We’ve been busy this week. Yesterday we launched research showing how £37 billion a year could be raised through five simple changes to the tax system. Five changes that would see the super rich taxed more.
Our research was picked up by The Guardian. And Labour MP Clive Lewis quoted our recommendations live on the BBC while making a case for wealth taxes.
The research has been shared thousands of times on Twitter and Facebook.
It’s been shared on Twitter by George Monbiot and Paul Lewis of Radio 4’s Money Box. And by Members of Parliament Marsha de Cordova, Beth Winter and Clive Lewis.
The revenue from wealth taxes could be used to fund our struggling NHS and public services. Spending cuts mooted by the government are not inevitable. There is an alternative.
Protect our NHS
We’ve launched a new petition to make sure Rishi Sunak can’t ignore this issue.
We’re demanding the government urgently avoid any cuts to the NHS and public services. Instead Rishi Sunak should introduce taxes on the super rich.
Will you support taxes on the super rich to stop cuts to the NHS and public services?
Sign the petition.
With your backing we can make the super rich pay more tax to support our public services.
Cost of living scandal
Our tax system must take more from the rich to support everyone struggling with the cost of living crisis. We’re making strides towards achieving this.
Labour leader Keir Starmer was pushing for the abolition of non-dom status at Prime Minister’s Questions on Wednesday.
I was on LBC News on Tuesday, setting out just how damaging cuts to public services would be in the midst of a cost of living crisis.
Today we’re launching the Stop the Squeeze campaign. We’re demanding that Rishi Sunak reject the failed economics of the past and pursue bolder solutions to solve the cost of living crisis. You can read more about it here in The Guardian.
The campaign brings together trade unions, charities, campaign groups, including Greenpeace, Save the Children and Oxfam. Follow the campaign on Twitter.
The government could raise up to £37 billion in taxes on wealth, analysis by Tax Justice UK has found.
It comes as the new Chancellor, Jeremy Hunt, looks to find ways to raise taxes ahead of next week’s Halloween Budget.
Tax Justice UK Head of Advocacy, Tom Peters, said: “Tax is about political choices. At a time when most people are being hit hard by the cost of living crisis it would be wrong to cut public services further.”
“The wealthy have done really well financially in the last few years. The Chancellor should protect public spending by taxing wealth properly.”
If he chose to, the Chancellor could:
The revenue figures are estimates based on research from the government, academics and think tanks. The total figure might change depending on exact behavioural responses.
Tax Justice UK policy recommendations:
Increase Capital Gains Tax to align rates with Income Tax. This would have the positive effect of simplifying the tax system, to treat all forms of income in the same way. There is no obvious reason why someone going to work should pay more tax on their wages than someone living from their investments, for example. According to the Office of Tax Simplification, who advocated for this policy change in 2020, it could also raise up to £14bn a year.
Extend National Insurance to investment income. Instead of focusing on the rates of National Insurance, the government should expand the tax base, by applying National Insurance to income from investments, such as dividends from shares, rent from property, and interest on savings . This would equalise and simplify the treatment of different types of income under the taxation system, and ensure that income from wealth is taxed at the same rate as earnings from work. It would raise around £8.6bn.
Introduce a 1% annual wealth tax on net assets over £10m. A small wealth tax applied to those at the very top of the distribution could raise nearly £10bn from 0.04% of the population - those who have benefited enormously from structural economic changes over the last decade. This tax would help to rectify some of the issues with our existing wealth taxes, which are often avoided by the very richest.
Scrap or reform Business Relief and Agricultural Property Relief on Inheritance Tax. There is evidence that these inheritance tax reliefs are being used as loopholes by a small minority of the very wealthy to avoid paying the appropriate inheritance tax on their assets. Abuse of Agricultural Property Relief is likely pushing up the price of agricultural land for genuine commercial food production. Scrapping these could raise over £1.4bn a year, or the Resolution Foundation has proposed reforms to prevent them being exploited, generating a smaller saving.
Abolishing the non-dom regime. Non-domiciled residents in the UK (‘non-doms’) receive at least £10.9 billion in offshore income and capital gains each year, which they are not required to report to HMRC or pay tax on in the UK. Taxing this income would raise more than £3.2 billion in additional tax revenue each year and also remove the current disincentive to invest in the UK, according to research by academics Dr Andy Summers and Dr Arun Advani.
The prime minister Liz Truss has resigned. However the chancellor Jeremy Hunt remains in post. Hunt’s ‘Halloween budget’, which is expected to contain public spending cuts, will continue as planned on the 31 October.
There’s also a strong likelihood whoever becomes PM will continue pushing an agenda that involves big cuts to public services.
In this period of chaos it's more important than ever that we put forward a clear alternative.
Stop the cost of living crisis
The Tax Justice team and our supporters were outside Parliament yesterday, demanding more support for everyone struggling with their energy bills.
To avoid this growing cost of living catastrophe, and further spending cuts, the government must tax extreme wealth. The government must also introduce a new windfall tax on oil and gas giants' record profits.
We were there with the campaign group Fuel Poverty Action, who are calling for a free energy allowance to cover everyone’s basic needs. You can read more about the Energy for All protest here.
Thank you to those of you who came down to get involved, and Fuel Poverty Action who organised it.
We’re going to keep pushing for taxes on extreme wealth – and on the huge, record profits of big companies.
Tax is about choices. It’s unacceptable for Liz Truss’ government to put the burden of the cost of living crisis onto the shoulders of ordinary people. Many wealthy people have been sheltered from the worst aspects of this crisis, it’s right that they pay their share.
Pushing tax justice inside Parliament
While some of Tax Justice UK were outside Parliament, I was inside, hosting an event on tax with a group of MPs from across the political spectrum.
The meeting was hosted with the All-Party Parliamentary group on Responsible Taxation and the Patriotic Millionaires UK. I spoke, highlighting the urgent need to tax wealth instead of cutting public spending.
And earlier in the day, we also took part in an event hosted by Richard Burgon MP and Lord Prem Sikka on taxing wealth.
I am delighted to see that there is real momentum building behind our case for taxing wealth more inside and outside parliament. There simply isn’t a better alternative.
A string of u-turns by Chancellor Jeremy Hunt today should be the death knell for the mantra of tax cuts for big business and the wealthy.
Speaking in response to the Chancellor’s mini-budget Tax Justice UK Head of Advocacy, Tom Peters, said:
“While it’s good that the Chancellor has reversed course today, we are now standing in the wreckage of the low tax, small state ideology, with the prospect of another round of austerity 2.0 to come.
“It must be obvious by now that these same old tricks don’t work. The public are terrified of the cost of living crisis and do not want to see public services cut anymore.
“We need to tax wealth. This government could start by following Margaret Thatcher's example and align capital gains with income tax rates. It should end the inheritance tax loopholes open to the already wealthy. Finally it needs to tax the wealth of anyone with £10 million assets.”
In his statement the new Chancellor said planned cuts to National Insurance Contributions and Stamp Duty would go ahead.
However, he rowed back on a string of tax cuts announced by former Chancellor Kwasi Kwarteng MP, including a 19% cut to the basic rate of income tax rate. The decision comes after plans to cut the higher rate of income tax and plans to increase corporation tax were reaffirmed last week.
£60 billion would be cut from things like councils, benefits and social care if the government went ahead with a second round of austerity. Liz Truss’ tax cuts for the rich and big business would have directly led to massive cuts in public spending.
That’s what the think tank, the Institute for Fiscal Studies, says will happen if the Prime Minister sticks with her disastrous tax cutting budget. After nearly a decade of cuts to public services, and in the middle of this cost of living crisis, more austerity would be disastrous.
There is an alternative
Instead of more cuts, the government should be putting money into services that are creaking at the seams. Seven million people are waiting for a hospital appointment in the UK.
This should be matched by tax increases on those who can afford to pay more. Pressure is already building for the government not to cut the rate of corporation tax, but to move it in line with other rich countries.
Taxing income from wealth at the same level as income from work is a sensible reform. The government could institute a wealth tax on people with over £10 million in assets and end the inheritance tax loopholes open to the well off.
These sensible measures should be first on the list before there is any more austerity.
Inequality is bad for all of us
The wealthy have benefitted hugely in recent years, including during the pandemic.
In this interview ex-City banker Gary Stevenson puts things into perspective. Gary made millions working for Citibank and now campaigns for wealth taxation of the very rich.
He doesn’t think the rich are bad. Instead he argues that inequality is bad for all of us. We cannot keep insulating the mega wealthy whenever the economy hits a downturn.
He’s not alone. Former Conservative Party donor Gareth Quarry thinks tax cuts for the rich should not have been on the agenda in the recent botched budget. As he said "if I can’t pay more than my fair share as a rich guy, what hope is there?”
We are going to continue to push hard for a different approach to the failed ways that we have seen in the recent past.
Did you hear that? It was the sound of a huge – and wholly necessary – government u-turn on their plans to cut taxes for the rich.
On Monday the Chancellor said he was ripping-up plans to cut the 45p rate of income tax. This was less than two weeks after he’d announced it.
We’ve pointed out again and again that the hard right’s obsession with low taxes and a smaller state is not what the public wants. There is no evidence that handing more and more giveaways to the rich will deliver a stronger, fairer economy.
Winning the debate
We’ve been on TV and radio over the last week, pointing out the facts and urging the government to reverse course on tax-cuts.
Our Head of Advocacy, Tom Peters, was on the BBC this week that the government should now scrap plans to lower the corporation tax rate.
And our Executive Director, Robert Palmer, was on TalkTV pointing out where the government’s priorities lie: tax cuts for corporate profits while many ordinary families enter one of the bleakest winters in living memory. We also talked to LBC, LBC News and BBC London.
We must go further
We’ve been pushing the case for a better tax system across the media. A better tax system that works for everyone, and delivers the public services we deserve.
The Chancellor caved in to this pressure on Monday. He must now reverse his £18bn plan to cut corporation tax.
And at a time when ordinary families’ energy bills are going through the roof, the Chancellor should also increase the taxes paid by big profitable oil and gas companies.
The Chancellor should also listen to millionaires who want to pay more tax, not less.