No tax rises

I will be extremely surprised if RR doesn’t put personal taxes up in the Autumn.

I don’t think she will risk putting up business taxes as that would be counterproductive to Labours grow the economy mantra.

I’ll be surprised if she puts personal taxes up

And if we levied a 3.5% wealth tax on the 156 UK billionaires who have £619.5 billion of wealth between them, it would raise £22 billion - coincidentally the same amount at the legendary black hole.

equalitytrust.org.uk/evidence-base/billionaire-britain-2025/

I don’t think income tax will be raised for the majority of working people, possibly for those on higher tax bands only.

Silverbrooks

And if we levied a 3.5% wealth tax on the 156 UK billionaires who have £619.5 billion of wealth between them, it would raise £22 billion - coincidentally the same amount at the legendary black hole.

equalitytrust.org.uk/evidence-base/billionaire-britain-2025/

That’s a good idea, but they’re far harder to target than pensioners or smaller savers.

Under the previous government the number of senior tax specialists who could do this kind of work has significantly reduced:

www.taxwatchuk.org/hmrc-skills-future/

I see no reason for pensioners to be a special case when it comes to tax rises. Over a million are already paying tax at higher rate.

New figures from HMRC, obtained under the Freedom of Information Act by LCP Partner *Steve Webb, show that the number of pensioners paying income tax at the higher (40%) or additional (45%) rate has doubled in just four years and has just passed the one million mark

*Former Pension Minister in the Coalition government

People were discussing Finland on another thread. I looked up some numbers from Price Waterhouse Cooper on tax rates in other jurisdictions. Someone in Finland with the equivalent income to someone in the UK working full time on minimum wage would be paying around a £1,000 more a year in income tax. They would also be paying 3% more for their equivalent of our NIC. I know little about living in Finland but all other things being equal, people in the UK are paying much less tax.

I wii, yet again, post the link toRichard Murphy’s ‘Taxing Wealth’ report which is full of easy ways to increase taxation on wealth through equalising taxes and making them more progressive.

He is not in favour of a ‘wealth tax’ as such because of the difficulty of pinning down this’wealth’ which can exist in many places and forms. His suggestions would be simple to implement and tend more to slow the rate of further accumulation of wealth.

taxingwealth.uk/wp-content/uploads/2024/04/Taxing-Wealth-Report-2024-Shorter.pdf

Reeves would have plenty of leeway with suggestions like his, without having to place any tax burden on the struggling and just managing.

We’ve seen the difficulty of pinning down this ‘wealth’ which can exist in many places and forms with inheritance tax on farmers.

The problem is that the wealthy are as reluctant to pay out extra in taxes as the less well off, but much more able to find ways to preserve their wealth.

That being said, was this pledge sensible from someone in charge of the country’s finances?
However, at the time she pledged there would be no additional tax rises beyond those already announced.

It’s definitely a tough spot with borrowing up and economic growth slowing, so some kind of tax adjustment feels inevitable despite past promises. I’ve started using Pie Tax (https://pie.tax/) recently to keep track of my personal taxes and income sources, especially with all this uncertainty. It helps to stay prepared, whatever changes may come.

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Casdon

I don’t think income tax will be raised for the majority of working people, possibly for those on higher tax bands only.

There are not enough people in the higher tax bands to produce enough tax. If the government wants to raise taxes and get a sufficient income from it, then everyone has got to contribute.

There are roughly 35 million tax payers in the UK and only 6 million pay higher rate taxes. Higher tax rate starts at an income around £50,000. All tax classes are bottom heavy so the majority of higher rate tax payers will earn £75,000 or considerably less.

It doesn’t work out like that though M0nica because proportionately higher income workers would pay more tax. 5% earn over £100k, which is equivalent to 3 workers on average salaries, as an example - obviously equivalent to more average salaries for higher earners.

MaizieD

I wii, yet again, post the link toRichard Murphy’s ‘Taxing Wealth’ report which is full of easy ways to increase taxation on wealth through equalising taxes and making them more progressive.

He is not in favour of a ‘wealth tax’ as such because of the difficulty of pinning down this’wealth’ which can exist in many places and forms. His suggestions would be simple to implement and tend more to slow the rate of further accumulation of wealth.

taxingwealth.uk/wp-content/uploads/2024/04/Taxing-Wealth-Report-2024-Shorter.pdf

Reeves would have plenty of leeway with suggestions like his, without having to place any tax burden on the struggling and just managing.

It has been rumoured for some time (under different governments) that pension tax relief would be restricted to the basic rate of income tax. The figure I've read before is £8 billion, but I see Richard Murphy reckons it would raise £14.5 billion. Not only would it raise money, but stop an unfair government subsidy to those who can afford to put more aside for a pension. I don't really understand why it hasn't already been restricted.

There are not enough people in the higher tax bands to produce enough tax. If the government wants to raise taxes and get a sufficient income from it, then everyone has got to contribute.

Have you read Murphy's Taxing Wealth report, MOnica?

Income taxes not the only tax and he proposes that there are plenty of sources of 'income' enjoyed particularly by the wealthy which are more lightly taxed than income subject to PAYE which could be drawn into a more progressive system of tax without any difficulty.

Tax payers are a pyramid the few at the top have many ways of holding on to wealth, trying to increase tax does not result in the revenue expected, in addition they can move to a lower tax country as well. To increase revenue taxation has to be from the majority of tax payers, there are many direct and indirect ways of doing that.

Last October Reeves committed to not increasing certain taxes, Income Tax, VAT, etc etc, there are many others, not to mention new taxes, I don’t think a wealth tax is desirable, but IHT maybe could be a target and why not a Gift Tax to catch those avoiding IHT so that all capital transfers are taxed.

I don’t think you’ve bothered to read the Taxing Wealth report, either, David.

