Latest news with #wealthtax
Telegraph
2 days ago
- Business
- Telegraph
Starmer's former transport secretary calls for wealth tax
Sir Keir Starmer's former transport secretary has called for Labour to break its manifesto promises and introduce a wealth tax to pay for higher spending. Louise Haigh – who quit the Cabinet in November after it emerged that she had misled police a decade ago – urged her former colleagues to 'rip up our self-imposed tax rules and deliver a proper wealth tax'. She said such a tax would provide 'the means to invest in the NHS, schools, and our communities'. Ms Haigh's intervention – the most radical proposal yet from a senior party figure – is the latest call from the Labour Left for Rachel Reeves to raise taxes rather than cut spending as she grapples with a worsening fiscal crisis. Speaking at a conference organised by Compass, a Left-wing Labour pressure group, she said: 'We must acknowledge that our tax system is perverse. It punishes earned income but barely touches the real driver of inequality, wealth. 'If we do that, we can finally move beyond a broken model where working people's wages are topped up by tax credits and benefits, leaving bad employers and landlords to profit. We can move from a system of handouts for the rich to real investment for everyone else.' Labour is grappling with a worsening fiscal situation, backbench rebellions and tanking approval ratings as Nigel Farage's Reform UK surges in the polls. Ministers continue to tussle with the Chancellor over potential cuts to departmental budgets as part of the spending review. The Treasury blocked bids for more money from a number of departments, including a request from Angela Rayner for a larger social housing budget. Last month, the Telegraph revealed that, in a private memo to the Chancellor, Ms Rayner had called for a raft of tax rises before the Spring Statement, and internal pressure on Sir Keir has led to a U-turns on cuts to the winter fuel allowance. In last year's General Election manifesto, Labour pledged not to raise National Insurance or income tax if it got into government. At the October Budget, Ms Reeves raised National Insurance contributions for employers in order to raise £25 billion in taxes. The party claimed the move did not break its manifesto promise. The Chancellor is now grappling with a further puzzle as the Government signalled that it would reverse, in whole or in part, both the cut to the winter fuel allowance and the two-child benefit cap. Such a move is projected to cost the Treasury up to £5 billion. The Government is also facing a large backbench rebellion against planned cuts to disability benefits, which were intended to raise around £5 billion a year in revenue. Any softening of the welfare cuts to appease Labour MPs would increase Ms Reeves's difficulties if she is to stick to her fiscal rules and keep her manifesto commitment not to raise taxes.
The Guardian
2 days ago
- Business
- The Guardian
Labour spending review must be ‘economic reset', Louise Haigh to say
Next month's spending review must be an 'economic reset' based on a bold wealth tax and higher public investment, the former cabinet minister Louise Haigh is to argue, as Keir Starmer faces renewed pressure from within Labour to change course. Haigh's comments come as Andy Burnham called for Labour to 're-establish itself unequivocally once again as the party of working-class ambition' with ambitious offerings on housing and education. Burnham, the mayor of Greater Manchester, will say ministers should allow mayors to build on public land, and set a target for the point at which more new social homes are being built than existing ones are sold off. Haigh and Burnham will make their interventions in speeches at an event taking place on Saturday organised by the Labour-allied thinktank Compass. Haigh, who quit the cabinet in November after it emerged she had been convicted of fraud over a missing work phone, will reiterate her call for a wealth tax after the local election results from 1 May, which she called 'a warning' from voters that they wanted bolder policies. She will say: 'The spending review must be a moment for an economic reset. I welcome the prime minister's review of winter fuel changes but we must go further, ripping up our self-imposed tax rules and taxing the country's vast wealth.' Haigh will say the current tax system 'punishes earned income but barely touches the sides of the real driver of inequality – wealth'. It is time to 'finally move beyond a broken model where working people's wages are topped up by tax credits and benefits, leaving bad employers and landlords to profit', she will say. 