Connect with us

Published

on

The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.

Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.

Please use Chrome browser for a more accessible video player

Lord Kinnock calls for ‘wealth tax’

Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”

While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.

Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.

Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer at the launch of the 10-year health plan in east London. Pic: PA
Image:
Will Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer impose a wealth tax? Pic: PA

What is a wealth tax?

A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.

It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.

The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.

Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.

A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.

Read more:
No wealth tax under a Labour govt, Rachel Reeves said in 2023

UN criticises Starmer’s welfare reforms and warns measures will ‘increase poverty rates’

Please use Chrome browser for a more accessible video player

Wealth tax would be a ‘mistake’

How could it work in the UK?

Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.

Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.

Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.

The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.

Which countries have or have had a wealth tax?

In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.

France and Italy levy wealth taxes on selected assets.

Colombia

Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).

The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.

Bogota in Colombia, which has a wealth tax
Image:
Bogota in Colombia, which has a wealth tax

Norway

There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.

Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).

Norway has both a municipal and state wealth tax. Pic: Reuters
Image:
Norway has both a municipal and state wealth tax. Pic: Reuters

The maximum combined wealth tax rate is 1.1%.

The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.

Spain

Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.

Madrid in Spain. More than 12,000 multimillionaires have left the country since a wealth tax was increased in 2022. Pic: Reuters
Image:
Madrid in Spain. More than 12,000 multimillionaires have left the country since a wealth tax was increased in 2022. Pic: Reuters

The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.

It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.

Switzerland

All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.

Zurich is Switzerland's wealthiest city, and has its own wealth tax, as do other Swiss cantons. Pic: Reuters
Image:
Zurich is Switzerland’s wealthiest city, and has its own wealth tax, as do other Swiss cantons. Pic: Reuters

It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.

Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.

Continue Reading

Politics

Archbishop of York Stephen Cottrell tells Nigel Farage ‘kneejerk’ migrant deportation plan won’t solve problem

Published

on

By

Archbishop of York Stephen Cottrell tells Nigel Farage 'kneejerk' migrant deportation plan won't solve problem

The Archbishop of York has told Sky News the UK should resist Reform’s “kneejerk” plan for the mass deportation of migrants, telling Nigel Farage he is not offering any “long-term solution”.

Stephen Cottrell said in an interview with Trevor Phillips he has “every sympathy” with people who are concerned about asylum seekers coming to the country illegally.

But he criticised the plan announced by Reform on Tuesday to deport 600,000 people, which would be enabled by striking deals with the Taliban and Iran, saying it will not “solve the problem”.

Mr Cottrell is currently acting head of the Church of England while a new Archbishop of Canterbury is chosen.

Pic: Jacob King/PA Wire
Image:
Pic: Jacob King/PA Wire

The Archbishop of York, Stephen Cottrell in 2020.
File pic: PA
Image:
The Archbishop of York, Stephen Cottrell in 2020.
File pic: PA

Phillips asked him: “What’s your response to the people who are saying the policy should be ‘you land here, unlawfully, you get locked up and you get deported straight away. No ifs, no buts’?”

Mr Cottrell said he would tell them “you haven’t solved the problem”, adding: “You’ve just put it somewhere else and you’ve done nothing to address the issue of what brings people to this country.

More on Migrant Crisis

“And so if you think that’s the answer, you will discover in due course that all you have done is made the problem worse.

“Don’t misunderstand me, I have every sympathy with those who find this difficult, every sympathy – as I do with those living in poverty.

“But… we should actively resist the kind of isolationist, short term kneejerk ‘send them home’.”

Please use Chrome browser for a more accessible video player

What do public make of Reform’s plans?

Nigel Farage at the launch of Reform UK's plan to deport asylum seekers. Pic: PA
Image:
Nigel Farage at the launch of Reform UK’s plan to deport asylum seekers. Pic: PA

Asked if that was his message to the Reform leader, he said: “Well, it is. I mean, Mr Farage is saying the things he’s saying, but he is not offering any long-term solution to the big issues which are convulsing our world, which lead to this. And, I see no other way.”

You can watch the full interview on Sunday Morning with Trevor Phillips on Sky News from 8.30am

Mr Farage, the MP for Clacton, was asked at a news conference this week what he would say if Christian leaders opposed his plan.

“Whoever the Christian leaders are at any given point in time, I think over the last decades, quite a few of them have been rather out of touch, perhaps with their own flock,” he said.

“We believe that what we’re offering is right and proper, and we believe for a political party that was founded around the slogan of family, community, country that we are doing right by all of those things, with these plans we put forward today.”

Sky News has approached Mr Farage for comment.

Farage won’t be greeting this as good news of the gospel – nor will govt ministers

When Tony Blair’s spin doctor Alastair Campbell told journalists that “We don’t do God”, many took it as a statement of ideology.

In fact it was the caution of a canny operator who knows that the most dangerous opponent in politics is a religious leader licensed to challenge your very morality.

Stephen Cottrell, the Archbishop of York, currently the effective head of the worldwide Anglican communion, could not have been clearer in his denunciation of what he calls the Reform party’s “isolationist, short term, kneejerk ‘send them home'” approach to asylum and immigration.

I sense that having ruled himself out of the race for next Archbishop of Canterbury, Reverend Cottrell feels free to preach a liberal doctrine.

Unusually, in our interview he pinpoints a political leader as, in effect, failing to demonstrate Christian charity.

Nigel Farage, who describes himself as a practising Christian, won’t be greeting this as the good news of the gospel.

But government ministers will also be feeling nervous.

Battered for allowing record numbers of cross- Channel migrants, and facing legal battles on asylum hotels that may go all the way to the Supreme Court, Labour has tried to head off the Reform challenge with tougher language on border control.

The last thing the prime minister needs right now is to make an enemy of the Almighty – or at least of his representatives on Earth.

Continue Reading

Politics

Supreme Court opened crypto wallets to surveillance; privacy must go onchain

Published

on

By

Supreme Court opened crypto wallets to surveillance; privacy must go onchain

Supreme Court opened crypto wallets to surveillance; privacy must go onchain

Crypto transactions are vulnerable to warrant-free surveillance, making privacy-enhancing tools essential for blockchain’s future.

Continue Reading

Politics

Indian court sentences 14 to life in Bitcoin extortion case

Published

on

By

Indian court sentences 14 to life in Bitcoin extortion case

Indian court sentences 14 to life in Bitcoin extortion case

A former BJP legislator and 11 police officials have been convicted for the 2018 abduction of a Surat businessman in a plot to seize over 750 Bitcoin.

Continue Reading

Trending