Report Finds Scrapping Capital Gains Tax Would Make Families £1,000 Better Off

While Labour continues to reverse its pre-election definition of “working people” to justify tax hikes, the Adam Smith Insitute offers another path for raising money from Capital Gains Tax. Scrap it…

Statistical modelling in the ASI’s new report suggests that national income would grow by £25.08 billion thanks to increased saving if CGT was gradually phased out. Further revenue increases from higher investment and productivity would more than replace revenue lost from CGT and boost growth…

Without Capital Gains Tax national income would, according to the modelling, rise by 0.9% annually, in perpetuity. That’s thanks to a 2.4% increase in national savings as a percentage of national income. Bean-counters will know that two-thirds of the lost revenue from scrapping the tax would be offset by increased revenue from other taxation as a result. Multiplier effects to growth would more than compensate for lost Treasury revenue while every family would be £1,000 a year better off…

Reeves should rule out a rise in CGT in the budget, and better still scrap it altogether. Talk about a rabbit…

mdi-timer 25 October 2024 @ 15:50 25 Oct 2024 @ 15:50 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Labour Completely Changes Definition of ‘Working People’ Before Budget

Once again the No 10 communications operation is breaking down. Starmer told broadcast journalists yesterday night that someone who works and also gets income from shares or property “wouldn’t come within my definition” of a “working person.” Today his spokesman clarified that “a person who holds a small amount of savings in stocks and shares still counts as a working person.Guido cast his mind back to before 5th July, when Labour made a specific pledge in its manifesto: “Labour will not increase taxes on working people”…

These are the definitions of “working people” the public was given prior to the election:

  • Reeves:Working people are people who go out to work and work for their incomes. Sort of by definition, really, working people are those people who go out and work and earn their money through hard work. Some people, who go out to work haven’t been able to build up savings. Many other people who go out to work, have had to run down their savings. But there are people who do have savings, who have been able to save up and those are working people as well.
  • Starmer:  Yes, I’m a working person, I come within my own definition of a working person, which is earning my living, paying my taxes and knowing what it means to save money.
  • Reeves: “Working people are people who get their income from going out to work everyday, and also pensioners that have worked all their lives and are now in retirement, drawing down on their pensions.

Compare that to now, days before the budget.

  • Starmer: “I have in my mind the sort of people that go out, earn their living, have maybe a bit of savings, but not huge savings. And there when things get a bit tough, they can’t simply get a cheque book out and sort of write their way out of the problems that they’re facing. It’s those people that are working hard, saving where they can. Of course, I think most people try to do that where they can, although it’s difficult. But [it’s] the sort of people that have the anxiety I suppose in the bottom of their stomach that should something happen to them or their family, they know they can’t simply write a cheque to get themselves out of any future difficulty. They’re the people I have most in mind when I make the decisions I make.”
  • Bryant: “[Working people] has become a shorthand in political circles for the people who were particularly disadvantaged in the cost of living crisis…that suddenly meant that people had to find an extra £300 a month for their mortgages so those are the people that we didn’t want to hit, so we wanted to say in the general election we don’t want to take more tax from you and that’s what we said.
  • Kinnock: “Obviously the definitions have to be seen in the round and that’s what’s going to be put on the table.”

Spot the difference? They did promise change…

mdi-timer 25 October 2024 @ 14:18 25 Oct 2024 @ 14:18 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Murray Refuses to Answer Whether Landlords Are “Working People” Six Times

Labour’s muddled definition of “working people” has now shifted three times in a week, adding to the farcical spectacle surrounding their manifesto tax pledges. Yesterday, Keir Starmer said that Britons earning income from shares or property aren’t “working people.” Sparking fresh fears of looming tax hikes for investors…

In a failed attempt to clarify the “working people” line, Exchequer Secretary to the Treasury, James Murray, made the morning media rounds. Speaking on the Today Programme, he was asked six times a simple question: “Do landlords work?” And six times, he dodged the question, hiding behind a stream of evasive waffle instead:

This won’t be music to the ears of 2.82 million private landlords in the UK, who now brace for the potential of steep tax hikes in the upcoming budget. Labour has taken the “campaign in poetry, govern in prose” approach to whole new level…

mdi-timer 25 October 2024 @ 08:42 25 Oct 2024 @ 08:42 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Surge in Number of British Companies Shutting Down Ahead of Budget

Businesses continue to vote with their feet and shut up shop, a trend that shows no signs of slowing down, even before the budget is unveiled. So far this month, over 1,600 members’ voluntary liquidations have been recorded, according to filings with The Gazette. More than double the level for the whole of October last year. Business owners are heading for the hills, taking UK job prospects with them… 

The uptick in liquidations has been blamed on Reeves’ looming capital gains tax hike and expected cuts to business asset disposal relief. Keeping capital and business in Labour’s Britain is far from attractive – and this is before any tax hikes have been formally announced. Imagine the exodus after Halloween…

mdi-timer 24 October 2024 @ 13:40 24 Oct 2024 @ 13:40 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Capital Gains Receipts Hit Highest Level Since Financial Crisis in Panic Sell-Off

New data just released by HMRC shows Capital Gains Tax receipts have shot up by 16.3% in the third quarter ahead of the budget. Coming in at £572 million from July to September – compared to £492 million in 2023. Realise your gains, realise your gains…

September’s CGT receipts hit £192 million, which is the highest figure since 2008. Inheritance Tax receipts, boosted by frozen thresholds, hit £4.3 billion between April and September, a 10% increase on the year before. Evidence shows that people actually give up the ghost to avoid the death tax…

Starmer’s personal firefighting over budget speculation on an incoming Capital Gains hike hasn’t worked, then. More evidence of the Laffer Curve in action will likely present itself if Reeves chooses to hike CGT in the budget – HMRC itself predicts a 10% hike would lower revenues by £2 billion. Labour’s tax crosshairs are clearly set on growth-promoting wealth…

mdi-timer 22 October 2024 @ 13:22 22 Oct 2024 @ 13:22 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Reeves’ Tax Raids Set to Create £84 Billion Black Hole

It’s more bad news for those hoping for economic growth. A new report from Liz Truss’ Growth Commission reveals that the upcoming Autumn Budget could create a staggering £84 billion “black hole” in public finances. Proposed tax raids on capital gains, inheritance, national insurance, and several other areas are set to see the UK’s GDP growth per capita drop by an alarming 8.8% by 2030. Leaving every person in the UK £3,788 poorer than they would be without Labour’s heavy-handed approach…

While Rachel Reeves points to her own “black hole”—currently *checks notes* at £40 billion—as justification for these tax raids, she’s creating a much larger problem for herself. The proposed tax increases would likely overshadow the modest economic boost expected from Labour’s planning reforms, which are projected to add just 0.8% to GDP per capita by 2030. Reeves has been warned…

mdi-timer 22 October 2024 @ 11:30 22 Oct 2024 @ 11:30 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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