Introducing a Wealth Tax
There are wide range of reasons for charging additional tax on those with wealth or income from investments (property, interest, dividends & others). These include:
- Ending the prejudice within the tax system against those who work for a living;
- Ending the incentive to avoid tax that so many people who use limited companies to offer their services, often in competition with those on PAYE, exploit at present;
- Increasing the effective rate of tax for those on higher incomes so that we have amore progressive tax system as moves towards income equality demands;
- Ensuring that those with the greatest capacity to pay do so;
- Tackling the wealth gap;
- Providing the resources required to provide public services to those most in need inour communities.
The taxation system requires reforms such as:
- An investment income surcharge be included in the income tax system that would increase the tax rate on the savings and investment income of higher rate taxpayers by 15%.
- Reforming capital gains tax to:
- Reduce the annual allowance
- Have the tax paid at income tax rates
- Abolish entrepreneur’s relief
- Improve tax compliance
- Restrict some inheritance tax reliefs in advance of more thorough-going reform to raise £0.5 billion a year;
- Review the long term possibility of a wealth tax.
French economist Thomas Piketty caused a sensation in early 2014 with his book on a simple, brutal formula explaining economic inequality: r is greater than g (meaning that return on capital is generally higher than economic growth). Here, he talks through the massive data set that led him to conclude: Economic inequality is not new, but it is getting worse, with radical possible impacts.