'It's about moving from a system of handouts for the rich to real investment for everyone else. We need real reform: a proper wealth tax that rewards work, closes loopholes and finally gives us the means to invest in the NHS, schools and our communities.' According to extracts of his speech released in advance, Burnham will say the spending review 'will define the rest of this parliament', and he will call for Labour to focus on ways it can positively combat the electoral threat from Reform UK. Burnham will say: 'Rather than standing for the status quo, the time has come for the party to re-establish itself unequivocally once again as the party of working-class ambition, shedding the perception in the Midlands and the north of a London-centric, university-oriented party.' This would require a particular focus on housing and education, to particularly address 'the single biggest cause of Britain's modern malaise: a housing crisis caused not by immigration but by ideology'. The Thatcher-era right-to-buy policy, without investment in new social homes, 'shattered the foundations on which generations of working-class British families built better lives', Burnham will say. 'Labour's clarion call should be to free Britain from the grip of the housing crisis. In this spending review, working with mayors in the big city regions, it should set the date by which each will reach the crucial tipping point of building more social homes than they are losing. 'This is the moment when, instead of tightening its grip, the housing crisis starts to ease. To do that, the spending review should unlock public land for mayors to use to build a new generation of council homes at pace – akin to the drive of the postwar Labour government.' Angela Rayner, the deputy prime minister and housing secretary, has already announced plans to restrict right to buy and has pushed for more investment in social homes, but as yet this has done little to ease the housing crisis. Other speakers at the Compass-run event will include Mark Drakeford, the former first minister of Wales, the Labour MPs Rachael Maskell and Simon Opher, and the junior energy minister, Miatta Fahnbulleh.
Daily Mail
5 days ago
- Business
- Daily Mail
Radical fringe party vows to haunt Anthony Albanese as it unveils ambitious plan
Victoria's leading socialist party will expand nationwide in hopes of reviving the country's political left and holding Prime Minister Anthony Albanese accountable. Founded in 2018, the Victorian Socialists decided at a recent meeting of the party's executive to rebrand as a nationwide party - starting with a proposal to shorten its name to 'The Socialists'. The party will aim to achieve registration across all states and territories - joining only the two major parties, the Greens and the Animal Justice Party in doing so. Given the opportunity, the party claimed it would abandon tax breaks for Australia's wealthiest individuals and businesses and redistribute wealth to the working class. It would establish a public builder to construct one million new units of public housing over ten years, a renationalised Commonwealth Bank, a publicly-owned power grid and a wealth tax on billionaires. Recent VS senate candidate and squatter's right's activist Jordan van den Lamb told Daily Mail Australia the party hopes to hold the Labor leader accountable. 'In the 19th century Marx talked about how communism was a "spectre haunting Europe",' he said. 'We hope to be a spectre haunting Albanese - both by arguing for a socialist vision of society that's better and fairer than anything Labor is offering, and by reminding him of the ideals that he, as someone who historically stood on the left wing of the Labor Party, once held and which he has failed to live up to as Prime Minister.' Former senior Howard government advisor and political consultant Terry Barnes said Mr van den Lamb appeared to be suffering 'delusions of grandeur'. 'Marxism has turned out to be a discredited ideology so, if they want to stick on the fringe and have delusions of grandeur, good luck to them but they're not going to change Australian politics one iota,' he said. Andrew Carswell, who served as press secretary to former Prime Minister Scott Morrison, agreed, adding the party would struggle to rival existing minor parties. 'It's very difficult to emerge from being a fringe protest party to a legitimate national minor party. Very few groups have managed to do that,' he said. 'They've either done it through longevity, like One Nation, or they've done it through money like Clive Palmer.' He said the rebranded party would be lucky to secure a one-and-a-half per cent share of primary votes in a federal election in three years' time. Mr Barnes was only slightly more optimistic. He claimed a victory for the rebranded party might resemble a five per cent primary vote in a federal or state election in coming years. VS spokesperson James Plested said the expanded party hoped to deliver the changes Labor was unwilling to make. 'We were happy to see Dutton and his Liberal Party smashed, but we know Labor isn't going to deliver the kind of change Australia desperately needs,' he said. 