Britain doesn't need a wealth tax – we already have at least three

Telegraph

2 days ago

The Welsh windbag is at it again. Former Labour leader, Lord Neil Kinnock, has set hares running by suggesting the party is exploring imposing a new wealth tax on Britain.
No 10 then refused to rule out introducing a levy, and the usual suspects lined up to say what a good idea it would be.
On the opposite side of the debate, centre-Right economists have pointed out the obvious: wealth taxes have failed in almost all the countries they've been introduced in.
It is also far from clear how wealth can reliably be valued at regular intervals when nobody has any faith that a crumbling HM Revenue & Customs (HMRC) could administer it.
Stuart Adam, a senior economist at the Institute for Fiscal Studies, said: 'Taxing the same wealth every year would penalise saving and investment.
'An annual wealth tax would need to apply broadly to all assets to ensure that it was not easy to avoid. Such a tax could raise significant revenue if it applied to the bulk of the UK's wealth – that would include the homes and pensions of the middle class.
'Trying to raise large amounts of revenue from only the very wealthy would make the UK a less attractive place for those people to live.'
Forgetting the practicalities, the more important point is that we already effectively have wealth taxes in this country.
Death duties
Unlike countries such as Australia and Sweden, Britain applies inheritance taxes on the estates of the deceased. If this isn't a wealth tax, I don't know what is – and it's getting more pernicious.
The tax-free allowance has been frozen at £325,000 per person since 2009, and despite an extra allowance for passing on main homes, HMRC is collecting ever greater amounts as asset prices have risen.
From April 2027, unspent pensions will also be counted as part of an estate for inheritance tax purposes, which will send receipts soaring even higher.
Don't rule out more changes to death duties. It is still paid by a minority of estates and, while the very wealthy can take steps to limit tax bills, it is difficult to avoid.
There is room to cut back several reliefs further, and Rachel Reeves could scrap the complicated family home allowance.
VAT on private school fees
It shouldn't be controversial to say that it is immoral to tax education. If someone chooses to spend their money, hard-earned or otherwise, on schooling then that should not be penalised.
In an ideal world, state schools would be all brilliant, well-resourced and able to cope with all types of children. Ultimately, there would be no need for private education.
To decide to fund your family's education from your own funds shouldn't be considered a 'luxury', which of course is what VAT was intended to tax. This is a wealth tax, pure and simple, driven by ideology and class warfare.
Council tax premium
It was Michael Gove who decided to grant councils the power to charge extra council tax on second homes.
Since April, when the powers came in, local authorities up and down the country have been sending bills to shocked property owners.
In some places, you could argue the dire shortage of homes for local people justifies squeezing out holidaymakers but, in many cases, this is just a way to extract more tax from those deemed 'wealthy'.
Many down from Londoners (DFLs) can afford to cough up, but other families are being forced to sell properties cared for for generations, often in remote places where there is no local demand for housing.
There have long been calls to reform council tax to make the system fairer across the country. Millions of homes pay higher council tax than Buckingham Palace.
A Chancellor with little left to lose (know of anyone that fits that description?) could announce a once-in-a-generation redrawing of council tax, which would almost certainly hit London and the South East the hardest.