One of the most difficult questions in politics right now is why Labour will not increase taxes on the wealthy. They could, and they should.
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This is the transcript:
Why won't Labour tax wealth?
Everybody from your grandma to the cat thinks that's what Labour should do because it's glaringly obvious that there has to be more tax paid by somebody in the UK, and even Labour themselves say those with the broadest shoulders should bear the burden - and they are the wealthy.
But Labour won't do that.
Now, let's be clear. I'm not asking for a wealth tax because wealth taxes are impossibly difficult to create and impose, and they would take years to put in place, and even if that was done, they would be a nightmare to operate.
But we could increase the highest rates of income tax.
We could charge national insurance right across the board when it comes to earned income.
We could create an alternative to national insurance to be imposed on rents and interest and dividends above a set limit year which would not affect most people at all.
We could equalize the capital gains tax rate and the income tax rate, and that almost invariably only affects the wealthiest people.
And we could cut the tax relief for some of the wealthiest in the country by, for example, restricting the pension tax relief to the basic rate of income tax instead of the highest rate that a person pays.
And we could cut the rate of tax relief on gifts to charity so that when the wealthy give money to charity, they don't actually get tax back that the charity sees no benefit from.
We could do all those things.
We could raise, as a consequence, more than enough money to deal with all the issues that the UK government now has to face to make sure that it delivers what people need.
These changes would be simple.
They would be straightforward.
There would be a furore, but that always is about a tax change, so let's not worry about that.
The fact is, the country would be a better place as a result.
So, why won't Labour do it?
Are all their friends wealthy?
Are all their sponsors wealthy?
Are they so desperate to be wealthy that they won't upset those people that they know who are?
Are they absolutely in hock to the City of London?
Those are the only explanations that I can supply, but whatever the answer is, they are getting this one horribly wrong.
Labour needs to tax the income and gains from wealth more. Then we'd have a better country, and they might even have a chance of being reelected.
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Prosecution of tax evaders is down. Quote from Prem Sikka in this article
https://www.theguardian.com/business/2025/mar/30/prosecution-of-people-who-help-clients-evade-tax-in-uk-falls-by-75-in-five-years
Noted
Just so Richard, Labour leadership are clueless or more likely sold their souls to Capital. However Labour could alternatively/simultaneously attack the cost of living in key areas, through aggressive policy in key areas. For starters – energy and housing/rents.
But we should be really amazed, nay staggered, that Labour are so naive in governing this country. They enlist as many labour supporting organisations, and its members, without giving anything in return. That loyalty is being squandered and thus idly benefiting the likes of trumpist Reform.
You say that we could increase the highest rate of income taxation. I was reading another site that said the highest rate goes up to 67% from next month. The calculations was based on someone earning exactly £100k, it assumed employers NI is actually paid by the employee and then looked at what the effect would be if they then generated an extra £115 in income.
Subtracting £15 (employers NI), £40 PAYE, £20 (personal allowance withdrawal), and £2 (employees NI), meant that £77 of that £115 went to the government.
Is that really true that it’s already scheduled to go up, 67% income taxation seems awfully high and is likely to change that person’s behaviours. I mentioned this on the other site I mentioned and the first reply was “I can refute that claim of it being the highest rate with a one word answer”
‘What is that’ I asked
“Scotland”
I answered all this in the Taxing Wealth Report. Please read it. I actually made proposals to remove these anomalies.
This is the problem with your line of thinking..
https://www.steeltimesint.com/news/steel-mogul-to-leave-uk-following-non-dom-crackdown
Why is that a problem?
He pays not a lot in income tax
His businesses will stay
The net impact – totally insignificant
It has maybe become cultural now in Whitehall not to tax wealth because it is seen as a virtue?
I have said before that the tax system is now a form of virtue signalling.
Taxation – for so long seen as negative and mentioned in the same breath as death – is now also associated with what is perceived as personal failure. If you can’t pay for it yourself, you are nothing.
The thing is of course is that we don’t really need the money of the rich to pay for anything if Labour accepted the reality of MMT. But the real function of tax would be to control inflation.
But Reeves, Starmer and their handlers believe that taxes pay for services that people of ordinary circumstances need. It’s just a belief, conviction – just like Thatcher.
And that conviction also extends to the mistakes they are making about the funding of those services. They are obviously making working people pay their own way for the services they need because Whitehall thinks that the rich don’t need them.
So we are seeing a form of compartmentalisation in tax affairs where employment itself is going to be taxed – employment is now (for want of a better word) a ‘cost centre’ for government expenditure. It is just the sort of accounting exercise a junior accountant like Rachel Reeves (if she were ever even that) would think was a good thing to do. It’s so naive and it is proving to be so in reality too.
And it also signals to their funders/rich that they are not expected to even pay for the rest of society – which they don’t anyway, but believe that they do because they do not understand the legitimate legal and fiscal nature of tax.
In summary, Margaret Hilda Thatcher is dead, but her dogma is alive and well in what she said her self was her greatest creation – Blue Labour.
