Higher taxes for the rich?
In a recent interview, the deputy prime minister Nick Clegg said that, in his opinion, the richest people should be asked to pay more tax, albeit for a limited period.
Clegg thinks that this would be fair, and fairness is essential to making austerity measures a success. His view is that those people with “considerable wealth” should contribute more in the short term because of our economic problems. I think one of the problems with the interview was its vagueness – how do you measure – and tax – wealth? There seems to general agreement that the 50% income tax rate was not effective in raising revenue and we already have an inheritance tax and a tax on capital gains.
Is the proposal that people with assets over – say - £1 million pay a percentage of that for a few years to help the economy? Is that individuals or couples? Do you differentiate between married couples and those in civil partnerships as opposed to those who live together? How do you take account of the difference in property values around the country? What if someone has an inherited property but limited income and so has no funds to pay a wealth tax? Will MP’s second homes count as wealth?
In my opinion politicians should think before they toss out policy ideas. This one would need a lot of thought to be turned into something viable (more detailed legislation?). The only good news is that it is likely to be ignored by the Chancellor!
Date: 30th August, 2012
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