🎥 How Government Policy Made the Rich Richer — and You Poorer 📌 Exploring Tax Breaks, Austerity, Wealth Inequality & Policy Loopholes in the UK
🔥 In this powerful, eye-opening video, we unpack how decades of government decisions — from tax cuts and austerity to investment incentives and the notorious carried interest loophole — have fueled wealth inequality in the UK and beyond.
🔍 Key Themes Covered:
The rise of capital over labour income
How austerity hollowed out public services
Why the tax system favours the ultra-wealthy
The truth behind the carried interest tax loophole
Who benefits — and who pays the price
Global comparisons & alternative policies for fairer growth
👥 This video is for: UK taxpayers, working-class families, economists, voters, students of policy, and anyone seeking to understand how power and money intertwine in modern governance.
🧠 LEARN MORE & SOURCES: 📚 Referenced Reports & Articles:
Institute for Fiscal Studies (IFS) - Income Inequality
Resolution Foundation - The UK’s Wealth Divide
Wealth Tax Commission Report (LSE & Warwick)
OECD: Tax on Capital vs Labour
Guardian on Carried Interest
📌 TAKE ACTION 💬 Share your opinion in the comments — Has austerity impacted your life? Should we tax the rich more fairly?
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00:00Over the last 40 years, something fundamental has shifted in the way wealth works, not just in the UK, but across the developed world.
00:10The rules of the economic game have changed.
00:13But here's the catch. It wasn't accidental.
00:16It was policy.
00:17While ordinary people tightened their belts, lost secure jobs, and saw public services stripped away,
00:25the ultra-wealthy have seen their fortunes skyrocket.
00:28And a huge part of that story comes down to government decisions on taxes, austerity, and the quiet protection of wealth.
00:38Today, we'll explain how government policy has systematically made the rich richer and left the rest behind, and what can be done about it.
00:48The policy shift.
00:49The 1980s marked a pivotal turning point.
00:52In the UK, Thatta's government, like Reagan's in the US, embraced a new economic philosophy, deregulation, tax cuts for the wealthy, and the belief in a trickle-down effect.
01:06Corporation tax was cut.
01:08The top rate of income tax fell from 83% to just 40%.
01:13Capital gains taxes, paid on profits from stocks and property, were reduced or deferred.
01:20All this was done in the name of growth.
01:23But the promised benefits didn't trickle down.
01:26Instead, wealth concentrated at the top.
01:29The logic was simple.
01:31If you let the wealthy keep more of their money, they'll invest and create jobs.
01:35But in reality, much of it went into financial assets, real estate, and global investments.
01:42Growing the wealth of the already wealthy, not creating widespread prosperity.
01:48Investment versus labor.
01:51Here's something few politicians want to talk about.
01:54In today's tax system, money made from wealth is taxed less than money made from work.
02:00If you earn a salary, you're taxed progressively.
02:0320%, 40%, 45%.
02:07You also pay national insurance.
02:10But if you make money from selling shares or property, you pay lower capital gains tax.
02:15Often around 10% to 20%.
02:18And no national insurance.
02:21In the UK, this discrepancy is especially stark.
02:25High earners in finance can restructure their income to be taxed as carried interest.
02:30A loophole that treats their earnings like capital gains rather than salary, dramatically lowering their tax bill.
02:39That means a city hedge fund manager can pay a lower tax rate than a nurse or teacher.
02:45Austerity, the great divide.
02:46After the 2008 financial crash, the UK government introduced austerity.
02:53A decade of spending cuts designed, supposedly, to reduce the national deficit.
02:59But what did it actually do?
03:01Local council budgets were slashed.
03:04Over 800 libraries closed.
03:06Youth centers disappeared.
03:08Police numbers fell.
03:09NHS waiting times soared.
03:13Benefits were cut.
03:14And the rollout of universal credit hit the poorest families hardest.
03:18Meanwhile, taxes on wealth remained largely untouched.
03:23Research by the Institute for Fiscal Studies and the Resolution Foundation shows that austerity disproportionately hit low- and middle-income families.
03:34The wealthiest, largely unaffected, protected by rising asset values and generous tax treatment.
03:41It was, in effect, a reverse redistribution of wealth, from the poor to the rich, enabled by government policy.
03:49The carried interest loophole.
03:51Let's zoom in on one specific but powerful example.
03:55The carried interest loophole.
03:57Private equity partners, people who manage billions in investments, often receive their pay in the form of a share of profits.
04:06In the UK, this is treated as a capital gain, not income.
04:10The result?
04:11Instead of paying the 45% top income tax rate, they pay just 28%, or even less, with tax reliefs.
04:19This has been criticized by everyone from the Labour Party to the Financial Times.
04:25Even President Joe Biden has tried to close it in the US.
04:29But in the UK, it remains untouched.
04:32Why?
04:33Critics point to lobbying, influence, and the close ties between finance and government.
04:40The rise of asset holders.
04:42Over the last two decades, the value of assets, especially property and stocks, has exploded.
04:47Those who already owned homes or investments, got richer.
04:51Those who didn't fell further behind.
04:54This divide is generational too.
04:56Older people who bought homes in the 80s and 90s have seen their wealth soar.
05:02Young people, meanwhile, struggle with stagnant wages, high rents, and virtually no chance of entering the housing market without help.
05:11And because the tax system rewards wealth, not work, this gap keeps growing.
05:15Why nothing changes.
05:18So why haven't these unfair policies changed?
05:21In part, it's about politics.
05:24The wealthy are powerful.
05:26They fund campaigns.
05:27They influence media.
05:29Many politicians come from wealthy backgrounds themselves or go on to careers in finance.
05:36Attempts to tax wealth or close loopholes are often branded as anti-business or class warfare.
05:43And yet, the public pays the price through underfunded schools, long NHS waits, unaffordable housing, and a crumbling social safety net.
05:54Is there an alternative?
05:56Yes, but it takes boldness.
05:57A wealth tax on assets over £2 million could raise billions.
06:03As proposed by economists at LSE and Warwick, closing the carried interest loophole would bring fairness to the tax system.
06:11Aligning capital gains with income tax would reduce inequality.
06:16Restoring funding to local services would rebuild communities.
06:19Countries like Norway, Sweden, and Denmark already tax wealth more effectively, without destroying growth or innovation.
06:29This isn't about punishing the rich.
06:31It's about building a fair economy.
06:34Conclusion.
06:35The economic rules we live by didn't appear out of thin air.
06:40They were made by choices, by policies, by people in power.
06:45If we want a fairer society, we need to rewrite the rules.
06:50That means holding politicians accountable, demanding transparency, and refusing to accept policies that serve the few at the expense of the many.
07:01Because a system built on inequality doesn't just hurt the poor, it weakens us all.
