Time for a Wealth Tax?
With tax rises inevitable, might the Chancellor reach for a wealth tax option to tackle the growing fiscal gap?
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We already have seven wealth taxes in the UK : IHT, CGT, SDLT, LTT, LBTT, ATED and Council Tax.
ATED and council tax are annual taxes based on the value of residential property , the others are transactional taxes based on the value of the asset being transferred.
Before inventing a new tax, look at the ones that exist already and ask why they are not achieving their objectives in terms of revenue raising or behaviour change. When you have answered those questions, come back and explain why we need a brand new wealth tax.
"..come back and explain why we need a brand new wealth tax."
Easy answer is because Gov needs the money.
Agree with Rebecca we have plenty taxes some not fit for purpose. I also agree with the article saying the people who will pay will be the middle class again. Too rich by far according to the left leaning and too poor when having to pay it but pay you will (My parents in Netherlands had to although my parents had barely enough to feed us). The rich will get clever people (like us?) to legally minimise or not pay at all.
On that basis I am againts it (Yes I would fall into the group too rich but too poor).
"it is a sad fact of life that the ultra-rich do not pay their fair share of taxes"
Care to tell us what their 'fair share' should be?
"In principle, this is a really easy tax to implement."
Is it? For many business owners their wealth is tied up in their business. They wouldn't have access to 1% of their wealth without having to dispose of part of their business. Are you proposing a 1% per year nationalisation? If I were lucky enough to inherit some multi-million pound work of art, should I be expected to chip or cut 1% off it each year?
"we currently have a Conservative government in office, led by a group that would almost certainly be very badly hit should a wealth tax be introduced."
Seems a rather political point to make. Are we supposed to believe that all Labour MPs are common salt-of-the-earth types with a 2 up 2 down and a 15 year old Mondeo sat on the drive (if they even have a drive)?
"it is a sad fact of life that the ultra-rich do not pay their fair share of taxes"
I agree - far too wide-sweeping a comment. Fairer to say that some of the ultra-rich di not pay their fair share of taxes. The same can be said for all wealth bands of course, but it does tend to be the rich that can afford the fees to set up tax avoidance schemes, many of which are subsequently blocked. Nevertheless, I disagree with the notion that someone should be taxed more just because they are fortunate to be better off than the rest of us. In my opinion, less objectionable to play around with tax rates and bands in respect of income and gains, rather than simply tax someone on the value of their wealth.
http://eprints.lse.ac.uk/42582/1/Why_was_a_wealth_tax_for_the_UK_abandon...
An interesting read for those interested in such things. It discusses the Labour Party's intention to introduce a wealth tax in the 1970s and its subsequent abandoning of the idea. For those short on time, Dennis Healy explained in 1989;
‘Another lesson was that you should never commit yourself in Opposition to new
taxes unless you have a very good idea how they will operate in practice. We had
committed ourselves to a Wealth Tax: but in five years I found it impossible to
draft one which would yield enough revenue to be worth the administrative cost
and political hassle.’
It's a stupid idea, admin nightmare, need thousands of pages of legislation........... therefore I wouldn't bet against it as it will resonate well with the areas Boris needs to level up.
Sir Keir 'Moaner' Starmer becoming PM isn't a feasible idea- all he ever does is moan at whatever the civil servants come up with and try and pin it on Ministers. When will civil servants be forced to resign when their plans come unstuck (A level result now up 40% as a consequence and Labour claim that's a victory...38% A* and A in maths is farcical).
As for another wealth tax it's completely impractical as it's doesn't take into account what that wealth is held in or the number of jobs created in the creation of that wealth.
It's just really the politics of envy that drives much left wing thinking (along with the entitled generation who think they deserve everything for no effort).