Is it time for politicians to start discussing a wealth tax?
‘Our donors would never put up with it,’ David Cameron declared but the need for Rishi Sunak to replenish government coffers means the issue has once more reared its head, writes John Rentoul
Rishi Sunak, the chancellor, is looking at ways to raise funds to repair the damage of coronavirus to the public finances. Last week the Wealth Tax Commission, set up by academics at Warwick University and the London School of Economics, proposed a one-off tax on personal wealth at a rate of 5 per cent that could raise £260bn. How realistic is this plan?
Gus O’Donnell, the former cabinet secretary who wrote the foreword to the report, quoted Sunak, who said in July this year: “I do not believe that now is the time, or ever would be the time, for a wealth tax.” Nevertheless, Lord O’Donnell urges ministers to keep an open mind, pointing out the lack of alternative good options.
He wrote that “it is broadly accepted” that taxes will eventually have to rise, and that the Conservatives are bound by manifesto promises not to raise income tax, national insurance contributions or VAT. If they are to put up taxes, he said, it means breaking those pledges, “or it means thinking seriously about new taxes”.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies