Are wealth taxes back in fashion?
OK, excellent, let\’s talk about taxing wealth.
What wealth taxes are being proposed?
One of Labour’s last acts was the introduction of the 50p tax on high earners. Despite the hopes of the Tory Right, the Coalition hasn’t abolished it.
Income tax, at whatever rate, is by definition not a wealth tax, it is an income tax.
Wealth is a stock, income a flow.
A wealth tax would be taxing the stock of wealth that someone owns. \”You\’ve got £2 million in assets we\’ll have 3% of that each year, thank you very much\”.
An income tax is \”You\’ve got £200,000 a year from labour and returns to your wealth and we\’ll have 50% of that thank you very much\”.
Getting confused between these two concepts means that you shouldn\’t be writing columns about these concepts.