LABOUR’S refusal to commit to introducing higher taxes on the super-rich will have infuriated many on the left as the party doubles down on its efforts not to spook businesses and wealthy voters.
Wealth taxes and more progressive rates of income tax on the rich are often key planks of left-wing parties’ policy platforms.
It is tricky to say exactly how much could be raised by raising taxes on very wealthy people, though most estimates put the figure above tens of billions.
Rachel Reeves (below), Labour’s steely shadow chancellor, said her party had no spending plans which would require them to boost Treasury coffers by hundreds of billions of pounds, telling the Sunday Telegraph: “We have no plans for a wealth tax.”
But suppose Labour did want to increase public spending on national infrastructure, the health service, or any number of items that might be high on their agenda if they form the next Government. We took a dig into the data to find out.
How much could a wealth tax raise?
The most extensive research on this topic carried out recently was conducted by the Wealth Tax Commission, which published its final report in December 2020.
Their research came amid the Covid pandemic in response to questions over how the Government intended to finance the massive debts it had accrued in funding furlough and other spending increases.
It recommended a one-off wealth tax, rather than taxing incomes or spending.
READ MORE: 'Labour abandoning everything they’ve ever stood for under Starmer', ex MP says
This means individuals would have their wealth assessed and taxed for a one-off sum if they were worth more than a certain amount.
According to the 2020 report, taxing individuals worth more than £250,000 at 1% of their worth annually for a period of five years would generate £387bn for the public purse.
This could be altered in various ways with a progressive regime – where the highest net-worth individuals paying more than their relatively speaking worse-off counterparts.
One model proposed by the commission found that a progressive regime taxing people worth more than £1 million would raise £249bn, while a broader sweep with raids on those worth more than £500,000 would raise slightly less at £248bn.
The report’s authors said that a one-off wealth tax would be better for the economy because it would “not discourage work or spending” when measured against other tax increases like raising income tax or VAT, for instance.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel