Yahoo Finance Raise taxes on the wealthy now says left-leaning think-tank, after Keir Starmer rejected increases
Taxes on the wealthy should go up now, a left-leaning think-tank says – fuelling criticism of Keir Starmer who has called for increases to be shelved.
Up to £55bn could be raised to create “a fairer and stronger post-pandemic economy” by hikes on companies, wealth and land, the Institute for Public Policy Research (IPPR) is arguing.
And it dismisses Labour’s claim that it would undermine the economic recovery, provided the increases are “accompanied by a big stimulus”.
The Labour leader has come under fire for opposing higher corporation tax, expected in next week’s Budget, when a windfall tax on the supermarkets is also mooted.
“This is not the time to consider tax rises, we are in the middle of an economic crisis,” Treasury spokesperson James Murray said.
But the IPPR has potentially embarrassed Labour by rejecting that argument, insisting some taxes can be raised immediately without “stifling the recovery” from Covid-19.
“The fact is some taxes, like corporation tax and capital taxes, can be raised now without slowing the recovery, as long as they are accompanied by a big stimulus,” said Carsten Jung, its senior economist.
“The very low taxes on the wealthiest and corporations widen inequality, are bad for the economy and put public finances on a shaky foundation.
“With many businesses and wealth owners having benefitted from unprecedented government support measures throughout the pandemic, it is only fair for those who can afford it to contribute their fair share for a sustainable recovery.”
The IPPR wants changes to four taxes:
* Capital gains tax – on profits from selling assets, which should be taxed at the same rate as income from employment, raising up to £33bn a year.
* Corporation tax – which should go up to 24 per cent, raising £13bn a year.
* Inheritance tax – which should be replaced with a fairer ‘lifetime gifts tax’, raising £9bn a year.
* Property taxes – replacing business rates with a land value tax and council tax and stamp duty with a property tax, reflecting the value of homes.
Momentum, the pro-Corbyn grassroots group has also criticised Labour’s stance – amid suggestions it could find it also in alliance with rebel Tories, blocking tax rises.
“During the pandemic big corporations like Amazon have cashed in while working people struggle to get by,” a spokesman said.
“Labour should support both raising corporation tax and a special Covid-19 windfall tax for sectors that have made super profits.”
Since 2010, the Conservatives have slashed the headline rate of corporation tax from 28 per cent to 19 per cent – but it has failed to stimulate investment, as claimed.
There are hints that Labour is softening its stance because of the backlash, and is ready to back a corporation tax increase provided it starts later in the parliament.
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