Snapshot of _Rachel Reeves under pressure from shadow ministers to raise capital gains tax to revive public services_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/business/article/2024/jun/06/rachel-reeves-under-pressure-from-shadow-ministers-to-raise-capital-gains-tax-to-revive-public-services) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/business/article/2024/jun/06/rachel-reeves-under-pressure-from-shadow-ministers-to-raise-capital-gains-tax-to-revive-public-services)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
>One source said: “Rachel has between 10 and 12 measures she is looking at which she hasn’t yet announced, all of which will raise small pots of money, with the ambition they should add up to something all together.”
That's a lot of ~~tax increases~~ measures. How long before we get manifestoes?
If the manifesto provides any clarity on this I will be very surprised. It will repeat the "no increase to Income Tax" line, but not list a single tax that will be increased.
The Treasuries own analysis has modelled the impact of raising capital gains and increasing it reduced revenue.
https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-january-2023#capital-gains-tax
People have got to realise that the Laffer curve
is a real thing and if you increase taxes where capital is at risk, people will either not invest, they won't realise any gains or they will move money abroad to countries that don't tax as much.
No it doesn't. It shows that it will lose money in the first year and gain money every other year. The last line shows losing money but again this is only a 3 year forecast. People need to sell assets eventually at which point there will be a boon.
OP blocked me but you can see this in their link as well as here:
https://i.gyazo.com/7a3d0cf851bc6b715a99845558070b57.png
One can see that all the potential changes to cap gains rates raise money over a 3 year horizon except the bottom one.
No, it doesn't, all the figures have a -before then, meaning it loses the treasury money in every year they've projected.
EDIT* I don't have 'Ewannnn' blocked, but they have blocked me, as I can no longer see their posts, meaning they've blocked me.
As anyone can see from the linked Gov site, raising the higher rate of CGT by 10% (20% to 30%) does reduce Government revenue, so if the argument is to equalise CGT with income tax, that would be to 40% or 45%, which would lose even more revenue.
The Treasury modelled 20% to 30%, not 20% to 40% or 45%.
Isn't this a circular argument? You can't raise tax because when you use the Laffer Curve it shows tax revenues go down, which proves the Laffer Curve is correct.
In reality, there's very little empirical evidence that the Laffer Curvs exists in the way it's commonly deployed when arguing against tax rises.
I've provided the Treasuries own analysis.
EDIT: Either phonetune or Ewann have blocked me, as when I try and reply, I get the generic "Something is broken, please try again later.", meaning one of them has me blocked in this chain.
In response to 👇 it literally shows increasing CGT from 20% > 30%, reduces tax take by £170M in the first year, £1BN in the 2nd and £2BN in the 3rd.
But it doesn't support your conclusions. A lower tax take from CGT doesn't necessarily mean a lower overall tax take.
P.S. the suggestion that people will "move money abroad" shows how little you understand about this!
Changing stamp duty to be the seller not the buyer would be one way of raising money, as it would be easier to raise rates especially on larger properties.
Haha. Good one. More likely they will double dip and tax both parties. Taxing the seller could also freeze the market especially if the opposition pledges to reverse the policy at the next election.
Stamp Duty only raises 0.3% of UK tax revenue, so you would have to increase it a **lot** to generate any significant income.
Far better to abolish it altogether and then make it more easier for people to move home and take the increase in employment taxes if they can move to where the work is.
It is such a regressive tax. It adds unforeseen costs to moving (which is already expensive) and basically stops people from moving in and out of an area. I know it would increase prices in the short term but long term it will even out.
I would roll a smaller form of it into council tax with discounts given for improvements of the house (maybe in regard to eco initiatives).
Council tax is a recurring tax that is way more regressive, let the guys buying houses take the hit rather than literally everyone in the country just trying to live/rent
What about adding a few more bands? The rates top out at around a house value of 320k in my area, and there are tons of properties worth several million.
Adding more bands isn't a bad idea.
However do keep in mind that the band value is based on what the house would have been worth on 1 April 1991 and not what it is valued at today.
> So they pay corporation tax on the money made through the job.
After which they will either pay income tax if they draw it as a salary, or dividend tax if they receive dividends.
None of which is tax dodging....
I suppose the one thing this doesn’t take into account is that the self employed don’t have their pension/benefits/holiday counted for like the PAYE employee which in some cases will make up the difference. Not totally but I’m happy to be PAYE and have all the benefits that takes care of.
its not morally wrong, because you don't understand the working model. Just because you're a single man consultancy doesn't mean you're a perm employee.
Small business pay an incredible ampunt of tax, and you're thinking that corporation tax, VAT, income tax, NI, and tax on dividends don't count because its not PAYE?
you don't know what you're talking about. As a one man consultancy, I pay more in tax than I ever did via PAYE as a permie.
20 billion doesn’t come close to what mega corps are avoiding. Also that money ends up in the economy anyway, Big John down the road isn’t offshoring his money out of the country, he’s spending it.
Literally by definition it's not tax avoidance. Following the letter and spirit of the law is by definition not tax avoidance.
> Joe Smith (Random name for limited company/sole trader) gets to pay the lower corporation tax on most of the money he makes and easily cook his books saying "oh well I only made income of £11K really."
You're comparing apples and oranges here. You're suggesting that both John and Joe are otherwise completely identical which is not the case here if one of them if self-employed. If Joe is a tradesman, how would they be an employee of their customers? If Joe is a contractor, same again? If you're referring to the few examples of someone being a contractor but otherwise in every other sense a FTE, then that was sorted (albeitly in a really cack-handed way) with IR35.
The vast majority is from the part you rightly point out about paid in cash or partially logged i.e. tax evasion.
And most people in this country work for small businesses which are able to exist because of the tax regime which rewards the business owners. Not forgetting that anyone who has share options in a small or big company, they also benefit from the current arrangement.
Corporation tax is largely just passed onto the consumer to the extent that it doesn’t meaningfully affect competitive pricing. It’s not an efficient tax regime.
Companies like Amazon pay little tax because their actual taxable value is low. This is exactly how the system is supposed to work by making it preferable to invest in wages, inventory and research rather than hoarding cash.
This is basically acknowledging all the criticisms I've made against the as-yet unreleased manifesto.
It's going to be very thin. With a lot of gaps. Then within the first six months. "Well acksherlly we never said we _wouldn't_ do X, just that we had no plans to, but we had plans to have plans and we've excecuted those plans and now we do have plans to do X. So we weren't lying."
They're going to have a big enough majority they can get away with that. But they've got a big enough lead they could just be honest with us now. It might mean a 150 majority rather than a 250 majority, but surely 150 plus honesty is better than 250 due to _definitely not lying (wink wink)_
Why are people on Reddit against raising CGT? Why should income (which you’ve actually worked for) be taxed at a higher rate than gains (which you haven’t worked for)? Do you guys all have large share portfolios sitting at massive profits outside of ISAs that you’re worried about?
It’s like the people who complain about inheritance tax when most people with assets of less than £1m will never pay it.
Odd.
Snapshot of _Rachel Reeves under pressure from shadow ministers to raise capital gains tax to revive public services_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/business/article/2024/jun/06/rachel-reeves-under-pressure-from-shadow-ministers-to-raise-capital-gains-tax-to-revive-public-services) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/business/article/2024/jun/06/rachel-reeves-under-pressure-from-shadow-ministers-to-raise-capital-gains-tax-to-revive-public-services) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
>One source said: “Rachel has between 10 and 12 measures she is looking at which she hasn’t yet announced, all of which will raise small pots of money, with the ambition they should add up to something all together.” That's a lot of ~~tax increases~~ measures. How long before we get manifestoes?
13th June
If the manifesto provides any clarity on this I will be very surprised. It will repeat the "no increase to Income Tax" line, but not list a single tax that will be increased.
The Treasuries own analysis has modelled the impact of raising capital gains and increasing it reduced revenue. https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-january-2023#capital-gains-tax People have got to realise that the Laffer curve is a real thing and if you increase taxes where capital is at risk, people will either not invest, they won't realise any gains or they will move money abroad to countries that don't tax as much.
No it doesn't. It shows that it will lose money in the first year and gain money every other year. The last line shows losing money but again this is only a 3 year forecast. People need to sell assets eventually at which point there will be a boon. OP blocked me but you can see this in their link as well as here: https://i.gyazo.com/7a3d0cf851bc6b715a99845558070b57.png One can see that all the potential changes to cap gains rates raise money over a 3 year horizon except the bottom one.
No, it doesn't, all the figures have a -before then, meaning it loses the treasury money in every year they've projected. EDIT* I don't have 'Ewannnn' blocked, but they have blocked me, as I can no longer see their posts, meaning they've blocked me. As anyone can see from the linked Gov site, raising the higher rate of CGT by 10% (20% to 30%) does reduce Government revenue, so if the argument is to equalise CGT with income tax, that would be to 40% or 45%, which would lose even more revenue. The Treasury modelled 20% to 30%, not 20% to 40% or 45%.
If you tax land people will just sell up. Great. Cheaper prices!
Isn't this a circular argument? You can't raise tax because when you use the Laffer Curve it shows tax revenues go down, which proves the Laffer Curve is correct. In reality, there's very little empirical evidence that the Laffer Curvs exists in the way it's commonly deployed when arguing against tax rises.
This is a woeful oversimplification.
It's a phenomenon proven across the world.
Provide some evidence then that is authoritative.
I've provided the Treasuries own analysis. EDIT: Either phonetune or Ewann have blocked me, as when I try and reply, I get the generic "Something is broken, please try again later.", meaning one of them has me blocked in this chain. In response to 👇 it literally shows increasing CGT from 20% > 30%, reduces tax take by £170M in the first year, £1BN in the 2nd and £2BN in the 3rd.
But it doesn't support your conclusions. A lower tax take from CGT doesn't necessarily mean a lower overall tax take. P.S. the suggestion that people will "move money abroad" shows how little you understand about this!
