\n<\/p>\n
Keir Starmer and Rachel Reeves have been urged by a group of the world\u2019s leading economists to use the autumn budget to prepare Britain for the introduction of a new wealth tax to tackle \u201cextreme\u201d levels of inequality.<\/p>\n
With the government under pressure to raise taxes, the group of economists, including the French expert on wealth inequality Thomas Piketty, said the UK prime minister could raise \u201ctens of billions of pounds\u201d while positioning Britain as a progressive leader on the world stage.<\/p>\n
In a letter shared with the Guardian, the experts warned that wealth in Britain \u2013 like many rich countries \u2013 had become concentrated in fewer and fewer hands in recent decades at the expense of the nation at large.<\/p>\n
It comes as the chancellor, Rachel Reeves, faces mounting pressure from senior Labour figures and trade unions to raise taxes on wealth to cover a multibillion-pound shortfall in the public finances.<\/p>\n
\u201cKeir Starmer and Rachel Reeves can build a tax system fit for the 21st century \u2013 that promotes fairness, first-class public services and good living standards for everyone,\u201d the economists wrote.<\/p>\n
\u201cWe cannot allow extreme wealth inequality to deepen while millions of people are consigned to struggle for a basic quality of life. A progressive wealth tax is a critical step forward, and one that we urge the UK government to take.\u201d<\/p>\n
Signatories of the letter include the leading Indian development economist Jayati Ghosh, Jos\u00e9 Antonio Ocampo, a former Colombian finance minister and ex-UN undersecretary-general for economic and social affairs, and the globally acclaimed economist Ha-Joon Chang.<\/p>\n
The group of more than two dozen signatories said a \u201cmodest\u201d net wealth tax on assets of more than \u00a310m could raise \u201cenormous sums of money\u201d that could be used to avoid a return to austerity while tackling rampant inequality.<\/p>\n
Reeves is reportedly prepared to reject backbench Labour demands for the introduction of a new tax on wealth, although has so far publicly refused to rule out the measure. Advocates include Neil Kinnock, the former party leader.<\/p>\n
Several of her cabinet colleagues have poured cold water on the idea, including the business secretary, Jonathan Reynolds, who last week publicly denounced a new levy as a \u201cdaft\u201d idea that would not work.<\/p>\n
It is believed the Treasury would prefer to use existing features of the tax system \u2013 including levies on capital gains, inheritances and pensions \u2013 to raise money from rich individuals rather than dedicate resources to create and administer a new levy, which could have mixed results.<\/p>\n
The Institute for Fiscal Studies has argued that a dedicated new levy could deter investment in Britain and would be a \u201cpoor substitute for properly taxing the sources and uses of wealth\u201d through other means.<\/p>\n
It said that implementing a wealth tax would be difficult, requiring a new administrative apparatus to value assets, which could be open to rich, well-advised individuals shifting around their holdings to game the system. Critics also say super-rich individuals could leave the UK.<\/p>\n
While stand-alone wealth taxes are used in some European countries \u2013 including Spain, Norway and Switzerland \u2013 several other leading nations \u2013 including Austria, Denmark and Germany \u2013 have abandoned them.<\/p>\n
skip past newsletter promotion<\/p>\n
Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n However, the leading economists said it would be possible to overcome the difficulties associated with the design and administration of a new wealth tax, urging the UK government to launch a consultation at the autumn budget.<\/p>\n \u201cStarting at the autumn budget the pieces of the puzzle \u2013 from consultation to design \u2013 can be collected to allow the government to roll out a wealth tax within this parliament. This could improve people\u2019s lives in years to come and avoid austerity for key services we all benefit from,\u201d they said.<\/p>\n The campaign group Tax Justice UK, which coordinated the letter, has estimated that a 1%-2% wealth tax on assets of more than \u00a310m would affect only 0.04% of the population, and could raise up to \u00a322bn for the exchequer a year.<\/p>\n Ghosh, backing the call for a wealth tax in the UK, said: \u201cNot only is a net wealth tax a vital step to tackle inequality and improve living standards, but it is obviously best done with international cooperation.<\/p>\n \u201cKeir Starmer and Rachel Reeves can position the UK as a progressive leader on the world stage. We urge them to work collaboratively with the international community to ensure that the super-rich pay their fair share, wherever they reside.\u201d<\/p>\n A Treasury spokesperson said Reeves was focused on growing the economy to strengthen the public finances.<\/p>\n \u201cWe are committed to keeping taxes for working people as low as possible, which is why at last autumn\u2019s budget, we protected working people\u2019s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance or VAT,\u201d the spokesperson said.<\/p>\n","protected":false},"excerpt":{"rendered":" Keir Starmer and Rachel Reeves have been urged by a group of the world\u2019s leading economists to use the autumn budget to prepare Britain for the introduction of a new wealth tax to tackle \u201cextreme\u201d levels of inequality. With the government under pressure to raise taxes, the group of economists, including the French expert on<\/p>\n","protected":false},"author":1,"featured_media":12747,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[844,6405,478,2656,1347,101,1168,3329],"class_list":{"0":"post-12746","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-politics","8":"tag-economics","9":"tag-economists","10":"tag-prepare","11":"tag-reeves","12":"tag-starmer","13":"tag-tax","14":"tag-top","15":"tag-wealth"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/12746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12746"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/12746\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/12747"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}