It now seems likely that Rachel Reeves will avoid the ignominy of becoming the first chancellor in more than half a century to raise the basic rate of income tax in her budget next Wednesday (Rachel Reeves plans £7.5bn tax rise in budget after U-turn on income tax rates, 14 November). That doesn’t mean we taxpayers won’t be hit elsewhere in the budget, though, including the possibility of stealth taxes through changes to thresholds.
But there is another option – one that is fair, popular with the public and supported by a significant number of Labour MPs: a wealth tax. Introducing a 2% tax on assets above £10m would raise up to £25bn annually to invest in health, housing, education and infrastructure. Polling shows that the idea is consistently popular with the public, and the people most likely to pay the tax, millionaires, also support the idea.
Taxpayers Against Poverty campaigns to reduce poverty and inequality through practical and fair economic policies. We believe that one of the clearest ways to do this is by modernising the tax system so that wealth is taxed more and income is taxed less.
More than 50 MPs have now signed early day motion 1725, which calls for the government to consider proposals for a fair wealth tax ahead of the budget. Privately, many more Labour MPs have been telling us that they support a wealth tax, but don’t feel able to add their name publicly, due to party diktats.
The government seems intent on preventing open discussion of the merits of a fair wealth tax despite its popularity among the public and its own MPs. By doing so, it is missing an opportunity to genuinely reform the UK’s outdated tax system – reform that would see excessive wealth accumulated by the few, but created by us all, reinvested to reduce poverty and inequality, and boost economic growth.
Tom Burgess
Chief executive, Taxpayers Against Poverty
