Hunt is rewarding the wealthiest at the cost of those on lower incomes (Picture: Mark Kerrison/In Pictures via Getty Images)
The days leading up to budget statements are always filled with unknowns.
Politicians have no idea what is in the Chancellor’s speech when he steps up to talk in the House of Commons, let alone people up and down the country.
But there are always rumours, and this week is no different.
Reports suggest Jeremy Hunt’s Autumn Statement this week could include personal tax cuts, either to national insurance or to income tax.
But cutting taxes on the one hand, only to slash people’s benefits with the other – as media coverage suggests is on the cards – is cynical and dangerous.
Hunt is right to be looking at how much tax is being paid, on what and by whom. But I believe that more tax isn’t something to fear. That doesn’t mean hitting the poorest with more – but by targeting it at the right people – the wealthiest.
Let’s start with the facts. It’s true that much of the general public is facing taxes by ‘stealth’ with thresholds for income tax and national insurance frozen – meaning that with inflation being so high, those on lower incomes are being dragged into higher tax brackets.
But that means that by failing to increase taxes at the top end, Hunt is rewarding the wealthiest at the cost of those on lower incomes.
Jeremy Hunt, like Tory Chancellors before him, misses the point, we don’t need stealth taxes, we need wealth taxes.
The scale of poverty in the UK is shocking (Picture: PA)
In order to redistribute wealth, mend our broken public services and tackle the climate emergency, we need to spend more.
To do that, we need to tax people more. But the right people, in the right way.
Put simply, a wealth tax means those with the broadest shoulders would bear the heaviest responsibility – exactly how a compassionate society should function.
Wealth is significantly under-taxed in the UK – recent research suggests that from 2011 to 2020, the average tax rate on income was 32.9%, while increases in wealth were taxed at just 4.1%.
In terms of taxing wealth, there’s a whole array of options for Ministers to choose from.
Taxing capital gains, like profits from selling off assets, in the same way as income from work, could, research suggests, raise between £12-16billion, while another £18billion could potentially be generated by reintroducing a tax on unearned income like investments.
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