Left-wing think tank the IPPR is today pushing for tax hikes on wealth to address “regional wealth inequality.” Because capital gains are realised in London and the South East apparently that means opportunity” is “not accessible across the UK”…

The chief recommendation of the IPPR to “regionally rebalance the UK” is a gargantuan tax hike:

“Taxing all income equally: In the long-term we propose a unified tax schedule for all income types, including capital gains and dividends, to align with income from work by the end of this parliament. In the short-term, we propose the equalisation of capital gains tax with income tax implemented at the first fiscal event of this parliament.”

The IPPR is dressing up old ideas to roll the pitch for Reeves’ October budget. This exact policy was proposed in a 2018 report from the think tank which was co-written by one Carys Roberts. Roberts, former IPPR executive director, is now ensconced in Downing Street’s policy unit, working alongside fellow ex-director Rachel Statham. The capitalism-sceptic think tank is said to be “doing the most serious and influential policy work around the Labour party.” That work can accelerate now its personnel are at the heart of policy making in government…

The same 2018 report called for the replacement of inheritance tax with a whole-life gift tax, which is effectively a gargantuan enlargement of confiscation of family inheritance. As Guido revealed plugged-in tax lawyers are in active preparation for its imposition….

Reeves yesterday stoutly refused to rule out changes to capital gains or inheritance tax. This “Iron Chancellor” hogwash ain’t gonna last…

Pro-tax fanatics the Tax Justice Network got an inordinate amount of coverage today for their report claiming that a “global wealth tax” which copies that of Spain would raise £1.5 trillion. Spain’s applies to those who own assets over €3 million and can go as high as 3.5%. The tax was implemented in 2022 and raised a measly €632 million…

Along with fawning coverage from the usual suspects, the BBC had a representative from the campaign on this morning for a soft-touch explainer in which he was allowed to promote his agenda without substantial pushback. The report itself dismisses the obvious fact that people will leave if you implement a wealth tax as a “myth.” Helpfully ignoring that in 2022 Spain had net external migration of 727,000 – the highest in 10 years…

Naturally the Green Party jumped on the crank proposals to demand a replica in the UK. Wealthy Norwegians left the country after it imposed a wealth tax. The same goes for China. Sweden abandoned its wealth tax after it destroyed revenue. Spain’s combination of personal capital income taxes and wealth taxes is now resulting in marginal tax rates above 100% – which means that, by saving, the value of wealth shrinks. Literally crushing growth…

As Rachel Reeves announced the government would be removing the winter fuel payment upsetting millions of pensioners, a measure punishing owners of traditional holiday lets in rural and coastal communities slipped by without as much notice. The abolition of the furnished holiday lettings tax regime was first announced by Jeremy Hunt in the pre-election budget – he claimed it was being abused by ultra-wealthy second home owners. But the plans were blasted by the operators of modest businesses and other small business lets, which are the bedrock of the UK staycation industry…
Now Labour has confirmed plans will still go ahead and HMT expects to raise £245 million a year in revenue from the change. Labour’s revival of the policy will surprise nobody – except those who thought they might offer a different set of fiscal policies to the Conservatives. Perhaps the Tories should focus on finding a new leader who believes in cutting tax, rather than just giving Labour a free pass to remove tax-breaks…

The outflow of UK millionaires triggered by Starmer and Reeves has begun in earnest as tens of thousands up sticks and leave for sunnier (and less heavily taxed) countries. Most millionaire Brits are moving to the UAE and the US…

Only repressive communist China is seeing a higher rate of outflow of the rich than Britain according to research from advisory firm Henley and Partners (which is pretty remarkable given China’s authoritarian capital controls). A record 9,500 millionaires are forecast to leave Britain in 2024, up from around 4000 the previous year…

Starmer said during the general election campaign: “I think it’s a good thing that people are aspirational. When I say our number one mission is economic growth, you could say our number one mission is wealth creation. Now that’s an odd thing for the Labour party to say. It might have been in the past.” More fool those who believed him…

Labour have already u-turned on their promise to not raise taxes on “working people”. Reeves is saying she needs to fill the “surprise” £22 billion black hole by whacking up tax. Though if they are to commit to their promise of not raising income tax, VAT or NI, it’s simply a question of which sectors of life Labour will target. Tax lawyer Dan Neidle has done some research into which taxes they could raise:

Pension Reforms:

• Scrap the pension tax relief.
• End the pension tax free lump sum.

Inheritance and Wealth Taxes:

• Limiting inheritance tax reliefs.
• Increase inheritance tax on trusts.
• Wealth tax – targetting those with assets.
• Gift tax.

Capital Gains and Investment Taxes

• Increase capital gains tax. Something that would drive out investment and investors…
• Abolish business asset disposal relief.
• Cap tax relief on ISAs.

Property and Real Estate Taxes

• Eliminate the stamp duty “loophole” for enveloped commercial property.
• Increase ATED.
• Council tax increases for valuable property.

Consumption Taxes

• Reverse the Tories’ cancellation of the fuel duty rise.
• Increase vehicle excise duty.
• Tax gambling winnings.

A reminder that Neidle is not just a tax lawyer, but a senior Labour activist, who currently sits on the Party’s senior disciplinary body. He may be very well informed…

Labour campaigned on the economy during the election and took the line: “no tax rises for working people“. Reeves and party spokesmen said:

• “Working people are those people who go out and work and earn their money through hard work.”
• “There are people who do have savings, who have been able to save up & those are working people as well.”
• “Working people are also pensioners that have worked all their lives and are now in retirement, drawing down on their pensions.”

Labour constantly attacked the Tories for raising taxes and pledged not to raise them “on working people“. Three weeks later that one’s dead in the water…

Rachel Reeves tells The News Agents that “we will have to increase taxes in the budget“. According to their own definition the taxes Labour is teeing up will break its manifesto promise…