The legacy of austerity from 2010-2019 has left UK's public finances in disarray, complicating the new Labour government's efforts to stabilize the economy, deal with debt and improve living standards
The VAT on private schools is - if we're honest - an obvious wealth tax, as is the announced plans for inheritance. But I think the real solution, as the IMF and IFS both point out, is the UK urgently needs economic growth. And fast, so taxing wealth creating businesses might not be a good solution (so I sort of approve of Labour going after inheritance and private schooling with VAT rather than businesses with greater corporation tax)
Oh, I do agree there is wealth not being taxed. I read this Oxford Journal Article: 'How much tax do the rich really pay? Evidence from the UK'
To put a long story short, these academics found that only a quarter (yeah, only a quarter) of the top 1% actually pay the 'headline' tax rates.
So there is clearly wealth that isn't being taxed at headline rates thanks in part to inequitable reliefs built-in for the super-earners. So if you're asking me should Labour target the 1% by ending these reliefs and designing policies crafted to end this inequity then 100% agreed.
"We highlight three main findings. First, consistent with anecdotal evidence, EATRs[effective average tax rates] are declining at the top of the income distribution. The mean EATR peaks at 38 per cent for individuals with remuneration (taxable income plus realized capital gains) of £500,000, and then declines to less than 30 per cent above £3 million, at least 17pp below the ‘headline’ average rate: the statutory rate that applies to earnings from employment (47 per cent). When considering only income, the mean EATR does not decline, but remains flat at 42 per cent on incomes above £1 million."
You would think she would do the obvious and tax wealth. The SNP have done it without any of the doom predicted by the media.
The VAT on private schools is - if we're honest - an obvious wealth tax, as is the announced plans for inheritance. But I think the real solution, as the IMF and IFS both point out, is the UK urgently needs economic growth. And fast, so taxing wealth creating businesses might not be a good solution (so I sort of approve of Labour going after inheritance and private schooling with VAT rather than businesses with greater corporation tax)
Come on, the VAT on private schools will raise less in the entire UK than the income tax changes have raised in Scotland alone.
Oh, I do agree there is wealth not being taxed. I read this Oxford Journal Article: 'How much tax do the rich really pay? Evidence from the UK'
To put a long story short, these academics found that only a quarter (yeah, only a quarter) of the top 1% actually pay the 'headline' tax rates.
So there is clearly wealth that isn't being taxed at headline rates thanks in part to inequitable reliefs built-in for the super-earners. So if you're asking me should Labour target the 1% by ending these reliefs and designing policies crafted to end this inequity then 100% agreed.
"We highlight three main findings. First, consistent with anecdotal evidence, EATRs[effective average tax rates] are declining at the top of the income distribution. The mean EATR peaks at 38 per cent for individuals with remuneration (taxable income plus realized capital gains) of £500,000, and then declines to less than 30 per cent above £3 million, at least 17pp below the ‘headline’ average rate: the statutory rate that applies to earnings from employment (47 per cent). When considering only income, the mean EATR does not decline, but remains flat at 42 per cent on incomes above £1 million."
(https://academic.oup.com/oxrep/article/39/3/406/7245704)