Millions of people would be forced to disclose the value of their homes, investments and assets under Liberal Democrat plans for an emergency tax on wealth.
By Robert Winnett, Political Editor
10:00PM BST 29 Aug 2012
The Deputy Prime Minister believes that the proposed tax, which would see an annual levy of about half a per cent on the value of a person’s total wealth, could raise billions of pounds to prevent deeper public spending cuts.
Experts warned that it would prove “impossible to administer” and other countries were abandoning similar taxes because of the complexities involved.
George Osborne said it might also “drive away wealth creators”. The Chancellor said: “I am clear the wealthy should pay more which is why in the recent budget I increased the tax on very expensive property transactions.
“But we also have to be careful as a country we don’t drive away the wealth creators and the businesses that are going to lead our economic recovery.”
Senior Tories described the tax plan as a “kite-flying exercise” by Mr Clegg which was highly unlikely to become government policy. The Lib Dem leader caused confusion when he said higher taxes on the rich were necessary if society was to “remain cohesive”.
Mr Clegg said: “If we want to remain cohesive and prosperous as a society, people of very considerable personal wealth have got to make a bit of an extra contribution.”
Tim Farron, the Lib Dem party president, said: “Income tax is one way of raising money. It’s probably more effective to do so by taxing wealth and assets. There are a range of things that can be done.”
He said the new taxes would involve Britons “opening their books” to HM Revenue and Customs.
“If a cleaner who is earning the minimum wage has to declare what he or she is earning, then so should somebody who is worth several million,” he said.
“Taxation is the subscription charge for living in a civilised society. Those people that have benefited most from society should pay their fair share, and that means opening their books.”
Simon Hughes, the party’s deputy leader, suggested that the new wealth tax could take the form of a 0.5 per cent charge on the value of all assets worth over a certain amount.
Iceland introduced a similar emergency wealth tax of 1.5 per cent on assets worth more than about £400,000.
Mr Hughes said: “This year there was a debate as to whether a mansion tax would be announced as part of the Budget. But there’s also an argument for looking at wealth taxes more broadly on a time limited basis.”
Experts said that the imposition of a wealth tax was fraught with difficulties.
John Kay, a professor at the London School of Economics, said such schemes were “almost impossible to administer” and were used in very few countries because they are “impossible to make it work fairly.”
A Conservative source said: “It is taking the tax systems almost two years to cope with a change to take away child benefit from higher-rate taxpayers.
“The idea that a whole new system to tax wealth can be put in place any time soon is laughable.”
No comments:
Post a Comment