Wes Streeting has called for a massive hike in Capital Gains Tax as part of his pitch for the leadership. Or the highest office possible under Burnham…
Streeting complained to the BBC’s Political Thinking podcast about the tax system and proposed a “wealth tax that works“:
“A member of my family is a cleaner in Lancashire. She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in. She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry.
The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work. We can do it in a way that is pro-growth, pro-entrepreneur and pro-work.”
The former Health Secretary, who gave his resignation speech in the Commons yesterday, has misunderstood capital gains, which are not income. International evidence (and UK evidence) shows that when CGT rates go up revenues go down…
Streeting’s proposal is for capital gains tax rates to match the three bands of income tax – 20%, 40%, 45%. “Under the proposal, a person’s capital gains tax band would be calculated by adding up their income and profits from assets.” If the tax rate was 40%, then an increase from 24% to 40% would be a 66.7% increase and an increase from 24% to 45% would be an 87.5% increase. Streeting relies on a paper by the architect of the now-discredited Farm Tax which claims £14 billion could be raised…
HMRC’s own calculations show that increasing higher Capital Gains Tax rate by 10 percentage points (a 21% increase in the rate) would actually reduce revenue by £3.5 billion. A 5% increase would reduce it by £870 million. Increasing the lower rate also reduces revenues – the relatively modest CGT rises that have already taken place have resulted in significant lost revenue…
The latest HMRC stats from 2023-4 shows that the average gain per CGT taxpayer was about £174,000 in a year. That means the 45% tax rate in the majority of cases, which according to HMRC forecasts predicts a £7 billion loss in tax revenue…
With three exceptions European countries tax capital gains at substantially lower levels than income. Those three all tax them at between 20% and 10%…
Streeting has proposed this idea before in a pamphlet which seems to represent the last time he thought about policy. The ‘Labour Growth Group’ has mostly copied Farm Tax creator Arun Advani’s proposals in their own paper. Pop that in the bin…
Guido also called this at the beginning of the month. Tomorrow’s news, today…
Any Labour consideration of a wealth tax is likely to draw on the work of the UK’s chief wealth tax campaigner Arun Advani. Co-conspirators will remember the economist/activist as the architect of the government’s disastrous Farm Tax…
The wonk – who runs the high-tax campaign outfit CenTax – drew up extensive proposals for the IHT changes which appeared in the last budget. Some of the changes were based on comedically misguided analysis by Advani which claimed only 77 non-doms would leave the country as a result. He has now rolled back on his support for the discredited non-dom IHT changes of which he was also a key architect…
Advani was also a principal contributor to the “Wealth Tax Commission” out of the LSE and University of Warwick which proposed in an influential 2020 report a one-off wealth tax bombshell to rake in “one-quarter of a trillion pounds over five years.” They advocate for one of two models: a “one-off wealth tax payable on all individual wealth above £500,000 and charged at 1% a year for five years would raise £260 billion; at a threshold of £2 million it would raise £80 billion.” The proposals would be given cover by the incoming director of the ‘neutral’ Institute for Fiscal Studies Helen Miller, who said: “The case for a one-off wealth tax is simple. If it were unexpected and credibly one-off this would be an efficient way to raise revenue and could be used to address existing wealth inequality.” As with all of Advani’s schemes there are major flaws. The report admits that “delivering a one-off wealth tax from inception through to full operation would be a major undertaking,” likely to take some four years. Many prospective victims would scarper in that period and few would believe that the tax would be ‘one-off.’ The greedy Labour left would be back for more…
Arun has gleefully boasted of his links with the government – he said at Labour Conference last year that he was “optimistic” because the Labour government is “genuinely listening” to his ideas. The government has repeatedly failed to rule out a wealth tax after Neil Kinnock suggested it was considering one on Sunday. Expect them to be leafing through Advani’s one-off proposals as we speak…
There has been much wailing and gnashing of teeth in leftist circles at the decision by asset manager Aberdeen Group plc to kick out the group of tax hike enthusiasts running its charitable arm, “the abrdn financial fairness trust,” who since 2019 had turned it into a cashpoint for myriad organisations promoting tax increases and campaigning against spending cuts. Oh no!
