Labour backers desire a wealth tax however they gained’t cease on the rich

I’m not wealthy, by the best way. That’s the factor about wealth taxes. Once the precept has been launched, everyone seems to be liable to paying them.

I’ve paid as a result of my accomplice is Norwegian and I’ve lived over there, and her nation is among the few on the planet to impose this controversial tax.

That will quickly change if the Labour Party’s commerce union backers have their approach.

The Trade Unions Congress (TUC) has referred to as on Keir Starmer to launch a tax raid on the rich to fund his spending plans if he wins the following election as appears doubtless.

Under its plan, rich people would pay a one-off tax of 1.7 % on any property over £3million. 

This would rise to 2.1 % on any wealth above £5 million, then 3.5 % on property over £10million.

The TUC’s proposal comes with a dollop of sophistication envy, with common secretary Paul Nowak accusing rich British households of “hoarding wealth and getting richer and richer, while working people struggle to get by”.

He added: “Porsche sales are at record highs, bankers’ bonuses are at eye-watering levels, and chief executive pay is surging.”

There is at all times a marketplace for bashing the wealthy and I agree with the precept that those that have extra, ought to contribute extra.

Although I’d level out that they do already, with the richest one % contributing greater than a 3rd of all UK tax revenues.

Instead of demonising them, we’d thank them. And should not begrudge them the odd Porsche, offered they earned their cash pretty and pay their taxes in the identical spirit.

The TUC claims it has drawn inspiration from Spain’s solidarity tax, a brief cost on the higher off to assist the nation survive the cost-of-living disaster.

Nowak’s language speaks extra of division than solidarity. That’s not my fundamental concern, although. 

My huge fear is {that a} UK wealth tax will not be a one-off and it gained’t cease on the rich, both.

UK taxes by no means do. Neither does Norway’s wealth tax.

The threshold for paying Norwegian wealth tax is 1.7 million krone. That is simply £128,302 at immediately’s trade price.

That’s proper. You solely want round £130k of property to pay it.

Although that excludes the worth of your fundamental house and pensions, just about all the pieces else comes into its orbit. Cash within the financial institution, funding funds (Norwegians do not an Isa allowance) and even the worth of your automobile.

You do not need to be notably rich to pay it, in different phrases. That identical will apply to a UK wealth tax, given time.

The Treasury has an extended and inglorious historical past of introducing taxes that begin small then develop very huge. Income tax was solely two % at first.

Once the precept of a wealth tax has been set, Brits are in bother. That one-off levy will quickly change into an annual cost. That £3million threshold will fall yr after yr, whereas the proportion taken will rise and rise.

READ MORE: Pensioners can earn £27,000 a year without paying penny in tax

It’s taking place in Norway. In 2021, its wealth tax stood at 0.85 %. In 2022, it nudged upwards to 0.95 %. Today’s left-wing authorities has hiked that to 1 % (and 1.1 % on wealth above £1.5million).

This wasn’t a lot of a difficulty for a modest earner like me, but it surely’s an enormous situation for Norwegian enterprise house owners as a result of they’re charged wealth tax on the worth of their firm.

This results in the weird scenario the place they’re compelled to promote shares yearly to satisfy their enormous wealth tax invoice, even when their agency is shedding cash.

Its millionaires and billionaires are fleeing in droves, and taking their tax revenues with them.

Norway can at all times pump out extra oil and gasoline to prime up its coffers, however the UK does not have that possibility.

We desperately want to carry onto our wealthy individuals and needs to be discovering methods of making extra of them.

I believe Starmer and his Chancellor Rachael Reece will need nothing to do with a wealth tax. Denis Healey did not contact it when final proposed within the Seventies.

He mentioned it was too advanced and will trigger extra bother than it was value.

Let’s hope I’m proper. Even if the wealth tax does not catch you immediately, it is going to get you tomorrow.