Up next in 10
Gary Stevenson, former trader and host of Garys Economcis, took your calls with Tom Swarbrick to argue for a wealth tax.
Gary estimates a tax of 2% on wealth worth over £10 million could raise anywhere between £20-30 billion.
Gary spoke to:
0.00 - Julie: ‘How will a wealth tax work?’
05.20 - Mahmood: ‘What can we do other than wealth taxes?’
07:57 - George: ‘So many people on your side belittle our concerns.’
15.37 - Tobias: ‘What should I teach my kids?’
Listen to the full show on the all-new LBC App: https://app.af.lbc.co.uk/btnc/thenewlbcapp
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0:00
Please, could you tell me more about how you see the wealth tax working
0:04
Yeah, this is a really interesting question, right? So me and the people I work with, like Patrick Millionaires
0:09
we campaign for 2% wealth tax above 10 million. It's not on income, it's on the wealth that you own
0:14
So all of your assets minus your debt, 2% a year. I think sometimes people tie me a little bit too strictly to that
0:21
like it has to be this specific form of wealth tax. The most important thing is that whatever tax you bring in
0:27
is effectively targeted at really, really the richest. We're not talking about bankers, doctors, lawyers
0:33
heaven forbid, LBC presenters. We're talking about phenomenally wealthy people with wealth of 100 million, 1 billion pounds
0:40
You need to focus on these people. We talk about a tax on wealth. There's other ways of doing it
0:44
We could talk about taxing very, very large fortunes at the point of inheritance. But really, you need to tax the richest people in society
0:50
the asset holders, because if you don't tax them, their wealth will grow at a phenomenal rate
0:55
and they will out-compete the middle class. And what that means is your kids can't have houses
0:59
So realistically, I'm not religious about exactly one or another form of wealth tax
1:03
I'm trying to make the case that we need some form of wealth tax. And what I want is for the public to get behind me so that I can force the government to do the work on making the plan so that this tax works effectively
1:14
I know it will be difficult. It's not easy to design. It's going to take probably one or two years to design
1:18
But you need to start doing it now so that you're ready before the next election. Otherwise, Labour are going to lose very badly
1:23
Julie? I totally agree. I worry that I'm Generation X and I worry that I'm not going to outlive my parents
1:33
I just don't think that because of the wealth distributed so badly between the classes
1:39
it's like all the services, the NHS, you know, things that we just rely on
1:43
even without our jobs and our work and our wages. It's just everything is geared towards people that already have enough
1:52
and the greed and the capitalism and I'm sick of it. So I'm with you, Gary
1:56
Thank you very much, Judy. Thanks, Gene. That's a nice start, Judy. Thank you very much indeed. Can I probe some of the way in which this might work
2:03
So you talk about, I think it's a tax of 2% on wealth over £10 million
2:10
Yeah. Roughly how many people in the country have that kind of wealth
2:15
And so what would that tax produce? It's not a normal sum of people. We think it would bring something sort of like £20, £30 billion
2:20
Depends exactly how you do it. But this tax, it's not specifically about raising revenue
2:25
What this is about is about stopping the aggressive growth in the wealth of the very rich
2:30
You know, I don't know if you remember the first time you ever spoke to United. Do you remember when it was? I've got a fair idea
2:34
It was in 2020, beginning of COVID. I called into your show and I told you we were going to have an enormous cost of living crisis
2:40
an enormous inflation crisis. Do you remember what the papers were saying at the time? Oh, God, I can't remember
2:44
Roaring 20s. Yes. Pent up demand. But they hadn't clocked COVID was coming, I don't think, at that point
2:48
No, this was during COVID. This was six months into COVID. Yeah, that's when I called you first
2:53
Yeah. Because what I recognise, which is the reason that I'm a multimillionaire, is if you allow inequality to increase massively, what that means is the rich buy everything. The rich buy everything from the middle class. The rich buy everything from the government. If you want your kids to afford houses, you cannot allow a future where the rich earn everything. You can't give the rich everything and expect your kids to have something
3:11
So if this isn't... So on the raising revenue point, you say it would bring in about 25..