Since 2018 the Trust has been led by leftist activist Mubin Haq, who has been campaigning against the Labour Government’s now stymied welfare cuts and for assorted tax hikes. The trust’s highest paid employee was raking in between £110,000 and £120,000 according to public documents…
Organisations who have over the years been in receipt of the trust’s circa £2 million per annum largesse are a roll call of the tax-raising blob, including:
Critically the abrdn trust provided £660,000 of seed funding to establish CenTax, the ‘tax the rich’ research group that was successful in persuading Labour to introduce its disastrous policies of attacking non-doms and imposing a death tax on family firms and farms. The Resolution Foundation has also cashed in to the amount of £367,000. The loss of this annual infusion of millions is a severe blow to leftist lobby groups but the real surprise is how long it took Aberdeen plc to stop its own charitable arm from promoting anti-capitalist policies that hurt savers…
Yesterday’s episode of Countryfile featured a segment on Labour’s farm tax. Steve Reed got to make his case…
Within minutes the programme introduced “tax expert” Arun Advani to discuss claims from “farming groups” that thousands of farms will be dragged into IHT payment. Advani peddled his own figures which effectively ignore one half of the Farm Tax’s relief removals…
Co-conspirators will remember Advani is director of radical-left think tank CenTax – which consistently pushes for broad and extensive tax hikes. The BBC programme failed to specify that Advani’s numerous reports pushing for the Farm Tax have formed the basis of Reeves’ policy – something admitted by the Treasury. The Countryfile producers also didn’t think it was worth specifying that Advani has pushed for the state expropriation of farmland that is sold as a result of APR’s removal…
The programme made no allusion either to the fact that Advani says Labour is “genuinely listening” to him, all while Treasury minister James Murray spoke at CenTax’s launch and said he seeks “to make sure that collaboration between CenTax, Treasury and HMRC continues for many years into the future.” Advani is writing Treasury policy…
As Guido has long documented, left-wing wonks political positions are rarely contextualised by the BBC on screen and in print. Imagine the uproar from the left if someone from the Institute of Economic Affairs got interviewed without it being mentioned that they were pro-free market…
BBC Verify is out defending itself after its pro-farm tax bias and poor reporting quality attracted ridicule. The main post on its website is a long justification for its reporting on the IHT changes. Funnily enough it’s not promoting this one on social media…
The article goes through various differing positions held by stakeholders – the government and farming groups. The very first think tank the Verify team consults for comment happens to be one CenTax. Co-conspirators will remember that one…
“The CenTax think tank has studied the impact of APR and BPR reliefs.
CenTax’s co-director Arun Advani argues that the government’s estimates of the number of agricultural estates likely to be affected by the capping of both reliefs at £1m combined – up to 520 estates a year – seems reasonable.”
Advani is then extensively quoted. What Verify makes no mention of is that his reports on APR and inheritance tax have formed the basis of Reeves’ policy. This has been admitted by the Treasury…
There is no mention of the fact that Advani has pushed for state expropriation of farmland that is sold as a result of APR’s removal. Readers are unaware from the article that Advani, along with CenTax co-director Andy Summers, is one of three “wealth tax commissioners” who consistently push for huge tax hikes. Using CenTax and think tanks like the IFS as vehicles to do so…
Advani is close to the government – he has boasted that Labour is “genuinely listening” to him and Exchequer Secretary to the Treasury James Murray was the keynote speaker at a parliamentary reception to officially launch CenTax. No mention of that from the BBC either…
Verify fronted an “independent” expert who is actually senior Labour activist to defend the Treasury in its previous coverage of the Farm Tax and quietly changed its article once under scrutiny. Seeing as their team confuses hectares for acres they probably aren’t the place to go to for reasoned coverage of this policy…
Guido pointed out last week that the plethora of reports calling for Agricultural Property Relief annd other “loopholes” on farms to be scrapped were actually written by one man. Arun Advani, director of CenTax, is aided by co-director Andy Summers in pushing for higher taxes across the board. The Treasury admitted to Guido last week that Advani’s research was the intellectual basis of the farm tax…
Last month, in a definitive report on Inheritance Tax for his think tank, Advani states that the cap for Agricultural and Business relief for farms should be set at a miniscule combined £500,000. Half of the measly sum the government has set it at…
In order to prevent excessive fragmentation of farms as a result of that cap, which would reduce productivity, Advani advocates for “the state taking part-ownership of land and becoming the landlord to tenant farmers.” That farmland which went above the cap would presumably be expropriated and rented back to the previous farm owner. Perhaps they could be formed into some kind of large ‘collective’ farms?
To counter-act risks to food security from these extreme measures the farm tax’s architect says state subsidies should be directed towards “specific activities desired e.g. farming particular produce” as a “more appropriate way to ensure that the desired goals were being delivered.” Meanwhile, other gobsmacking proposals include removing IHT relief for funeral expenses and relief on bequests to charities, because that “effectively redirects tax revenues towards the charitable preferences of a very small number of people.” Pure planned-economy thinking…
The Treasury has already admitted Advani’s research has guided it on the farm tax as it currently exists. These proposals could give a taste of things to come, especially if farmers put up too much of a fuss. Things can always get worse…
Former leader of the SNP in Westminster Ian Blackford told Times Radio why he believes Nicola Sturgeon’s claim that she spent no time in the kitchen and therefore didn’t see any of her husband’s purchases:
“She doesn’t have a passion for cooking.”