Wealth tax should be considered by Treasury, former Labour minister suggests
A former Labour minister has suggested a wealth tax should be considered by the Treasury, as she argued the UK Government must face up to the fact that a longer-term approach is needed.
Anneliese Dodds has argued it is “important” for the Government to consider evidence set out by the Wealth Tax Commission, which looked at whether such a tax would be desirable and deliverable in the UK.
In its final report, released in 2020, the Commission said a one-off wealth tax on millionaire couples paid at 1% a year for five years would raise £260 billion.
Eluned Morgan
Others in the Labour Party, including former leader Lord Neil Kinnock and Wales’s First Minister Baroness Eluned Morgan, have also called for a wealth tax.
Union leaders, including Sharon Graham of Unite, are also pressuring ministers to consider the move.
A tax on the wealthy has not been formally ruled out by ministers, but Business Secretary Jonathan Reynolds branded the idea as “daft” in June this year.
Ms Dodds resigned as a Foreign Office minister over the Government’s decision to cut overseas aid to fund a boost to defence spending in February.
Speaking to Sky News’ Electoral Dysfunction, she said work undertaken by the Wealth Tax Commission “has changed the debate”.
Operation
The MP for Oxford East added: “They looked at the operation of lots of different wealth tax. They looked at all of that evidence and set out how it would be possible to deliver something like that in a UK context.
“I would hope that the Treasury is considering that kind of evidence as well as other changes that have been put forward.
“We’ve seen the deputy leader of the Labour Party, for example, put forward suggestions. I think it’s important for all of those to be considered now.”
On Rachel Reeves’ approach to welfare, Ms Dodds said: “An attempt was made to deal with a quite immediate problem, but I don’t think you can, particularly via cuts, actually deliver the kind of fiscal room that is necessary.”
“It may make sense tactically, but strategically a longer-term approach is needed and that’s the the big issue that the Government has to face up to,” she added.
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A one-off retrospective haircut to fix what the blue team broke makes sense. It could be called the Cost of Cons Levy.
Daft idea.
Someone has to pay for Brexit
There are a lot here.
Silly stuff. Didn’t work for France so no idea why it would magically work for us. A subtle approach is required – make the rich feel that it is a decent, patriotic thing to do. Give them the chance to volunteer to pay a bit more. If you force them through legislation then they’ll find a way out of it.
Absolutely true such a tax has never worked anywhere.
Switzerland?
>> “A proportional wealth tax of around 0.3 to 0.5 percent is levied by the cantons on the net worth of natural persons. The tax is levied on the value of all assets (such as real estate, shares or funds) after the deduction of any debts.”
Source: https://en.m.wikipedia.org/wiki/Taxation_in_Switzerland
That is the only example you can come up with. A system impossible to replicate in the UK.
Why couldn’t it be done here? It just needs to be applied centrally by HMRC as most other taxes. The cantons aren’t relevant.
What’s interesting about this policy is that Switzerland still has a reputation for being pro wealth and pro business, despite this wealth tax.
Switzerland has no inheritance tax for direct descendants (children and grandchildren), unlike the UK where inheritance tax is the 4th highest rate in the world at 40%; and Switzerland has no capital gains tax on most assets. Thus, if you want to make the UK very unattractive to investors go right ahead and add a wealth tax to the menu.
So adding 0.3% isn’t going to make any difference to the UK’s reputation.