3:17
Let's say 25 billion a year. Yeah. That's... Not enough. That's not a lot
3:21
I know, it's not enough. That's 2% of government spending. Listen, if... So why are you saying 2% on that wealth
3:26
I know it's not enough. Yeah. I know that. I'm aware of that. So why If you don get the 2 this country will collapse If you get the 2 the country will collapse slower Really What you need is much more You need to look at how do we really aggressively tax the riches in the country much more
3:40
And I don't say that because I want to do that, Tom. I say that as one of the best economists in the world
3:44
because I'm betting on if you don't do that, the economy will collapse. NHS collapses
3:49
Education collapses. You cannot. Listen, if you have a wealth of £1 billion, what's your passive income
3:55
What's your passive income? Passive income if you have a wealth of £1 billion. Depends where you're getting it from
3:59
depends how much of it you're using. 50 million a year, 5%, 50 million, 1 million a week. If you had 1 million a week passive income
4:04
how much would you spend? God, loads. How much? I don't know, I don't know
4:08
I've got half a million, these are numbers that are so absent. I can't even think about it
4:12
It goes absolutely mental, spends half a million pounds a week, right? That means you still have half a million pounds a week
4:16
to do what with? Buy the rest of the assets. Sure. You cannot allow
4:20
you cannot allow these people to accumulate the wealth that quick. So what do you want it to be? If 2% on wealth above that threshold
4:25
and we can get into how that wealth is measured, Yeah. If it's not 2%, because that just doesn't bring in enough
4:33
what does it need to be? I think when you're talking about the very, very, very rich, I think you need to look at reducing the ways they avoid taxes
4:39
I think you need to look at inheritance taxes on the very, very rich. I think you need to look at..
4:43
You simply cannot allow... If you have one group of society that increases its share of ownership to 100%
4:48
then that means the rest of society reduces its ownership to 0%
4:52
I don't know if you're a billionaire, Tom, but I assume you want your future kids to own houses
4:56
and so do I. And you cannot have that if you... Listen, you're richer than I am, Gary, by multiple, multiple levels
5:02
Look at human history. Most of human history is a tiny, tiny super wealthy elite
5:06
and the vast majority of people desperately impoverished. And that's the most of the current world as well, OK
5:11
My grandma grew up in London in the richest country in the world and three of her siblings died of tuberculosis, disease of poverty
5:17
That will happen again if you allow the rich to take everything. I know you're a proponent of wealth taxes
5:23
I've followed a lot of your work. The YouTube's great, by the way. But just from your perspective as an economist, do you have any other ideas or policies that you can put forward to the people in charge other than just the wealth taxes
5:37
You know, there's loads of things which are being talked about now. And they're talking about now because the government desperately needs money
5:42
There's things like equalizing capital gains and income tax, which I think is something that they might do
5:48
I think that's this talk about making, I think reducing tax loopholes is an obvious thing
5:54
Tax exemptions, especially on things like inheritance tax exemptions, you get situations where the richest people pay nothing
5:59
by putting money into trusts. I think we can dive into exemptions and we can get rid of them
6:05
The reality is you need to do something. In this budget in November, what we are going to get
6:09
is probably a tax raid on the middle class and the upper middle class
6:13
and we're probably going to see nothing serious done about the super rich, the billionaires
6:18
It's absurd, really. There's lots of things you can do, but if you don't deal with the top end
6:23
then you don't fix that problem. What you're going to see in November is the middle class tax so that the government can give that money to the rich
6:29
to convince the rich to keep the welfare state going for another five years. You need to do something about that top end
6:33
And you would say that rich means assets of more than 10
6:39
having more than 10 million a year in assets? I mean, there's obviously not one cutoff point
6:43
in which you wake up and suddenly you're rich. If you go to bed with 9, 9, 9, 9, 9, 9, 9, you know, 9 million
6:47
