Wes Streeting is advocating for a wealth tax, arguing that the current tax system is unjust and disproportionately impacts working individuals.
The former Health Secretary is proposing to align capital gains tax rates with income tax rates, potentially generating £12 billion annually. Currently, higher or additional rate taxpayers are taxed at 24% for gains made in the fiscal year. Under Streeting’s proposal, this rate would be brought in line with income tax rates of 40% for higher rate taxpayers and 45% for additional rate taxpayers. Additionally, the plan aims to close loopholes used to convert work income into capital gains, such as through personal service companies or stock payments.
Streeting highlighted the disparity between tax rates paid by individuals like his family member who works as a cleaner and her landlord, emphasizing the need for a fairer system that does not penalize labor. He stressed the importance of a wealth tax that treats all income equally, whether derived from assets or hard work.
Various organizations, including the IFS, Resolution Foundation, Tax Policy Associates’ Dan Neidle, and the Labour Growth Group, support taxing gains at the same rate as income, but only above a reasonable return on the initial investment.
Despite calls from multiple sources to increase taxes on the super-wealthy, the Labour Party has resisted such measures to bolster government revenue and maintain fiscal equilibrium. Rachel Reeves previously defended the government’s tax policies, asserting that the taxation system strikes the right balance. Last year, Dale Vince, a significant taxpayer, proposed a 2% tax on assets exceeding £10 million, estimating an annual revenue of £24 billion affecting only around 20,000 individuals.
