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Friday, October 25, 2024

Filling the gap

With less than a week to go to the first Labour budget since 2009, speculation is rife as to what exactly Rachel Reeeves plans to do to raise the £40billion she says is needed to fill the black hole inherited from the Tories, while shoring up our long-neglected public services.

One route is to tax wealth, an area long-neglected by government, with the result that those holding substantial assets are paying proportionally less tax than somebody on the basic rate.

The Mirror reports on new research that has found that a 2% tax on the fortunes of the super-rich over £10million could raise £24billion.

They add that this extra tax would be paid by the very wealthiest 0.1% of the population and help fix the crisis-hit NHS or massively reduce staggering levels of child poverty:

Last week a survey found a majority of voters (63%) would support a 2% tax on assets over £10million while just 12% were opposed. Earlier this week a group of 30 MPs also called on Chancellor Rachel Reeves to impose the tax on "extreme wealth"- rather than any spending cuts.

The CEO of 38 Degrees Matthew McGregor said: "The NHS has been declared officially broken and the ‘black hole’ in public finances that the Government has inherited is a well-publicised problem - one that the British public want to see bold solutions to. A Ten Million Tax of 2% on assets over £10 million is just the kind of measure that voters back.

"A move like this would see the ultra-rich contribute a tiny proportion of their vast wealth - and in return, this money could be spent making a huge difference to millions of peoples’ lives - whether by funding 1.8 million more cancer treatments or lifting families pushed to the brink by the cost of living crisis, out of poverty."

He added: “At the budget next week, there are big decisions to be made and a big opportunity for the Government. By introducing a Ten Million Tax, they can prove who they are here to serve, and finally put our country back on track.”

The fact is that if we want better public services, we have to pay for them. And that means that tax revenues have to increase. Higher growth could fill that gap, but we are not going to get that without significant investment (and some sort of reprochment with the EU) and so we need to raise the cash in the most equitable way possible.

If that means taxing wealth then I am okay with that.

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