you're still pretty rich. What I want is genuine progressivity. what i don't want is a situation we have now where somebody like me somebody like yourself
6:54
works hard makes good money has to pay 50 60 percent and the duke westminster inherits 10
7:00
billion and pays nothing if that's the system that you have i can guarantee you in 20 years
7:04
the rich will earn everything well he he um inherited billions of pounds um but he is he does pay tax He pays tax in lots of different ways There would have been an inheritance
7:16
What would you say is his percentage taxes paid on his lifetime income that he received
7:20
No idea. I would be a strong seller at 5%. These guys pay virtually nothing on total lifetime income
7:27
Even if he's earned it? Well, I mean, he received it from his dad. So if he earns money through
7:32
work, he would have to pay income taxes? If you inherit £10 billion, then your lifetime work income is a very small percentage of your lifetime income
7:39
So how would you go after that £10 billion? I think there's lots of different ways you can do it
7:43
I think wealth taxes is one way. Wealth taxes is one way we support. I think inheritance taxes on huge hoarded assets is another thing
7:50
I think you need to look at hoarded... You need to tax wealth hoarding. You need to tax wealth hoarding in one form or another
7:55
Let's get to George in Worcester. George? Hi. Thanks. Cheers. Cheers, Tom
8:00
Hi, Gary. I earn £8 an hour. as a self-employed. I'm 43 years old
8:06
I've got no pension, no holiday pay, no sick pay. But my main concern
8:11
is immigration. I want to stop immigration altogether. You won't, I don't think you're going
8:17
to achieve anything, Gary, because a lot on your side, they just keep calling us names
8:23
People with my concerns, they just call us names. They belittle our concerns as well
8:28
So we're at like an impasse. You're probably, I'm going to give you the benefit
8:33
the doubt that you're correct on your economic prospectus. But the fact that so many on your side just belittle us, call us names, belittle our concerns
8:44
just means that we're never going to come to your side. Until people with your economic viewpoint start taking our cultural concerns more seriously
8:55
there will always be this impasse. I have never heard anyone say that they want a wealth tax
9:01
and that they also want to stop the immigrants coming in. Yeah, I do worry that you might be all right, George, to be honest
9:10
I live near Kinei Wharf and there's one of these migrant hotels near where I live, in Kinei Wharf
9:15
And my cameraman told me there was one of these protests the other day
9:19
So I went down, the cameraman shoots my YouTube. I went down after I shot the YouTube. And I went there to this hotel and there was the protesters on one side
9:28
and there was the counter-protesters on the other side. and to be honest
9:33
it was as you say George it's two groups of people standing on opposite sides of the road
9:36
pointing at each other and calling each other names and I worried when I saw that
9:43
that was a little bit of the vision of the future of this country you know
9:48
I'm an economist and I stick to economics I'm not an expert on immigration
9:53
I think the primary economic concern is growing wealth inequality, I'm very confident on that
9:58
but I think if people such as yourself, George, want there to be low rates of immigration, you've got every right to say that
10:03
and you've got every right to believe that. And I do worry that this growing division
10:07
is going to tear our country apart and it's going to prevent people like me from getting the change that I need
10:12
And what that will mean, George, is that people like you and people like your kids
10:16
will suffer very much economically. And I worry, you know, this is what keeps me up at night, to be honest, George
10:22
How do I convince the public? I don't, you know, this reminds me of Brexit
10:26
My brother was very anti-Brexit. my dad was very pro-Brexit and I saw these fights at the dinner table
10:31
and when I saw this what was happening outside this hotel that's how
10:35
this is my country you know and I don't hate people on either side of that road you know I not an expert in immigration and I probably never going to be but I tell you this one thing right now If the ordinary hard people in this country allow themselves to be divided on this issue then the current state of play will continue
10:51
which is rich people getting richer and richer and richer and richer, while working class people
10:55
