UK (Parliament Politics Magazine) – Chancellor Rachel Reeves may target pensions or capital gains as alternatives to a wealth tax, which Labour ministers warn could drive the rich out of the UK.
As reported by GB News, Rachel Reeves may consider hitting pensioners with new taxes, while dismissing Labour left’s demand for a wealth tax on the UK’s richest elite.
She plans to reject backbench proposals for a broad tax on the wealthy, warning it may push them to relocate abroad.
What did a source say about Reeves’ tax plans?
According to a government source, Rachel Reeves will not support the wealth tax plan may still pursue measures such as capital gains or pension levies.
The source said,
“The problem is that if the Treasury start shooting down Kinnock’s proposal, they end up being boxed in. It’s not going to happen, but they can’t say that publicly.”
What did ministers say about Labour’s wealth tax idea?
Ministers have rejected the proposed wealth tax as a “non-starter,” warning it has failed to deliver results in other nations.
One added,
“Just look at what’s happened in other countries that have introduced them. “They just don’t raise money, certainly not the kind of money that we’re looking for.”
A senior cabinet minister said the wealth tax was “off the table,” stating,
“Wealthy people are mobile, they can move their assets to other more favourable jurisdictions.”
What did Lord Kinnock propose to fill Labour’s £11bn gap?
Former Labour head Lord Kinnock has called on the party to impose a 2% tax on assets above £10 million, a move supported by vocal backbench MPs.
He argued the wealth tax could bring in £11 billion to help fill what Ms Reeves has referred to as a budget “black hole.”
Mr Kinnock said,
“The appearance has been given that they are bogged down by their own imposed limitations. There are ways around that, ways out of it, pathways that I think people are willing to explore and actually would commend themselves to the great majority of the general public.”
He added,
“Now, you wouldn’t have to touch assets of under £6 million or £7 million, so people’s houses would be secure, obviously. But even by going for an imposition of 2 per cent on asset values above £10 million, say, which is a very big fortune, the Government would be in a position to collect £10 billion or £11 billion a year.”
What did Dan Neidle say about wealth taxes?
Labour member and tax lawyer Dan Neidle slammed wealth taxes, calling them “fantasy politics and lazy sloganeering,” and claiming they have raised only a “pittance” in countries where they have been tried.
He added,
“For a Government that says it prioritises growth, a wealth tax would be a counterintuitive move. People with a brain know it’s not going to happen. Anything you do which creates a hostile climate for investment has an impact.”
Which countries still impose wealth taxes?
Countries that currently impose wealth taxes:
- Colombia
- Norway
- Spain
- Switzerland
Nations that previously imposed wealth taxes but scrapped them:
- Austria
- Denmark
- Germany
- Finland
- France
- Iceland
- Luxembourg
- Sweden
What are Rachel Reeves’ plans for stealth taxes in the budget?
In her Autumn Budget, the Chancellor is expected to prolong existing “stealth taxes” for at least two more years. The move has raised concerns about the impact on middle-income earners.
Frozen tax thresholds through 2028 are causing wage increases to push more workers into higher tax brackets, increasing income tax burdens.
Ms Reeves plans to extend the tax threshold freeze to 2030, a move that could increase revenue by £7 billion, though critics argue it undermines Labour’s pledge to protect working-class taxpayers.
What did Number 10 say about Labour’s tax plans?
A Number 10 spokesperson said,
“We have raised money – the energy profits levy, taxing non-doms and air passenger duty on private jets – but this isn’t a bottomless pit and we must kick-start growth to get the economic stability that we need.”
What did the FBU say about Labour’s economic priorities?
Steve Wright, the general secretary of the FBU, stated,
“Introducing a wealth tax to fund public services, a generous welfare state, and workers’ pay must be a priority in the second year of a Labour government.”
He added,
“There’s overwhelming support for that approach within the Labour Party, trade unions and the electorate. The Prime Minister and Chancellor must abandon the welfare cuts and instead tax the super-rich as an alternative to the Tory austerity that was so decisively rejected by the electorate a year ago.”