Ed Balls: Labour would impose permanent wealth tax on rich
I know he\’s talking about a mansion tax (better dealt with by LVT or at least more council tax bands) but a wealth tax.
Let\’s take the mythical rentier. They\’ve got £10 million in moolah. Decent house, holiday home. £8 million in actual cash. Retired, or they\’re living off their capital income.
So what is income from capital these days? Say they\’re in gilts. They get, what 1% these days?
So, income £80k. They\’ll pay £30 odd tax on that? Net income £50k.
Now we want to tax them on their wealth. 1% say. That\’s £80k a year in tax then. More than their income.
So, err, who is going to stick around to be taxed at over 100% on their income?
Yes, I know that it\’s nominally the wealth being taxed. But taxes have to be paid out of liquid cash, don\’t they?