As the Guardian has reported:
The Labour party has been drawing up options for how it could raise money through extra wealth taxes to help rebuild Britain's public services if it wins the general election, according to sources who have spoken to the Guardian.
The proposals under consideration include increases in capital gains tax (CGT) that could raise £8bn.
I am hardly surprised. Of course, they are looking at such taxes. They have to. As I showed in the Taxing Wealth Report 2024, the capacity to raise additional tax from the wealthy because of the massive under-taxation of income and gains from wealth in the UK is enormous.
I am not suggesting for a moment that Labour should add all the recommendations and suggestions that I made in that report. It does not need approximately £90 billion of additional tax revenue, although massive new funds for investment would not go amiss. Instead, the report provides a wide range of options for raising additional tax revenue from which Labour might choose.
Will Labour have the sense to do this?
Will it embrace the tax justice implicit in those recommendations, many of which are meant to be redistributive?
Or will it listen to the voices of offshore tax advisers suggesting that their clients might (I note, 'might') leave the UK?
Alternatively, might they note a report in the FT which says:
US millionaires have signalled their support for Joe Biden's push to make the wealthiest Americans pay more tax, in a sign that the president's plan to impose bigger levies on extreme wealth is playing well with the country's upper-middle class.
A YouGov poll of Americans with assets other than their home worth more than $1mn showed that a majority supported a more progressive US tax system, one of the tenets of Biden's economic strategy for re-election in November.
The wealthy are not as opposed to more tax as many deeply self-interested advisers might claim.
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Like almost any category of people, “the wealthy” are much more diverse than the stereotype suggests.
I suspect you and a fair number of your readers have incomes significantly above the UK median of about £35k now (£44k in London). Anyone who owns their own house (UK average about £300k now) is likely to be wealthy by some metrics.
Even if we limit ourselves to the 1% – annual income over about £180k, or asset over about £3.5 million – there will be a wide range of views
and many perhaps most people will accept that those with the most money should pay the most taxes, and that the UK’s public services need significant investment.
The likes of Patriotic Millionaires have been advocating for higher taxes on the wealthy for some time. They have their own proposals to raise more taxes, some very similar to yours. https://patrioticmillionaires.uk/latest-news/policy-recommendations-2024
I have income above that figure and we own our own home – as pensioners.
As a recent-ish convert to MMT, I think we need a language overhaul. Richard refers to ‘revenue’ above to describe the money gleaned from the wealthy. Surely this is old-speak? A term closer to waste-disposal would seem more appropriate. Am I missing something? After we spend extra billions on the NHS etc, we then remove excess money from those that have the most to control inflation. Seems self-evident to me now, but to describe that money as revenue is surely the wrong label? When describing, as best I can, MMT to my chums, I could do with a language not designed for tax-and-then-spend.
But it is revenue, to cancel inflation
A word such as ‘recoups’, perhaps?
Neat, but will people get it?
I’m confused. Why do you say that the government needs more taxes for investment when you also say governments don’t need to tax in order to spend?
To cancel the inflationary consequences of spending
Anas Sarwar (Scottish Labour leader) and Douglas Ross (Scottish Conservative leader) have been interviewed on BBC Radio Scotland by Martin Geisler. Both Sarwar and Geisler found themselves in a frightful mess over energy, because neither of them appear to understand the subject. They became bogged down in GB Energy, because it is a policy fudge that does not address the real problem; the structure of the domestic energy market that forces consumers to be exposed to paying world market prices for their energy, when a substantial proportion is supplied by renewables, at a fraction of the cost of world markets. This should worry voters.
Sarwar was even worse on immigration. He is prepared to reduce immigration in the NHS, and retain the ‘two child’ benefits cap, but clearly has no understanding whatsoever of the scale of Scotland’s existential demographic crisis. He thinks there is a pool of available labour in Scotland, that simply doesn’t exist. The Scottish fertility rate is 1.3 births per woman. The population replacement rate is 2.1 per woman. Scotland is far below even replacement population – the shortfall against even replacement is 38%, we are on an extinction curve, and it is coming very, very fast down the track. Voting for Conservative or Labour immigration policies is a vote for the destruction of Scotland’s future: stone dead.
Sarwar is a weak thinker, and out of his depth.
Geisler effectively eviscerated Douglas Ross, but took pity on him and refrained from the ‘coup de grace; and let him waffle his way, spouting irrelevant sound-bite platitudes, as he limped to the end of the interview. He was also saved by a lag in the sound connection. Douglas Ross was eviscerated, but untroubled by the predicament, or the fact that nothing he defends makes any coherent sense. I presume that is because in having two lifeboats available as he departs the sinking ship (a continuing seat and salary as an MSP, if he fails to win the seat he is fighting as an MP), he has taken care of the only thing that really matters; his career.
Indeed.
Scotland is in a dire situation, post G.E., if the Scottish electorate don’t wake up to where Westminster is taking us.
Richard, you are proposing taxes of the wealthy, based on your Taxing Wealth Report. I know you may criticise me here for pedantry, but I believe your framing of this as “going for wealth taxes” as potentially very confusing; because on May 10th you wrote a Blog titled “Wealth taxes won’t work”: because, as you rightly emphasise: “as I’ve shown in the Taxing Wealth Report, if we have a truly progressive tax system that does genuinely increase tax rates as people’s income rises, and if we overcome some of the stupidities in our tax systems as well, which means that things like income from wealth are not subject to the equivalent of national insurance charges, which they aren’t at present, but which people who earn their incomes from work have to pay, and if we equalise the tax rates on capital gains and income, as well as having decent progressive inheritance tax rules that have limited or no allowances for business assets because there is frankly no reason why the billionaires of the world need to have allowances for their business assets which reduce the tax charge on them when they pass them to the next generation, then we could have truly significant increases in the tax charges on those people”.
Given that most people have low attentions spans, and look for the short answer – I don’t think your choice of words helps the important case you make.
So what would you call what I am doing?
The Fair Taxation Report.
Subtitle, if it is felt necessary; how to tax the wealthy fairly (without chasing the untaxable scarlet pimpernel of wealth).
I fear that’s too late now, John
Okay, point taken; but not too late, I still think – with the wider public. All that people actually crave is fairness and straight dealing.
It has been in Twitter far too long to be renamed.
I judge that the necessary question you have posed to ‘Labour’ here is, to a significant extent, a direct result of the ‘Taxing Wealth Report 2024’ combined with the brilliant publicity that you and your team have given it – together with your podcasts.
Your astonishing energy and commitment, along with your optimism, have changed public discourse about these matters as you hoped and intended.
So many people have now read bits of the report, or heard about it or at least seen its title, that politicians cannot go on speaking as if there are no funds available; they cannot, with a clear conscience, ignore widespread poverty or lack of affordable housing.
It is no longer logical for any of them to go on speaking as though a) Ever increasing inequality is inevitable; b) Universal public services are unaffordable – unless they are privatised (so that they are not universal).
The billionaires and press magnates will want to ignore the climate disasters that are occurring on every continent – including North America but they must be coming to see that, for the benefit of themselves and their descendants, carbon dioxide emissions must be cut everywhere – and they must be cut fast. To do that will require every nation to be viewed as a partner and a participant in a worldwide endeavour.
Your work helps make that possible.
Thank you.
Thanks Joe
Bizarrely, it’s quoted on GB News tonight
It is being read