one of the driving factors for economic growths). China was able to get around this due to their high degree of state-ownership within the economy. The West to some degree like the US (mostly) are returning to some form of protectionism (and putting on massive tarriffs) obviously to protect the business interest of private American businessmen.

The issue in the UK is that employed people pay by far the highest rates of tax, despite other cohorts being better off and/or using the same public services. Why is income from employment taxed higher than other forms of income streams? When you factor in direct taxes and Indirect taxes, employed people are paying 50% of their total income in taxes. Ad you have to then ask, why are public services so poor when all this tax is being paid? Anyone who has a skill is better of leaving this country for a better quality of life where you ger more for your money.

As someone who pays +50% tax (incl. Income tax, NI, council tax, VAT, fuel duty, alcohol duty, TV licence), I can understand why so many people are moving abroad. Low taxes that everyone pays will always beat high taxes that nobody pays

The 40% rate at £50,000 is utterly punitive. My wife earns very little working part time and getting hit for tax at that rate really sticks in my throat.

Personally, i think the fact our mortgages and rent are so high, especially after the rate hike a year ago, this chews up so much more of our disposal income, and without money to spend, this will depress the economy

Council tax banding is outrageously unequal and needs urgent reform and updating. It is not right that the royal family pays the same for their sandringham estate than a terraced house in Woolwich. Also the fact that virgin, Amazon, google and other multinational corporations can avoid paying their due taxes in the uk to the tune of billions a year is unconscionable and wrong.

The obvious answer to the video title is yes - look at our current situation. You can't tax your way out of a hole. Its a compound issue with 7 million on out of work benefits (funded by tax) and those low earners caught by income tax. Then they raise corporation tax and dividend tax for those looking to go out and take risks running their own business, these people are further suffocated by IR35. We are taxed 20%-50% on our income, then 20% VAT on everything we buy, road tax to drive our cars, capital gains on our investments, inheritance tax on things our elders worked hard for. Its FAR too complicated and the government need to get people spending instead of wasteful spending and getting greedy putting their hand in the pot. Its not their money - they stole it from everyone who has a job or is trying to make head way in life.

I earn 100k from a swiss company. I’m already leaving the UK. I am not working my ass off to pay close to 50% ( business and income tax ) of it to either a lab or tory gov. They spend it so poorly its a joke.

In my view, the most fair change in taxation would be to tax all incomes equally. I never understood why taxing "honest work" should be so much higher than taxing "passive income". Do you see any reason for this other than those mostly earning passive income lobbying for it?

No one should pay more than 50 % tax, its immoral.

Could you look at council tax revaluation or other changes in tax that the new Labour government may bring in to fund the shortfall in spending?

There are some paradoxes as well. When Bulgaria cut taxes to a 10% flat tax, tax revenues actually went up because people stopped doing tax avoidance. Ironically, this tax cut was also introduced by a socialist government. Perhaps this can be a lesson to similar countries where tax avoidance is a problem.

Monaco isn't allowed to have French residents. Part of the deal the house of Grimaldi did with the 5th Republic so they could survive.

Labour needs your money more than you do.

It's sure crushing my personal economy!

I just checked the World Bank figures for GDP per Capita(all in US$) UK: $48,866 Germany $52735 France $44460 Italy $38373 Denmark $67967 Sweden $56305 Based on their tax (and compulsory social contributions which is just a tax with a different name) raised as %GDP the link between high tax and higher gdp is very weak in well developed economies in Europe. Also I do wish people would stop banging on about the Laffer curve. The Laffer curve is not an economic theory, it provides no guidance as to where, or how to calculate, the inflection point (the point at which raising tax rates does not generate more tax revenue). It is nothing more than an observation, a fairly obvious observation and not even original to Laffer. The most compelling theory for why some countries are happy to accept a higher tax burden than others is that it has to do with social traditions and specifically whether those traditions emphasise community actions/assistance over individualism or vice versa. As to whether higher tax leads to higher growth that all depends on what those tax revenues are spent on - both UK and France have made some very bad decisions on what to spend tax on probably over several decades

The sanity check for taxation is how much it raises vs how much it costs to collect. istr there are taxes in the UK that consistently cost more than they raise - another vid Tejvan ? As a check on badly designed taxes, and to highlight them, the government should work out peoples tax for them and tell them the cost of doing so, when they bill them.

As a business owner I can promise you that company tax is a mirage. Companies see tax as an expense, and like all company expenses they are ultimately for paid by the customer. Company tax is simply a consumption tax (similar to VAT) with extra steps to fool the plebs. We should be honest about this and admit that companies shouldn't be paying tax at all.

We pay taxes every time we blink. Yet the country is still in a mess.

The UK and EU is drowning in Tax and bureaucracy that's why we have growth 50% less than the USA in 20 years. I have been in business in the UK for 40 years but I have not invested a penny in 15 years nor would I in the future until I can get better returns.