Thatcher also started what has become a steady decline in the power of ordinary people to object. Famously she emasculated the power of Trades Union, which had the unfortunate and very serious side-effect of destroying the training ground for many left-wing politicians. She also started the trend towards outlawing protest, which is now almost complete and which LINO seems completely happy to preserve.
I didn’t realise at the time just how effectively Thatcher would initiate the total destruction of everything that made British culture special.
Agreed
One perhaps unappreciated result of the Miners Strike was the effect on subsequent policing. At the end of it, a lot of descent, career officers simply handed in their notice, because of the things they had been ordered to do, perhaps the majority. So almost overnight the standards of policing for the entire population underwent a serious downgrade, of benefit to no-one. 40 years on, things have not much improved.
What’s the problem with a wealth tax? I feel that taxes on a persons salary are rather unfair. Also, truly wealthy people don’t earn their money through a salary. Salary taxes are taxes on earned wealth. I’m therefore attracted to the idea of a wealth tax but you’re saying such a thing is impractical. Why? I know you’ve written a thorough report that I’m sure would answer my question but I prefer to ask here. Thanks!
https://www.taxresearch.org.uk/Blog/2024/05/10/wealth-taxes-wont-work/
If you’ve been noticing how LINO has behaved for the last 2 or 3 years, one thing has stuck out. A fear of doing or saying anything which the Tories (and now the wealthy) can attack. Prior to, and during, the election campaign, the whole narrative was wishy washy. It was full of aspirations rather than hard policies. They went out of their way to avoid saying anything which might leave them open to challenge. Starmer is still in that mode; he talks in ideals, not facts. “It’s wrong that…..” or “poverty is….” or “” it’s in Labour’s DNA….
Look at the way they are attacking Reform. Not by saying “you’re racist bastards and fascist scum” but by producing adverts in Reform colours to out-Reform Reform. Trying to be “hard”. “Taking difficult decisions”. And so on.
I think that Starmer is actually still frightened of “the ruling class”. The lower middle class boy who was awed by posh kids who made him feel inadequate. All this nonsense about myfatherwasatoolmakerandmymotherwasanurseandwelivedinapebbledashedsemi – he’s still uncomfortable in the presence of people he sees as “superior”. So he does what they do, only more so, in the hopes that he will be asked to be in their gang. But he never will.
So it’s easy to take away money from the poor and the old and the disabled. Because he’ll be liked by the posh boys. He simply doesn’t have the courage to stand up to the bullies and the business leaders and the very wealthy. By stamping on the poorest, he can join the posh boys’ gang.
The trouble is, he’ll never be one of the posh boys, who secretly hold him in contempt.
That’s my two’penneth, anyway.
I am so bored by his outright fear of fascists
I might just squeak into taxable wealth and pardon my “french” but so I f’n should. It should be boasting points. Ha! They taxed me! Honestly. Tax us. You silly #£%&s It baffles me. I am not going to move to wherever. My kids are in local schools. We work. We marginally wealthy folk actually like living here and not because it is low tax. It would be a LOT better if rural A roads had white lines on the verge or whatever. And don’t even talk about social disorder unless there is a wealth tax in the same paragraph. Chuffing heck. Tax wealth.
Morning Richard
In reference to Lakshmi Mittal I think it is a problem. The UK Government never got the chance to actually extract enough money from him before he decides to “do a runner”.
The crux of the issue is what “the man / woman” in the street defines as those that this should be targeted at.
Should this be targeted at say a household income of £150K. The man in the street may say no if they are a train driver and his nurse wife since they may well have a household income of £150K. I believe that salaried employees should not be counted since the true wealthy are wealthy because of other income streams – Capital Gains, Dividends, Expenses, Private Equity Vehicle.
I am not sure what conclusion you are reach8ing – but you seem to want to exclude employees on £200,000 plus a year
Why?
You also do not seem to realise that we do not have family taxation in the UK
Hi Richard
I think the point I wanted to make was that going after someone making £200K is chasing crumbs. The money required by the UK Government to do all the things that will make the UK a better place is a vast amount. Secondly there are many individuals scooping money outside of PAYE. This maybe done legitimately or it may even be fraudulent.
Why not use the data?
I have.
See the Taxing Wealth Report 2024. Just Google it.
I rather think that forging relationships with corporations run by the likes of Peter Thiel and Larry Fink and increasing taxes of any sort on the wealthy are probably more or less mutually exclusive.
I say we tax workers even harder!. Squeeze them till they squeak—because let’s face it, we’ve got no other option. The super rich? Untouchable. They treat tax laws like suggestions.
I disagree it will not work if it is done properly and is adaptable. I believe we can tax the super-rich fairly—if we actually have the will to do it. Human beings are incredibly creative when we need to be.
We live in an age where we can edit genes, land robots on Mars, livestream a surgery from inside someone’s artery, resurrect extinct animals, and probably upload a cat’s consciousness to the cloud for fun…
But ask society to make billionaires pay a fair tax? Suddenly it’s, “Whoa now, let’s not get too ambitious.” If there’s a will, there’s a way!