In a series of videos (the production of which has been delayed by Jack Lennon, my video editor, moving house) I am looking at practical ways to tackle the problems that millionaires are creating in society, largely as a result of increased inequality.
In a previous video, I suggested that national insurance creates an incredibly unlevel playing field in UK taxation, with the income from wealth taxed as a result at much lower rates than the income from work is.
There is an obvious way to tackle this inequality. It is called an investment income surcharge. We had one in the UK for more than 20 years, but Margaret Thatcher got rid of it. It is time that we had one again, creating an additional 15% tax charge on income from wealth of more than £10,000 a year.
This video is one of a series. All of the videos are linked from this page on the Tax Research wiki, which is being updated as new videos are produced.
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Hear, hear I say.
Thank you for this great series, Richard.
Somewhat related, the following article has a link to a recent report on the relationship between inheritances and wealth inequality:
https://www.abc.net.au/news/2021-12-08/wealth-transfers-and-wealth-inequality-productivity-commission/100679000
Admittedly it is an Australian study, but I thought it might be worth passing on in case some of its analysis and findings were still of interest to you.
I will take a read
Thank you
Like this?
https://en.wikipedia.org/wiki/History_of_taxation_in_the_United_Kingdom#Income_tax_2
“In 1971 the top rate of income tax on earned income was cut to 75%. A surcharge of 15% kept the top rate on investment income at 90%.[17] In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98%, the highest permanent rate since the war. This applied to incomes over £20,000 (£213,089 as of 2020).[7]”
Yes
[…] The report is well worth reading, I am borrowing the charts to emphasise the message. First, this is what justifies all I am doing on taxing wealth: […]
Is this not adding to the complexity of the tax system ? Would it not be simpler and fairer to merge the NI contributions into income tax ? i.e. basic rate tax would increase to 32 %, Higher tax to 52%.
This one is really easy….
Much easier than merging IT and NIC
I have only just got round to watching this – am at home with the Lurgi at the moment.
One comment I might make is that if the intention is to create a level playing field between earned & unearned income I would suggest that if you pay the Investment Income Surcharge (IIS) and are of working age then you get credited with your National Insurance Contributions for any years you pay the IIS.
In practice I suggest that it wont mean anything BUT it will achieve the intended aim of equalisation.
Noted