Yahoo Finance Willetts: Baby boomers should pay higher wealth taxes to spare younger generation
Britain's "baby boomer" generation must pay higher wealth taxes to fund spiralling health and welfare spending – or risk placing the burden on their children, a former Tory minister has argued.
Lord Willetts declared that the "age of tax cuts", enjoyed by those born from the end of the war to the early 1960s, was over.
A "tipping point" was being reached with that generation retiring and fewer young people of working age replacing them.
That could result in a 15p hike in the basic rate of income tax to cover the spiralling cost of health, education and social security, he said.
Lord Willetts pointed to research by the Resolution Foundation, the think-tank he chairs, showing that by 2030 this would rise by £20bn and by 2040, by £60bn.
He said: "The time has come when we boomers are going to have to reach into our own pockets.
"The alternative could be an extra 15p on the basic rate of tax, paid largely by our kids.
"Is that kind of tax really the legacy we - a generation who own half the nation's wealth - want to bequeath our children and grandchildren?"
In a speech being delivered on Monday, the peer called for an overhaul of inheritance tax and council tax, arguing that the current system disproportionately weighs on families in less expensive homes compared to individuals in higher value properties.
He said: "For 30 years Britain has enjoyed a time when the baby boomers were at their peak earning power.
"We benefited from lower pressures on public spending.
"Politicians talked as if tax cuts were the normal state of British politics.
"But we are now at a tipping point.
"The baby boomers are moving into retirement and there are fewer younger working age people coming up behind them.
"As we at last emerge from deficits the recession gave us in this decade we need to look forward to the pressures an ageing population is set to give us in the next.
"Politics is going to be very different as the baby boomers retire. The age of tax cuts is over.
"Unless we act, at some point we will face a choice between changing our approach to taxation, or cutting access to the NHS and letting social care get into an even deeper crisis."
