Why has the Chancellor left the very wealthiest untouched?
JakeAtkinson asks: Why has the Chancellor left the very wealthiest untouched? Take the increase in the bank surcharge - why is it only temporary? It also leaves billions on the table compared to proposals for a windfall tax on the banks’ domestic UK retail income; meanwhile they continue to make excessive profits - news today is that Lloyds pre-tax profits have almost doubled.
Also Capital Gains Tax wasn’t reform to tax income from wealth equally as income from work, with an investment allowance to account for inflation and reforms to the base, this equalisation could raise £19 billion a year too.
Lots left on the table by not taxing wealth.
Heather says: There’s certainly an argument that more could be raised by a proportional tax on wealth - though the most straightforward way squeeze more from the super rich is probably, as you say, an overhaul of capital gains tax. That would have to include closing various loopholes, so raising the rate didn’t result in massive avoidance; but plenty of experts argue that it’s feasible to do that - including at the Institute for Fiscal Studies (IFS) and CenTax, at Warwick University. I think Labour have repeatedly been scared off this, because they don’t want to send out the wrong vibes to global investors - but I agree with you it’s a shame they haven’t just cracked on with it.
When it comes to the bank tax, I imagine the Treasury was lobbied hard by the sector, and warned that they would pass on the costs to customers in higher interest rates - but they could have been bolder, and perhaps made the change longer-lasting too.