'There's a class war going on in this country, and both Labor and the Coalition have, over many years, been waging it against workers and the poor on behalf of the capitalist class and the rich,' he said. Earlier this month, the Victorian Socialists secured swings in a number of lower house seats including in the north Melbourne seats of Cooper (4.9 per cent) and Scullin (3.7 per cent). In a number of booths in both electorates, the party secured primary vote shares of between 15 and 20 per cent - a significant improvement on year's past. But Mr Carswell and Mr Barnes said the seven-year-old far-left party will face an uphill battle building on gains in their home state, let alone extending the results nationwide. 'If they're struggling to pick up a good trend towards them in Victoria, then they're going to struggle elsewhere,' Mr Carswell said. 'You would imagine there would be a higher proportion of people that are sympathetic to their political views in Victoria than there will be elsewhere.' Both agreed socialism was a hard sell in Australia. Mr Carswell said the first thing the party should do is drop the word 'socialists' from its name. 'If they're using that name at the national level and they're getting one to one-and-a-half per cent, I think that's what they should be potentially shooting for,' he said. Asked how the initiative should be judged three years from now, Mr Plested said: 'Our strength is in our volunteers.' 'For us, that is the key metric: how many people have contributed to our campaign? How many of them remain active in between elections?' But, as Mr Plested insisted, the Victorian Socialists is more than a protest party and, certainly, more than an organiser. If all goes according to plan, votes will follow.
The Guardian
6 days ago
- Business
- The Guardian
Fair taxation is about more than bashing the rich
You are right that wealth needs to be taxed more fairly (Editorial, 23 May), but the proposed solution from Tax Justice UK that you promote is too simplistic. Taxing assets above £10m sounds a nice way to restrict the pain to a very small number of people, hence its 78% support among the public. But the experience of other countries is that a wealth tax on the super-rich simply doesn't work (the IFS has many excellent articles on the subject). Wealth does need to be taxed more fairly, and equalising capital gains tax with income tax would be a good start – easy to administer and yielding significant revenues. Making council tax fairer would result in a massive redistribution of wealth. And middle-income earners – the biggest segment of taxpayers – will need to pay higher taxes. Only the first of these is politically straightforward – the other two would need a much greater consensus around solidarity and fair contribution than exists in Britain today, and politicians need to start laying the groundwork for that now if the tax system is to be made CraigLondon It is inarguable that Britain's economy has, as you say, become 'a machine for the upward redistribution of wealth' – a dynamic surely fuelling the fear-driven rightward drift of our politics. Yet contemporary surface trends alone cannot explain this volcano of discontent. A surprising amount of inequality remains rooted deep in mercenary medieval violence, bequeathing us a land ownership pattern that never seems to change. So, of course, as long as our public realm is threadbare, target the newly income-wealthy, but do not forget to tax the hoarders of these unearned historical assets (eg through land value tax). And never permit the affluent and privileged to criticise our struggling public services while arguing for tax cuts for their Brendan HillEdinburgh What is the purpose of a majority of British people being in favour of a wealth tax when too many non-productive UK billionaires dictate and control our trickle-up economy to their advantage? Is it ignorance, fear and cowardice that diverts the minds of too many parliamentary leaders and economists away from fairness and decency? Tax Justice UK is correct. A relatively modest wealth tax would enable practical moves towards equality, not least for students and staff in further and higher education. The government needs to give moral leadership, and here are policies for meaningful ways JonesEmeritus professor, Brunel University of London Your editorial ignores three factors: wealth is reinvested (alienate it and there is less to sustain our economy); inheritance and wealth taxes amount to double taxation (they are major disincentives to the wealth creation on which high-spending economies depend); in terms of the first tranche of taxation, that on income and in terms of 'who pays the bills', the top 1% pay 30% of income tax, the top 10%, 60% and the top 50%, 90%. Better public services depend on the encouragement of wealth creation, not its BiesterfieldEglingham, Northumberland The reason we have so many billionaires (and such an egregiously skewed distribution of wealth) is simply that our political parties depend on, and are beholden to, their billionaire MarksTring, Hertfordshire Have an opinion on anything you've read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
