Latest post on Left Futures

Why is there not a wealth tax in the UK?

So President Hollande is increasing taxes on the super-rich, banks and big businesses this year by €7.2bn, about £5.7bn, and also making those with more than €1.3m pay a one-off levy this year. It is wildly popular with the French electorate, with three-quarters approving the squeeze on the rich, including a majority of right-wingers. In Britain by contrast there is no wealth tax, a mansion tax on houses worth more than £2m has been blocked, capital gains tax is at 28% far short of the 40% rate at which Thatcher left it, and the 50% income tax rate has been cut to 45%.

The case for a wealth tax in Britain has never been stronger – that wealth has reached stratospheric levels at the top, that at a time of prolonged austerity it is right and fair that all sections of the community should make a proportionate contribution, and that through massive tax avoidance the ultra-rich have been cheating for far too long. The May 2012 Sunday Times Rich List shows that there are currently 77 billionaires in Britain and 23 others worth more than £750m in the top 100, and a 1,000 richest persons all with wealth in excess of £71m. There are 2,000 with more than £34m each. Plenty of fat there to be taken in hard times.

Of course it will be said by the Tories, who get half their annual income from the banks and most of the rest from the big corporates and the super-rich, that these are the thrusting entrepreneurs on whom the future of the country rests. That’s not what the facts show. Of the 1,000 wealthiest, a quarter (238) inherited their wealth, they didn’t earn it. Nearly a fifth owe their money to property and land, certainly not from industry and exports which is what the country needs. Nearly a further fifth got their money in finance, which usually means financial engineering rather than lending to manufacturing and commerce in the national interest. And a sizeable number come from abroad, not out of any desire to contribute to the welfare of Britain, but in order to sponge off the country by enjoying the undoubted benefits of British life but paying no taxes on their world-wide earnings – the notorious non-domiciled clique.

A wealth tax, a mansions tax, a capital gains tax on the £155bn gains made by the richest thousand persons in the last 3 austerity years, and a 60% one-off levy on wealth or earnings over £1 million would be just as popular in Britain as in France. Why doesn’t Labour declare for it, particularly since it would provide the money to turnaround the economy and generate a million or more jobs as the foundation for growth which will be produced in no other way?

One Comment

  1. Alex says:

    What about a land value tax also?

    “capital gains tax is at 28%”

    It’s worse than this. So-called “Entrepreneurs’ relief” taxes capital gains at a rate of just 10%:

© 2024 Left Futures | Powered by WordPress | theme originated from PrimePress by Ravi Varma