get poorer and poorer and poorer. I've got a four-year-old and I've got a ten-year-old. Now
11:01
hypothetically, if that two percent tax does occur on the wealth tax
11:05
and that does affect the economy. What sort of advice would you give
11:09
to me as a 37-year-old to teach to my children in years to come? What should I be teaching them
11:16
Yeah, if we get that tax, then I think that opens up a lot of space. I think it will enable us to protect public services
11:21
I think it will make it a little bit easier for ordinary people like yourself, like your kids, to buy housing
11:25
On 2% of government spending? Listen, 2%, I've told you. It's nothing. No, no, it's not 2% of government spending
11:31
Listen, it's not enough, but what it will do is it will stop that increase
11:35
in inaffordability of housing, because that And affordability of housing is being driven by the growing wealth of the rich, Tom
11:40
In part, yes. It's a scarcer resource because it's being bought up by people who have the money to buy it up
11:44
But we're not building any. The house building in London has effectively collapsed
11:49
The reason why is the developers say that it's impossible to get the planning permission quickly
11:54
If we're going to reduce the cost of housing, we've got to build more homes
11:58
And if part of the reason we can't build more homes is it takes too long and the planning application is appallingly bureaucratic, we've got to cut that
12:06
Tom, just quickly on that. Before I go back to Tobias' question. Sorry, yes, of course. Can you name me one city in the world which built its way out of the housing crisis
12:12
Which built its way out of the housing crisis. It depends what you mean by out of. Built enough houses that housing became more affordable over time in the last 20, 30 years
12:19
Well, there are lots of places in which housing is far more affordable than here, lots of other countries in which it's, and far less scarce
12:25
Like where? Well, I don't know, like in Australia, for example, or in other parts of Europe. So you think housing's affordable in Australia
12:30
I think housing is more affordable in Australia than it is here, yes. Significantly more
12:35
What do you mean by significant? Listen, you know, so I've worked all over the world with people from all over the world
12:41
I've got YouTube channel watched all over the world. And I constantly get people who think the housing crisis is just in their country
12:47
People in London think that. People in New York think that. People in Sydney think that. People in Melbourne think that
12:52
People in Vancouver think that. People in LA think that. People in Mumbai think that. People in Tokyo think that
12:55
People in Shanghai think that. It's a global problem. You don't build your way out of a global problem. It's a global problem
13:01
So the answer to the housing crisis is not to build more homes
13:05
You need to protect yourself from the billionaires. If you are competing with billionaires... You've got to build more homes. I know that's a very easy answer, right
13:12
But listen, I make a lot of money betting on the economy. And I think you're wrong, Tom
13:16
I'm not saying we don't build more homes. I'm not against building more homes, right? But look, go out in London, right
13:21
Go to... I don't know where you grow. I grow in a place called Ilford, right? Street, small terraced houses, right
13:27
Go to that street now. Every single house. Expanded up, expanded back. Massive blocks of flats blocking out the sun
13:32
Is Ilford more affordable? No. No. No, it's not. You don't build your way out
13:37
Listen, all you do is you turn my home city into a slump. That's all you do. That's all you do, Tom
13:41
Listen, and I know that's not the answer you want, Tom, but there's a reason that I make millions of pounds
13:46
betting on the economy because I'm good at this, right? And I'll tell you right now, you're not going to build your way out of it
13:50
And housing will become less affordable unless we deal with the problem
13:54
of rapidly increasing wealth of the rich. It's not just housing, Tom. Look at the stock markets
13:59
Look at the gold price. Look at land prices. Every single asset class in the entire world
14:04
has increased massively in the last five years, in the last 20 years. This is not a problem of housing
14:09
This is not a problem of London housing. This is a problem of ordinary people's inability to compete
14:15
with a massively growing, wealthy, super rich class
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