The UK faces a £40bn deficit, leading to calls for a wealth tax to address public finances. The National Institute of Economic and Social Research attributes the deficit to increased borrowing and a sluggish growth outlook. Many within the Labour Party advocate for a wealth tax, but there are concerns over its feasibility. Experts suggest that reforming Capital Gains Tax may be a more practical alternative, potentially raising significant annual revenue while addressing loopholes in wealth taxation. Critics argue a wealth tax could drive out wealthy individuals and has been rejected by other countries.
Implementing a wealth tax in the UK poses significant challenges due to HMRC's limited data on wealth, making timely delivery improbable and difficult.
Reforming Capital Gains Tax could provide a more effective method of generating revenue from wealth, estimated to raise over 13bn annually by the end of the Parliament.
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