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Death & Taxes - One is Good

Veteran international investor John Corey comments

Do I have your attention? If you do not think you should pay taxes, you are reading the wrong magazine. Stick to charity publications and other material targeting poor people.

A report, pre-pandemic, showed that 60% of the UK population received more benefits from the state than what that slice of the population paid in taxes. The 60% were a net drain on the public purse.

For the next 20% slice of the population, their total tax contributions were equal to the benefits they received. It was only the top 20% of society that paid in more than they received back annually.
If you want to do well and 'win' the property investment game, you will end up in the top 20%. Translated, this means you will end up paying for others who are not as talented or lucky as you.

What are the benefits?
The word, benefits, might suggest a support payment from the government. In the study, the definition was much broader. The NHS, fire, police, border security, education, and other public services are all included in how a member of UK society benefits. The various services come at a cost and taxes cover those costs if the country runs a balanced budget.  When the UK takes in less than it spends, bonds are issued to fund the balance - debt which future generations will need to pay. It is the promise that the country will be able to pay in the future, which allows the country to fund gaps or to invest in infrastructure.

During COVID, the need to smooth out the economy quickly fell to the UK's Treasury. The amount of debt issued spiked massively. COVID is not over so the bill will climb higher. If the private markets did not believe the UK government could collect taxes to service new debt, we would be in a dire situation.

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