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Will a wealth tax be enough to solve Britain’s post-pandemic debt problem, or should we focus on reforming the taxes we presently levy?
These issues were discussed as CIOT returned to the Labour Party Conference in Brighton for the first of our party conference events, which was co-hosted with the Institute for Fiscal Studies (IFS).
The title A Wealth Tax to Pay for Covid? Our guest speakers, who were introduced by CIOT Director of Public Policy John Cullinane, were:
Dame Angela Eagle, a member of the Treasury Select Committee in the House of Commons (who served as Exchequer Secretary to the Treasury from 2007 to 2009)
IFS’s Head of Tax, Helen Miller
Arun Advani is a member of the Wealth Tax Commission and a professor at the University of Warwick.
She proposed that rather than introducing a new wealth tax, the government should attempt to utilise current tax regimes for targeted reforms, mentioning capital gains and inheritance tax as examples.
According to Arun Advani, a wealth tax would need to be explicit about its goals to be properly developed and administered. Miller also suggested that, rather than imposing a new tax, the government could consider using the capital gains and inheritance taxes to implement targeted reforms.
Over five years, a 1% fee on the wealth of £500,000 would raise £260 billion. An annual wealth tax of between £8 and £10 billion might be raised. This is a better use of the tax system than the government’s proposed Social Care Levy.
Advani: Reducing wealth disparities would necessitate a mix of existing tax measures and an annual wealth tax imposition. John Cullinane: To balance the budget, reconstruct society, and make it more equal, it’s necessary to start thinking about the unimaginable.
‘That age is over,’ Eagle added, despite the Prime Minister’s assurances that he is a low-tax politician. She reminded the gathering that the desire to develop a more wealthy and egalitarian society would define the UK’s next 20 to 30 years of politics.
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