As a manual worker most of my life, high tax puts many of doing extra work, so I assume less productivity less money for the firm I work for, tax thresholds frozen the last few years (unless Labour changes policy, doubtful) and until 2028 so fiscal drag means we pay more on low wages, just no insensitive is it, unless you have to to pay every rising utility bills, that’s real life for millions, if you run a company it’s not good for you either.

Look, if you want stuff you have to pay for it. If you want more stuff you have to pay more. Why? Because the people that make the stuff want paying for the stuff they make. If you buy a load of stuff you might get a bulk discount, but you'll still pay more than if you bought less stuff because the guy wants paying for the stuff he provides. We have to pay for stuff. We especially have to pay for the HUGE debt we've built up. People who loan money WANT IT BACK. And before you tell me I don't understand "economics" well, (a) neither do economists, (b) neither do you, and (c) I understand about wanting to get paid.

Liz Truss was PM for 49 days, not 44 days. As a general rule, higher levels of taxation act as a disincentive to doing pretty much anything. Higher taxes are often used in this way, and the so-called "sin taxes" would be an example.

For owners of Capital they can get 11.5% by just buying the SandP500 with almost zero risk and no work, that's why so much money is stashed away in offshore accounts and there is so little investment in the UK.

Strong public social security, healthcare and education systems and minimal inequality are probably the most important elements for stability and healthy society.

The boss is in town with the good question : Does Tax Lead to Lower Economic Growth? How does the taxer use money better than the taxee?

It means people have less money to spend So it affects businesses And affects their pockets

the artificial rise in energy prices is the real problem

Incredible work as always

Appreciate your work. You support France tax wealthy Thomas yes. Mixed economy France was from 1945 to 1975. Britain England London totally different system.

We need to close all loopholes and British tax havens it's a tragedy that they get away with this. 40% of the world's dirty money goes through London

Some say we needed reform. Another 5 years of keeping the current system in full farce 👍🏻

The complexities involved in taxation can be answer by such a broad question definitively. Key to the effectiveness and fairness of taxation is highly dependent upon who is taxed and how. Moreover, as Tejvan pointed out the returns from taxation depend on the economic returns on spending that revenue. What we need to emphasise is that taxation is supposed to bring economic and social improvements to the infrastructure that supports everyone, as everyone has to pay taxation, so everyone should see and should be able to understand how they benefit. Unfortunately, that isn't often the case, as sometimes it isn't obvious. Indeed, political ideology that focuses on individuals and families alone, barely acknowledges the importance of public spending to support them to be able to have a better quality of life. That's why the consequences of policies like austerity were ill understood both by those who advocated it and the electorate in the context of the UK's particular circumstances. That meant in many cases whilst we saved a penny, it cost us pounds further down the line. Our short-term political focus doesn't help either. So taxation is necessary, but also the need for wise, detailed, and careful consideration of tax policy is sorely needed. Our tax system evolves over time, so isn't always clear what Unintended consequences will follow. It is a balancing act, and ideological thinking, and economic experiments based on it, should be avoided. We need to be sceptical about easy answers to tough and complex questions, or we're likely to store up problems for ourselves. Luckily, people like Tejvan are gently reminding us of that fact.

Lve your videos watch them all the time. Could you do a video on China with it's problems at the moment, i hear the smaller banks are merging with the bigger banks because they are struggling.

In the UK taxes go from productive people to the unproductive (who simply consume) this destroys national wealth. There could be high tax high growth but then the taxes would have to go into productive endeavours not just to bludgers.

Great video as always. However, the page graphic at <a href="#" class="seekto" data-time="503">8:23</a> deserves a more in-depth explanation.

High tax is a result of an unproductive late stage economy, normally reliant on the post-services financialisation of the economy. The low GDP/capita means govts needs to raise tax per capita. Low productivity is caused by easy monetary policy and govt support for property/financial markets meaning banks allocate too much capital to mortgages and financial investment (where they can rely on govt backed security - no govt will let the largest pension asset fail) and not enough to innovative industries which can raise productivity.

Taxing working people means less spending. Taxing the rich means wealth distribution, good economy

Love your videos man!

I am not an economist, I cannot understand the concept of persistent and constant growth .the idea seems irrational to my simple mind. In basic terms the planet is a finite resource and already the cracks seem to be showing.

Taxation is theft. Especially if you're taxing anyone making less than 7 figures.

UK tax levels are very low. Try living in the EU and specifically the Nordics, no one would say that they are held back. Everyone paying tax means everyone realises they contribute to pay for stuff, the uk policy of removing people, from paying tax is not good. Income tax levels in uk need to increase massively.

