Is it time for a UK wealth tax?
UK may impose wealth tax
A targeted ‘wealth tax’ would be the best way to close UK government financial gaps created by the coronavirus, industry experts said.
They believe that instead of increasing income tax or VAT, the government should consider collecting funds from wealthy citizens..
Taxing these households an additional 1% above the £ 1m threshold could raise £ 260bn over five years.
Her Majesty’s Treasury&# 39; s Treasury) said it has already taken steps to ensure that the rich pay their share of taxes.
The pandemic has led to a sharp increase in government spending. This year alone government spent 280 £ billion to fight Covid-19 and support the UK economy, including £ 73 billion in job retention programs.
The Special Commission on Wealth Tax, a body made up of academics, politicians and tax practitioners, said the government should consider a tax for the rich if it intends to raise taxes in the country..
Such a move would be fairer than raising taxes on income, consumer goods or increasing insurance premiums, said the commission..
«We are often told that the only way to generate tangible tax revenue is through income taxes, insurance premiums, or VAT. But this is not the case. Politicians have many more options for replenishing the treasury», – the doctor thinks Arun Advani, Associate Professor, Warwick University.
There are visible signs that the coronavirus crisis has already increased income inequality.
A tax rate of 1% per annum could be imposed over five years on wealth over £ 1million for a two-person family, the Wealth Commission said.
This would be tantamount to a 6p increase in VAT or a 9p increase in the base income tax rate over the same period..
This week Argentina passed a similar tax to pay for medical supplies and relief measures amid the ongoing pandemic.
A targeted tax on high net worth individuals will not impede economic activity and will be very difficult to avoid by transferring money offshore or emigrating, the commission said..
The proposed tax will include all assets such as real estate and retirement funds, as well as business and financial condition, but will not account for debts such as mortgages.
«The trouble is that our current way of taxing the rich is too complicated, leading to evasion and resentment.. We need to reform it», – stated Emma Chamberlain (Emma Chamberlain) Tax Chamber Lawyer.
Doctor Andy Summers (Andy Summers), associate professor at the London School of Economics, said a one-off tax on wealth would work, generate significant revenues, and be fairer and more efficient than alternatives to bridging financial gaps.
Rebecca Gowland (Rebecca Gowland) of Oxfam thinks it’s immoral to force hard workers to keep paying for a crisis when it’s clear that «wealth tax» can solve a lot of problems.
but Madsen Peary (Madsen Pirie), president of the free market think tank of the Adam Smith Institute, said the tax proposal is contrary to what most people see as «fair business principle».
He said that the commission’s proposals boil down to «attempted petty theft in installments. Here are just the numbers they propose to charge people are pretty significant.».
«The cash in the bank is not deposited in dust collectors, it is invested. If we tax these investments, we end up with less output, which means lower wages, loss of pensions, and, as a result, a deterioration in the general standard of living.», – he added.
The Treasury said that «bringing people back to work, encouraging and encouraging businesses to hire new employees, ultimately creates the funds that fund our government services».