Changing stamp duty to be the seller not the buyer would be one way of raising money, as it would be easier to raise rates especially on larger properties.
Haha. Good one. More likely they will double dip and tax both parties. Taxing the seller could also freeze the market especially if the opposition pledges to reverse the policy at the next election.
Stamp Duty only raises 0.3% of UK tax revenue, so you would have to increase it a **lot** to generate any significant income. Far better to abolish it altogether and then make it more easier for people to move home and take the increase in employment taxes if they can move to where the work is.
It is such a regressive tax. It adds unforeseen costs to moving (which is already expensive) and basically stops people from moving in and out of an area. I know it would increase prices in the short term but long term it will even out. I would roll a smaller form of it into council tax with discounts given for improvements of the house (maybe in regard to eco initiatives).
Council tax is a recurring tax that is way more regressive, let the guys buying houses take the hit rather than literally everyone in the country just trying to live/rent
What about adding a few more bands? The rates top out at around a house value of 320k in my area, and there are tons of properties worth several million.
Adding more bands isn't a bad idea. However do keep in mind that the band value is based on what the house would have been worth on 1 April 1991 and not what it is valued at today.
TIL. So I presume they work out the equivalent for houses for post 1991?
They do - although how accurate their calculations are is debatable.
Stamp duty is arguably the worst tax we have and the only reform should be removing it (whilst reforming council tax)
How about just make corporations pay the tax they should already be paying.
[удалено]
Gary Lineker is not a human being, but an entertainment brand, and he's had the courts approve that fact.
what nonsense. People pay income tax on their earnings even if they own the business.
[удалено]
> So they pay corporation tax on the money made through the job. After which they will either pay income tax if they draw it as a salary, or dividend tax if they receive dividends. None of which is tax dodging....
[удалено]
I suppose the one thing this doesn’t take into account is that the self employed don’t have their pension/benefits/holiday counted for like the PAYE employee which in some cases will make up the difference. Not totally but I’m happy to be PAYE and have all the benefits that takes care of.
its not morally wrong, because you don't understand the working model. Just because you're a single man consultancy doesn't mean you're a perm employee. Small business pay an incredible ampunt of tax, and you're thinking that corporation tax, VAT, income tax, NI, and tax on dividends don't count because its not PAYE? you don't know what you're talking about. As a one man consultancy, I pay more in tax than I ever did via PAYE as a permie.
[удалено]
only if you're being paid in cash. That involves two parties.
[удалено]
20 billion doesn’t come close to what mega corps are avoiding. Also that money ends up in the economy anyway, Big John down the road isn’t offshoring his money out of the country, he’s spending it.
It isn’t morally wrong, you might dislike it, but there’s nothing wrong with legally lowering your tax burden.
Literally by definition it's not tax avoidance. Following the letter and spirit of the law is by definition not tax avoidance. > Joe Smith (Random name for limited company/sole trader) gets to pay the lower corporation tax on most of the money he makes and easily cook his books saying "oh well I only made income of £11K really." You're comparing apples and oranges here. You're suggesting that both John and Joe are otherwise completely identical which is not the case here if one of them if self-employed. If Joe is a tradesman, how would they be an employee of their customers? If Joe is a contractor, same again? If you're referring to the few examples of someone being a contractor but otherwise in every other sense a FTE, then that was sorted (albeitly in a really cack-handed way) with IR35. The vast majority is from the part you rightly point out about paid in cash or partially logged i.e. tax evasion.
And most people in this country work for small businesses which are able to exist because of the tax regime which rewards the business owners. Not forgetting that anyone who has share options in a small or big company, they also benefit from the current arrangement.
And how is that tax-dodging?
It’s not. I agree.
Good luck with that. The problem is without some global effort to tackle it, cooperations will move/continue to avoid it.
You really think that any corporate tax increase will not be passed on to consumers through higher prices?
Because they have already paid tax upfront in return for long term savings, which is what the government sold to them.
Corporation tax is largely just passed onto the consumer to the extent that it doesn’t meaningfully affect competitive pricing. It’s not an efficient tax regime. Companies like Amazon pay little tax because their actual taxable value is low. This is exactly how the system is supposed to work by making it preferable to invest in wages, inventory and research rather than hoarding cash.
This is basically acknowledging all the criticisms I've made against the as-yet unreleased manifesto. It's going to be very thin. With a lot of gaps. Then within the first six months. "Well acksherlly we never said we _wouldn't_ do X, just that we had no plans to, but we had plans to have plans and we've excecuted those plans and now we do have plans to do X. So we weren't lying." They're going to have a big enough majority they can get away with that. But they've got a big enough lead they could just be honest with us now. It might mean a 150 majority rather than a 250 majority, but surely 150 plus honesty is better than 250 due to _definitely not lying (wink wink)_
Why are people on Reddit against raising CGT? Why should income (which you’ve actually worked for) be taxed at a higher rate than gains (which you haven’t worked for)? Do you guys all have large share portfolios sitting at massive profits outside of ISAs that you’re worried about? It’s like the people who complain about inheritance tax when most people with assets of less than £1m will never pay it. Odd.