My marginal rate now is 61.75%, there's no way I am paying that so I am left with the rather ugly alternative of cutting my hours and cutting my cloth accordingly It is sad to see consecutive governments continue to tax an burn and do so wastefully. £600m is spaffed on diversity officers across the public sector alone. Where is the optimal point on the Laffer curve? I can tell you it's not 61.75%

What is wrong (and this is globally) is we tax production. Stop taxing income and tax investment.

Singapore leads the world here - lower tax rates and higher growth, the best of both worlds

Wait a minute. In this video you state that higher taxes allows the government to build more houses which lowers prices and in the previous video you argue that building houses likely won't make much difference in price.

whats the point in working over 12 hours overtime a month when any more than that is worth so much less, im waiting for my tax refunds, at the end of the year the government will owe me a fortune, and ive already worked for it. I could do more but whats the point, its not worth it.

Higher taxes doesn't lead to economic growth because government is never an efficient spender or investor of taxes collected in any country. The taxes collected are mostly spent in irrational ways rather than rational means as business people think. Higher taxes stiffles economic growth. Aggregate demand falls from lower disposable income and Aggregate supply falls from weak demand and paucity of funds to invest in moving the Aggregate Supply curve to the right.

Are you sure you quoted the correct tax rate for Republic of Ireland?

Tax Wealth, Not Income

Imputed rent from home owners is 10% of gdp,remove this fraud from the figures and it looks very bad.

The order of your tax revenue to GDP chart is wrong, UK should be moved 2 to the left.

Rather than tax income, surely it would be better to tax wealth. The rich earn free money from their assets. Foreigners are also allowed to own assets in the UK, then take all the money back to their own country. If the government was to tax the rich against their assets, they couldn’t just up and leave… the assets are here in this country! Tax the wealthy… not the working class.

It all depends on the country concerned. in so far as the UK is concerned hi text means middle income businesses leaving the country for Low tax havens I can’t island

We need to increase capital gains tax on Assets.

I wonder how trustworthy the message you portray when showing the GPD to TAX graph. Since the only reason why the taxes are so high comes after the countries already became wealthy. Thusly, there is no correlation in the reverse. Thats probably why all of the outliers are grouped together.

"Does Higher Tax Lead to Lower Economic Growth?" No, just look at US and UK economies from 1948 to 1975, and then the those same economies when higher rate taxes were cut after Reganomics/Thatcherism. The evidence suggest quite the opposite - economies did far better with *higher* taxes.

Perhaps leaving the UK a third country may have something to do with it....

Avoid paying tax Angela did

Higher taxes=more over 50’s dropping out. Simple!!

People need to understand the basics… Money is just a means to allocate real resources (capital and labour). IF the government takes more and more money, then they allocate more and more resources. It’s that simple. The question is - who is better at allocating resource, government or the private sector? If you believe it’s government, then the crippling tax rate should make us rich! If you believe it’s the private sector, then we will be getting poorer at an increasing rate. All the evidence suggests private sector is much much better at allocating resources. It’s why the most brutally capitalist countries like the U.S. has 100% of all the largest companies and basically 80% of new medicine comes from there etc … meanwhile, socialist countries like France etc seem to always be on the brink of economic disaster

..no..but wasting £700 million on Rwanda does..🤔

If you can work from home and earn good money I would strongly advise you to leave the uk, you will have much better life for you and your kids. In Portugal and Spain you can apply for a digital visa and pay below 20 percent in total tax. In Poland, Bulgaria etc you can pay around 10 percent. Life is 2-3 times cheaper, plenty of land, much better properties, better schools. Uk is dead. 💀 a country with great past but no future.

This kind of thinking is why the UK is a poor country today and will keep getting poorer. Tax levels should first be considered as % of GDP and efforts should be made to minimize it's negative effect on growth. True growth is Net Domestic Product.

"Does higher tax..... ". Does higher immigration lead to lower growth?

There is only so much you can increase the tax burden. If taxes were increased from 38% to 45% matching Denmark as the highest taxed economy in Europe it might solve the immediate cash crisis in public services but, without growth, in a few years you will have the same problem again. The upper limit is of course 100% tax burden with the government owning everything but there will be a tipping point where everything collapses long before that. We have already accepted a huge increase in our taxes over the last 5 years and coming 3 years so now it is time to tackle the root cause. Stop this ideologically driven crippling of the economy. I'm very positive about the Labour government - I hope they succeed in their goals.

Panama - 5% VAT no income tax no inheritance tax, land duty and capital gain tax etc ... business are paying 10% corporation tax. Private health care. 18.5% GDP growth p/a in the last 5 years before hardly ever goes below 10% and birth rate 2.4. Paragway similar system much poorer country 4% GDP growth p/a . TAXES ARE THEFT and there's no way government spent our money better then we do !!

Tax wealth not working rich

A bit rich to blame Liz for the Brexit failures that were not delivered . since 2019.

Typical affluent middle class and rich outlook on the world, taxes are an essential part of the healthy functioning of society.

Benefits and boats buys starmer his votes