Why Labour rejects a wealth tax | FT

Ahead of the UK general election, Robert Shrimsley, chief political commentator, interviews Rachel Reeves, the shadow chancellor, and John McTernan, a former senior aide to the last Labour prime minister Tony Blair.

This is an edited extract of the conversation at the FTWeekend Festival on September 2 2023. It began with a protest at Labour's decision to rule out a wealth tax if it comes to power next year.

#wealthtax #ukpolitics #ukpolicy


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[wltdo]

How a labour government can accept that the extreme wealth owned by a few individuals is fine is frankly depressing. Greed. Greed. Greed.

[KJ-jspi]

The funniest thing is that Michael Gove supports a wealth tax whereas every single member of the Labour front bench is against one 😂😂

[noizydan]

I suspect Labour's economic plans won't work. Going cap in hand to billionaires will not result in a better outcome for non-billionaires.

[julianshepherd]

Labour does not want to be dependent on its members and the trade unions for money.
They want contributions from the rich

[AnEnemy]

She is proposing trickle down economics.

Thatcherite kool aid.

[jamin]

Absolute nonsense on the wealth tax. They could increase capital gains tax in line with PAYE. It has nothing to do with someone earning a house in Peckham worth £800k. They think we are idiots and it makes me worry who are in Labours ear in terms of fiscal policy

[Charlie-gfmv]

But a wealth tax doesn't mean taxing the £800, 000 house in Peckham. It doesn't even mean taxing the £5m house in Chelsea. It means taxing the £50m, £100m and £1bn estates that continue to accumulate and hoarde wealth. That is the money that will be buying the £800, 000 house in Peckham when the working class family can't afford the council tax on it.

[RickProcterLane]

Oh please @garyseconomics where are you? We need you back - we need you to lead the fight against this 😭

[themissinanis]

Completely in her own world, her statements confirm no understanding of societies issues.

[MrGavinBoyd]

YouTube Kieran Kaur “ACCOUNTANT EXPOSES: The UK Tax Regime Isn't Set Up For You To Get Rich” 5:49 Multimillionaire Rishi Sunak paid an overall tax rate of only 23%! The system is designed to tax workers not the wealthy who get most of their income from living off their assets.

[marklangley]

If Labour don't tackle the incredible transfer of wealth we have seen over the last 40 years then they;ll have no hope of fixing low growth. Access to cash for ordinary families and individuals has been reduced significantly, community funding has been cut to the bone. The NHS we all rely on so heavily is being dismantled before our eyes, people are sick and dying without adequate or safe health provision. Our birthrate is on the decline and we are relying in immigration (illegal or otherwise) to fill the gaps.
The tax system in this country is skewed in favour of the wealthiest, and we have to hope that trickle down will eventually work. It wont, it's a con.
Tackle wealth inequality, make the tax burden fairer, fix the NHS, give workers a better chance and your growth will come naturally. It really isn't rocket science and my 10 year old grandson could do the math.
Wake up please, Rachel.

[fanemanelistu]

Labour: "We're going to do exactly what the Conservatives did, and hope for different results". Insanity.

[schumanhuman]

Reeves says we don't need higher taxes, indeed but this is somewhat disingenous, we can clearly raise some taxes whilst lowering others.
Whilst broader wealth taxes are largely innefective, as Martin Wolf has pointed out 60% of UK wealth is land value and that can be taxed without distorting the economy, even Tony Blair and George Osbourne have voiced support (always after they are out of power), John McTiernan then says it's impossible to sell this to the public for this very reason, well that's just weak sauce.

What they probably fail to understand is the consequences of this failure to tax land wealth will be a major correction and economic recession likely after a peak 2026/7 (18.6 year cycle), coming right in the middle of the next parliament. Those homeowners will see a 20-30% drop in housing equity despite no tax on it, as well as all those pension funds and investments needing bailouts.
Labour's general YIMBYism and even the controversial CMO's are imo welcome (though I'd lay 60/40 odds they renege on the latter), but it will not stop land speculation driving prices higher, you cannot build at the margins faster than banks will issue credit, in fact the later stages of the cycle see prices rising with supply just as they did 2003-6, it is the distorted oversupply in some markets that leads to a bigger more prolongued bust.

[bkessel]

Manufacturing is dead. All so called growth comes from financial markets which produce money from nothing. There needs to be a govt that encourages investment in the UKs infrastructure and in real goods.

[WhichDoctor]

the current tax burden falls most heavily on those on the bottom end of incomes. That is stifling the economy by taking yet more money out of the pockets of people who are most likely to spend what they earn. Introduce a wealth tax on those with soo much money they will never spend the vast majority of it and then you can use that money to cut taxes for the people who actually drive economic growth and productivity.

[metalhead]

Taxing housing wealth, what is that guy on!? Wealth tax would focus on £10M+ not ordinary people in Peckham

[erickortenbach]

I do not know what a wealth tax is or what it means. All you need to do is make the taxable profits a better system. Currently 19% on £50, 000 or lower, 25% on £250, 000 or more. I've been in business and owners of businesses DO EVERYTING THEY CAN TO AVOID PAYING TAXES!!!! £250, 000 profit is not a lot. So I suggest we structure taxes on profits the same way we do on peoples income. So show some guts and charge profits of £500, 000 at 28%, £1, 000, 000 32% etc. It is not difficult. But this fear that businesses might leave the country if we do that is nonsense. Actually, it would have been better if the EU had come to an agreement that every member would charge the same % so that corporates cannot escape paying what is due, when doing business in Europe. It still baffles me that the likes of Google, Starbucks etc escape the system. It is morally wrong. Just do it. They want to stay in Europe. It's a huge wealthy market!!

[-silkman-]

With infrastructure and public services literally crumbling around us, how on earth do Labour propse to improve all this without a soubd plan for the redistribution of wealth. Its utterly insain to rely on economic growth if your not investing in the infrastructure and services to allow growth to happen. Companies hording billions isn't helping anyone.

[AdamE]

She goes on about the highest tax burden since the war, but she is loathe to mention whom that falls upon though because that would mean acknowledging that some struggle more than others.

The ultra-rich have been absolutely raking it in over the past decade and beyond whereas the working and middle classes have been taxed more and more whilst having their social and public services cut to the bone.

I'm not in favour of making the average person pay more in taxes, but a tax on wealth and assets worth over say £1 million, plus getting rid of tax exemptions for non-domiciled individuals would go a long way to redressing some of the inequalities in our system.

[mihaicraciun]

get ready for tories part 2, this woman has missed the mark BIG TIME