The Guardian
6 days ago
- Business
- The Guardian
Leading tax expert calls out ‘confected outrage' of wealthy Australians over Labor's $3m super plan
The man who wrote the history of tax reform in Australia has called out the 'confected outrage' surrounding Labor's plan to trim concessions for wealthy Australians with super balances over $3m. Paul Tilley, the author of Changing Fortunes and a former senior Treasury official, said it was 'well understood' that there were equity issues within the super system that needed to be addressed. 'The problem is high-income earners would have to pay more tax, and they don't like it. This confected outrage is just because when you have a big tax concession and you pull it back, of course those who are benefiting from it are going to scream,' he said. Since Labor's thumping election victory, there has been a campaign in major newspapers attacking the proposal, which will place an additional 15% tax on earnings on amounts over the $3m threshold. Sign up for Guardian Australia's breaking news email The bill, which will need the support of the Greens in the Senate, will affect the largest 0.5% of super balances, or about an estimated 80,000 people, and still leave highly favourable tax treatment for those affected. A Grattan Institute study concluded that 'tax-free retirement earnings turn super into a taxpayer-funded inheritance scheme'. Despite its modest scope, the proposal has been met with claims that, among other things, it will crush entrepreneurship and make Australia 'uninvestable'; force farmers to sell their farms; and undermine the clean energy transition. The lead authors of the two most recent major inquiries into the superannuation system this week warned the 'hysterical' criticism of the plan risked undermining the case to make necessary changes aimed at making the super system more equitable and sustainable. One of the main points of contention is that the policy would apply the additional tax based on the notional change in the value of super balances during the financial year – an unusual arrangement in the tax system, that levies cash rather than 'unrealised' profits. There have been warnings that those with farmland or business property in their super, typically in the subset self-managed funds, would be forced to sell to raise the money to pay the annual tax. But Tilley dismissed concerns around taxing unrealised gains in super, saying it was 'not a problem', and that from a tax economist's point of view, was in fact the correct way to go about it. 'I don't think they [taxes on unrealised gains] are bad at all. The conceptually correct way to tax capital gains is on an accrual basis. We don't do it because the measurement and cashflow issues are a practical constraint. But in this case those measurement issues don't exist,' he said. 'The cashflow can be managed in the Apra-regulated funds. It's more of an issue in the SMSFs (self-managed super funds), but I don't think they are insurmountable.' Tilley described Labor's measure as 'just a very crude way to try to tackle the problem' of overly generous super tax breaks at the top end. 'What you would like to do if it were administratively possible – and that's a big if – is tax the earnings at an individual's marginal tax rate minus 15-20%,' he said. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion Another concern among experts is that the policy in its current form would not be automatically adjusted each year for inflation or wages growth, which means it would progressively catch more Australians within its net. While Tilley described this as a 'side issue', many experts believe the bill should be amended to reflect this automatic adjustment. David Knox, a former senior partner at Mercer and one of the country's most distinguished actuaries, said he endorsed Labor's proposal in the name of fairness, but said he would prefer the $3m to be indexed. 'Those with lots of super benefits get a very good deal from the tax system and we want the system to be fair, and I think, therefore, it's appropriate that some form of extra taxation is applied to those with what I would call excessive benefits,' Knox said. 'On the unrealised gains I understand the issue, but I think one has to recognise we have to have a system or an operation that is relatively do-able and that can be applied,' he said. 'I think it is worth it just to get the worst of the excesses out of the system. Over time we have capped how much people can get into super, so this is a little bit of a legacy issue.' Knox said that when it came to major overhauls of the system, international best practice was to not tax contributions and earnings in the accumulation phase, but then to tax income in retirement at the marginal rate. 'The better reform is to tax super benefits when received in retirement,' he said. 'Another option or way forward would be for the government to say you are not allowed to have more than $3m or $5m in super, and if you do, you have to take it out.'
