Ignorant fool

Sigh:

On Sunday Reeves said Labour could raise up to £440m a year by closing the carried interest loophole.

1) Close the loophole and you change the number of people getting paid that way. You’ll not raise that amount.

2) The “loophole” is that sweat equity gets taxed differently from labour income. OK, cool, how do you close the loophole without taxing, as labour income, all those shares in start ups?

Twat.

5 thoughts on “Ignorant fool”

  1. Typical politician inability to consider second order effects. X is happening, if we tax it at rate Y we get Z revenue. Without even considering if you raise taxes on X then you will probably get a lot less X occurring, if any.

    Apart from which it raises £400m at best, which is a drop in the ocean. Thats not even a rounding error in UK government spending. Its utterly irrelevant to the state of the UK budget. I bet HS2 has spent that much on PPE and stationary.

  2. “how do you close the loophole without taxing, as labour income, all those shares in start ups?”

    We already have tax relief on Venture Capital Trusts, and Entrepreneur’s Relief. Isn’t that sufficient?

  3. Answer 1: she’ll do it retrospectively (taxing at income tax rates capital gains received in past years).
    Answer 2: depends on how you define “£400m a year” – maybe she makes the phrase mean £400m in the first year and a trickle thereafter
    Answer 3: progressively increasing the tax rate on the shrinking portfolio of carried interest schemes until it exceeds 100% on receipts (as disctinct from profits).
    Take your pick

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