#033 Tax The Fat Cats
On the 17th November 2022 Jeremy Hunt MP, the latest conservative chancellor of the exchequer, will release a package of spending cuts & tax rises, which, in all likelihood, will fail to address the ongoing cost of living crisis in Britain and lead to a whole new round of damaging and unnecessary austerity.
Hunt, recently appointed to the position of Chancellor by Prime Minister Liz Truss, has already made significant reversals to the decisions of Truss’s first chancellor, Kwasi Kwarteng MP, following Kwarteng’s disastrous and short lived time in the job.
The most significant of these reversals was Hunt’s decision to cancel Kwarteng’s cancellation of the rise in corporation tax, from 19% to 25% (for company profits above £50k), meaning the conservative party will now stick to the earlier decision to increase the tax on business profits in April 2023.
This new corporation tax rate should be welcomed. It is in line with the corporation tax rates many other countries currently employ and it is significant in that it hopes to raise somewhere in the region of £18 billion, which will help reduce debt as a share of the economy. This move also suggests even the conservative government accepts that significant amounts of revenue can be raised through increasing taxes on those that hold wealth & capital in Britain.
With this in mind, here I propose a further ten tax policies, in no particular order, that could be enacted by the U.K. government today, in place of the damaging spending cuts it likely has planned, to raise much needed revenue, fairly and progressively.
- Tax personal wealth & capital intelligently,
eg, 1 or 2% over £5 million in net assets.
- Institute a land value tax or a proportional property tax on commercial property, to replace business rates.
- Increase the inheritance tax rate and lower the tax free threshold, promoting a more meritocratic society.
- Refine the income tax rates to be more progressive as you go up the income tax bands,
e.g., keep basic income tax rate at 20%, taxed on income between £12'570 and £50,270, change the income tax on income earned between £50,270 and £125,140 to 33%, and then keep the high 45% rate for income earned above £125,140.
- Turn national insurance into a progressive tax by taxing the higher rate, at a higher rate than the basic rate,
e.g., basic N.I. rate at 10%, taxed on income between £12'570 and £50,270, 12% on income earned between £50,270 and £125,140 and then say 15% for income earned above £125,140.
- Apply national insurance to investment income.
- Tax dividends at the same rate as income tax
- Tax capital gains at the same rate income is taxed.
- Institute an online sales tax.
- Scrap the “non-dom” regime for those living in Britain.