I ask this question because, as the FT has noted:
In the Taxing Wealth Report 2024, I argue for a number of reforms to pension tax relief for the wealthy, and most particularly, a restriction on the tax relief available to higher-rate taxpayers on the pension contributions that they make. I would only provide this relief at the basic rate of income tax. The savings that might result could be as large as £14 billion a year, permitting redistribution within the UK economy whilst also reducing income and wealth inequality.
Let me be honest, I have no idea of the IFS have read the Taxing Wealth Report 2024. But this call, coming soon after their suggestion that capital gains tax and income tax rates might be aligned, which I have also made, suggests that this is either possible or that we have both reached the same conclusions. Either way, this is helpful, because change is essential.
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You can tell how inept the British have become in that there’s very minimal understanding that an important factor in money creation is the ability to withdrew some of it through taxation to counter inflationary pressure. Further there’s little understanding that this means that those who most benefit from higher incomes and government subsidies should make a higher contribution than those who receive much less. We’ve now ended up with meaningless general elections where a really important issue like tackling global warming has effectively been swept under the carpet along with other pressing government spending issues. This is very much a “clown” general election we’re witnessing that predictably doesn’t warrant much attention!
I am not happy that climate change is off the agenda. I think that it is a foregone conclusion that my constituency will flip from Tory to Labour. The most effective use of my vote is probably making sure that the green party candidate gets the deposit back.
Would the labour party believe that I voted them because of the serious problems to global warming? The answer must be no.
I dare say the IFS has read what you have written but they have been suggesting both reform of pensions taxation and alignment of capital gains tax rates with income tax for some time.
A couple of examples: capital gains rates in 2022: “There is a strong case for aligning CGT rates with the tax rates on earnings and dividend income.”
https://ifs.org.uk/sites/default/files/2022-08/08chap10.pdf
Pensions in 2023: “whether a better way of taxing pensions is needed. In short: it is.”
https://ifs.org.uk/publications/blueprint-better-tax-treatment-pensions
More important is whether Labour has read it. And can explain why they choose to take none of the options on offer, but instead falsely assert there is no money to improve public services.
If IFS is a responsible institution they should be showing that they are aware of current discussion in the public domain – including your TW report.
They ought to at least engage with what is and isn’t ‘borrowing’ and ‘national debt’
The IFS is basically a propaganda machine for wealthy Neoliberals!
I did reply to Paul Johsnons tweet https://x.com/PJTheEconomist/status/1798301204919046332 on last night’s debate….
..’ No openness about tax and spend. Big direct tax rises are nailed in over next 3 years whoever wins’
I asked him to go further and question how sensible was the fiscal rule both parties are signed up to – and to explain what he means by ‘they will need to borrow’ – and that not all the so called ‘national debt’ is ‘borrowed’ or needs to be ‘repaid’.
Presumbaly he/they will do no such thing – IFS has its own version of disingenuousness – UK in such deep trouble given the wreckage of public services – surely it behoves a ‘think tank’ to actually think..
I would imagine everyone has read it. You are well known an respected contributor to public discourse in this field. My prediction is that Starmer will equalise CGT and IT treatment and restrict Pension contributions to basic rate by the end of the next Parliament.
It would raise £24bn, more than enough to do what he wants
So why did Starmer put himself in a straitjacket a long time ago by announcing there’d be no taxes increases for the wealthy rather than having the nous to say there’d be a review of taxes and subsidies under his administration to ensure their was fairness and balance in both areas! What a mutton-head! Now Sunak has scored points by saying Starmer will increase taxes on “ordinary people”!
Starmer and Reeves said there would be no increase to income tax, NI or VAT. Equalising CGT and IT with income tax does NOT increase income tax. Neither does reducing the higher rate tax rebate on pension contributions.
The IFS possess not a scintilla of imagination or creativity; indeed imagination is not in their remit, I suspect. They simply process calculations based on a fiscal status quo. It amy well be that they have read the Taxing Wealth Report; certainly the current taxation, interest rates and living costs (mortgage rate rising in some cases agen, interest rate not coming down), and a ludicrous over-selling of Britain’s current economic position and supposed recovery by the PM, whom it is difficult to trust, give little prospect of anything but more pain, unless some quite radical changes in the approach to tax are taken. Other than you, Richard, who has come up with good, fresh ideas on tax? I suspect that is going to be a short list, if we follow the principal Party lines, or most of the conventionally quoted, oxymoronic fiscal ‘think-tanks’ ideas on originality or progress.
I agree Richard has been remarkably imaginative and industrious in his Taxing Wealth Report and added greatly to the development of MMT. What a shame the country is so heavily weighted down by the Neoliberal ideology of the wealthy that seems to pervade everything including what was formerly a progressive Labour Party in the immediate aftermath of the Second World War.