Wealth Taxes – 3 November 2022


“It’s the poor that gets the blame, it’s the rich that get the pleasure” were lines from an old Music Hall song but still ring true today. It’s why a wealth tax and higher taxes on the wealthy are long overdue. I’ll not hold my breath for them with a Prime Minister who’s the richest man in Parliament and a Chancellor that’s likewise a millionaire. But they can and should be done, along with Windfall taxes on corporates.

The price for the rush to the Tory low tax Valhalla is going to be paid by the poor and middle-income earners not the wealthy. If, as seems likely tax allowances are frozen then many more face paying tax with low earnings and those already paying will see their burden increase. All this when the cap on bankers bonus has been lifted and taxes remain focussed on income not wealth.

It’s the PAYE earner not the privileged with land and assets that are paying the price. Why should income tax be higher than that on dividends? It’s simply encouraging evasion by the few. Tony Blair’s former Health Secretary Alan Milburn recently took several millions in dividends from his consultancy business. He’ll pay far less in tax than even many high-income earners. That’s just not right or fair.

I recently attended a briefing at Parliament on a wealth tax. It could recoup as much as was taken from the increase in NIC. It would see those with net assets of over £10 million pay one percent. That would apply to only 22,000 people, hardly impoverish them but it would ease the pressure on millions struggling to survive or pay their mortgage.

As the very learned Lord Prem Sikka says there are issues with that as checking, enforcement and capital flight are possible. But there are stages, as he says, where information is clear on wealth. Death, land and asset sale and share transactions are all recorded and verifiable. Similarly, ending the abuses of Trusts hiding wealth and avoiding taxes should be targeted.

The Music Hall song was Victorian or even Edwardian. It’s time taxes were appropriate for the 21st Century and that means on wealth not just income and with the greatest burden borne by the wealthy not the poor.