Centre-left think tank the Resolution Foundation is one of many groups calling for Labour to attack “wealth inequality” by hiking capital gains tax (CGT) and inheritance tax (IHT) in her Halloween Budget on 30 October. They also want her to hammer tax breaks on private pensions.
They think that supposedly “unearned wealth” isn’t taxed as heavily as it should be, and want Reeves to put that right.
There’s a problem, though. An awful lot of this wealth has been earned, often the hard way.
Hiking capital gains tax bands will hammer those who have built their own businesses from scratch, for example.
When they sell, they could hand over 45% of its value to HMRC. And that’s on top of all the taxes their enterprise has paid over the years, everything from corporation tax to employer’s national insurance and VAT.
Labour’s CGT raid will also hammer buy-to-let landlords. They’ve become hate figures on the left, and there are definitely some dodgy ones out there.
But the good ones bought their first properties using deposits they’d every much earned, then took a risk by taking about a big loan, and worked hard to do up and maintain their properties.
I don’t see the rental income they get in return as unearned.
Whereas if somebody had handed me £7,500 towards the cost of buying some nice new clothes, I probably would. And I’d probably have said: “Er, that’s a bid odd. No thanks.”
Reeves took the money, though. Which puts her in an awkward position, if you ask me.
She did declare the donations, although she didn’t explicitly state that the money was spent on clothing, which apparently you have to do.
It also comes on top of another £350,000 of freebies and payments that she’s declared.
This comes at awkward time for the Government, given that PM Sir Keir Starmer and his deputy Angela Rayner are both fond of unearned goodies, too.
In fact, Starmer likes them more than any other MP. I get that. Freebies are nice and fun to have. Another benefit is that you don’t have to pay tax on them.
Everybody likes a freebie but you have to be wary of accepting them if you’re about to launch a tax rate on people who aren’t lucky enough to benefit from £7,500 worth of free clothes.
Especially those who need an extra jumper or two, not to look good on the telly, but to avoid freezing to death after Reeves axed their Winter Fuel Payment.
It almost makes me wish Jeremy Corbyn was still Labour leader and his Marxist chancellor John McDonnell was about to deliver his first Budget.
We’d probably be even more terrified but at least they’d be coming for our money from a point of principle. They couldn’t be bought for the price of a nice trouser suit.
I really don’t know how Reeves is going to be able to stand up on October 30, and announce a series of tax grabs on the nation’s wealth.
Under the pretence that they haven’t actually earned it.
While potentially wearing a trouser suit that she blagged for free. And while Starmer looks on wearing a smart pair of designer spectacles that he also got for free.
If Reeves really wants to go after unearned wealth, why not introduce a freebie tax? That one would definitely be popular, except with the Labour front bench.
