Introducing a Wealth Tax
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.