I don’t believe in taxing wealth because most of it is tied up in business assets which are notoriously difficult to access.
Let’s take Musk as an example his vast wealth is tied to extremely volatile company shares, in addition he is buying and selling and reinvesting. Taking money out of businesses by taxing capital investment is a sure way of reducing their ability to grow, and the 3.5% that has been mentioned is ridiculous because many don’t make 3.5% return on capital.

I don’t believe in taxing wealth because most of it is tied up in business assets which are notoriously difficult to access.

FGS, read the report, David

Murphy would actually more or less agree with you. 'Wealth' as in business assets, or any other sort of asset, is extremely problematic to assess. Tax avoidance strategies are designed to make it so.

Murphy's proposals don't attempt to do this. Which you would know if you read the report.

David It is not true in the UK that most wealth is tied up in business assets - not in the form I think you mean, when a business owner produces something tangible.

A significant amount of wealth in the UK is invested in property, which distorts the UK economy in all sorts of ways. I read a report last year that banks were lending more money for property than they were for businesses. Property owners do, of course, set up businesses, but they're not the same as a factory producing widgets.

Property investment provides safer and bigger returns for UK investors, which diverts investment from businesses. It doesn't generate many jobs, which means there are fewer people to pay income tax, etc. A number of economists have written about the dangers of rentier capitalism (not necessarily in the Marxist sense) to society as a whole.

I'm not going to write a whole post about all the pitfalls. What I am saying is that it's a myth to claim all wealth is held by people who do something productive with it, which is why "trickle-down" economics fails.

growstuff

David It is not true in the UK that most wealth is tied up in business assets - not in the form I think you mean, when a business owner produces something tangible.

A significant amount of wealth in the UK is invested in property, which distorts the UK economy in all sorts of ways. I read a report last year that banks were lending more money for property than they were for businesses. Property owners do, of course, set up businesses, but they're not the same as a factory producing widgets.

Property investment provides safer and bigger returns for UK investors, which diverts investment from businesses. It doesn't generate many jobs, which means there are fewer people to pay income tax, etc. A number of economists have written about the dangers of rentier capitalism (not necessarily in the Marxist sense) to society as a whole.

I'm not going to write a whole post about all the pitfalls. What I am saying is that it's a myth to claim all wealth is held by people who do something productive with it, which is why "trickle-down" economics fails.

Business property is taxed by CGT on sale or by sale of companies or company shares rental properties are also taxed each year on income they produce. The government can change any of those rates as it see fit, a wealth tax would be counter productive.
Tax allowances (or avoidance) as you choose to put it are deliberately there to encourage investment in that sector, again they can be changed, as we have seen this year with the 20%IHT on farmland.
It is so easy for high wealth individuals to pay tax in Switzerland or US or Monaco, that I simply don’t believe targeting them is going to increase revenue. Although I do believe that envy is good reason to try.

Maisie

I did read the short version of Murphys report and as you said I do agree with most of it there are far too many allowances that are too generous, the government can and I hope will change that.

I am dead against a “Wealth Tax” based year by year on a fixed % of assets

I am dead against a “Wealth Tax” based year by year on a fixed % of assets

In which case, we appear to be singing from the same hymn sheet, even if for slightly different reasons David

Perhaps Murphy's report is misnamed. Perhaps it should be 'Tax to prevent excessive accumulation of wealth'?

to return to the topic. I do think that if some (not necessarily all) of the measures advocated by Murphy were adopted it would vastly increase the tax take and keep the pressure off 'ordinary' tax payers who aren't able to avoid tax in any way. It might make them more likely to spend into the economy, too, if the fear of having to pay increased taxes is removed.

I think that fear is very real, reinforced by commentators, such as those the OP cited, reverting to 'Sh'ell have to raise taxes to pay for it' without thinking of other alternatives... Probably without even being aware of other alternatives..

The problem has been that the Tories have skewed the tax allowances, grants and subsidies to benefit their voters at the expense of working people, it’s been gerimandering on a massive scale.
Several schemes have been shut down prematurely, more will no doubt get axed

David49

growstuff

David It is not true in the UK that most wealth is tied up in business assets - not in the form I think you mean, when a business owner produces something tangible.

A significant amount of wealth in the UK is invested in property, which distorts the UK economy in all sorts of ways. I read a report last year that banks were lending more money for property than they were for businesses. Property owners do, of course, set up businesses, but they're not the same as a factory producing widgets.

Property investment provides safer and bigger returns for UK investors, which diverts investment from businesses. It doesn't generate many jobs, which means there are fewer people to pay income tax, etc. A number of economists have written about the dangers of rentier capitalism (not necessarily in the Marxist sense) to society as a whole.

I'm not going to write a whole post about all the pitfalls. What I am saying is that it's a myth to claim all wealth is held by people who do something productive with it, which is why "trickle-down" economics fails.

Business property is taxed by CGT on sale or by sale of companies or company shares rental properties are also taxed each year on income they produce. The government can change any of those rates as it see fit, a wealth tax would be counter productive.
Tax allowances (or avoidance) as you choose to put it are deliberately there to encourage investment in that sector, again they can be changed, as we have seen this year with the 20%IHT on farmland.
It is so easy for high wealth individuals to pay tax in Switzerland or US or Monaco, that I simply don’t believe targeting them is going to increase revenue. Although I do believe that envy is good reason to try.

David You've quoted my post, but I'm not sure you're replying to it.

I wasn't referring to business property, but ordinary residential property, in which billions of pounds are invested in the UK, often by very "ordinary" people. The point is that it doesn't generate money in the same way as money invested in business does. It skews the UK economy and society.

I didn't even mention tax avoidance, so I'm not sure what you're going on about.

As for your reference to envy ... are you sure you weren't replying to some other post?