The Institute for Public Policy Research (IPPR) have reported that a new tax system in the UK which brings rates on wealth and assets into line with those on income.
The report claims that bringing taxation for assets into line with income tax rates could raise over £90 billion over the next 5 years.
The IPPR also calls for the removal of the capital gains tax (CGT) regime, claiming that CGT rates are ‘substantially lower’ than they were pre-2008, and are currently taxed at much lower rates than income from work.
These lower tax rates for the wealth are ‘fundamentally unfair” claims the IPPR. They ‘distort economic behaviour and create opportunities for tax avoidance’, it added.
The IPPR recommends abolishing separate tax rates on capital gains by incorporating them into the income tax schedule. It also suggests that the current exemptions, allowances and reliefs are removed, bringing capital gains in line with the taxation of earnings from work.
Quote from Nigel Holland:
“Rates should be similar for all types of income, the current tax system favours those who are more well off.”