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16 December 2011

Tax makes you richer? It will never happen (unfortunately).

Despite all of the world's economic woes at the moment, it is great to see that there a few people who are still able to  "think different" on ways to get out of the mess we are in. For example, I came across Hassan Heikal's article in the FT recently, in which he suggests a one-off ten percent plus wealth tax on all those individuals world-wide with wealth above $10million.

This windfall tax would then be used to address the global government debt crisis in one fell swoop. Not necessarily the most obviously innovative idea you will have ever heard, until you consider that as a result of stabilising the crisis that the remaining 90% of the assets still held by the wealthy individuals would post-crisis jump in market value, and most likely become worth significantly more than the value of the 100% pre-crisis.

So everybody wins and nobody looses, so long as they all do it. Which, being individuals, they won't. Unfortunately. I guess it is a reminder that we shouldn't look further than ourselves and good old human behaviour for how we got into this mess, and indeed how we are going to get out of it too.

Best wishes for a great holiday break, a great family Christmas for those of you that celebrate it, and here's to an austerity-breaking 2012 (we all need to keep the faith...).

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