Isn’t Arun Advani a nasty little ….

The analysis was carried out for the Guardian by Arun Advani, the assistant professor of economics at the University of Warwick’s CAGE Research Centre and a research fellow specialising in tax at the Institute for Fiscal Studies.

He’s the bloke at that wealth commission who advocated retrospective taxation.

Using the latest data on capital gains, as recorded by HMRC, Advani estimates that if gains were taxed at the same rates as salaries, an extra £13.8bn could have been collected the in 2016-17, rising to £15.9bn in 2019-20.

The idea of alignment is not new. The former Conservative chancellor Nigel Lawson introduced parity between capital gains and income taxes in 1988, but this was unpicked a decade later by his Labour successor, Gordon Brown.

“The chancellor doesn’t just decide how much money to raise, he also has to choose how to do it fairly. So far he has raised taxes on those who work to earn a living, in order to protect those who live off income from wealth,” Advani said.

Well, yes, the Lawson rate included an inflation adjustment. The Brown one didn’t. Thus the difference, at least in part, in the rates. And yes, this does make a difference. In that decade following 2007 inflation was about 30%. As CGT operates over time taxing at income levels would be a tax on phantom gains, wouldn’t it?

9 thoughts on “Isn’t Arun Advani a nasty little ….”

  1. Sounds like socialist paradise.
    Invent a tax on phantom gains caused by inflation, then print so much money inflation goes through the roof. Truly a Browngasm.

    What a good thing we don’t have a socialist gover….oh dear.

  2. Talking of inflation, “the assistant professor of” used to be called ‘assistant lecturer in’, did it not?

  3. You should be taxed on your losses too, but at a higher rate than profit.. This will encourage you to not make a loss.

  4. We are fast approaching the Panthera Leo event horizon, where the only profitable lines of business are lions-as-a-service (a genius idea which merits stealing mercilessly), and flogging something-in-a-bun to the attending mob

  5. And taxing ‘gains’ – aka wealth creation – destroys capital, e.g plant and equipment.

    Tell me, how many capital intensive industries have we lost since 1945?

  6. @ MrVeryAngry
    Most of them.
    But CGT taxation was almost entirely irrelevant – other forms of government malice and interference are the cause. Attlee nationalised the commanding heights of the economy – none are now commanding heights (albeit the NHS is commanding drain).

  7. Talking of inflation, “the assistant professor of” used to be called ‘assistant lecturer in’, did it not?
    Yes, that inflation is one of my pet peeves particularly when prefixed by “adjunct”. And, of course, in the interest of equity, diversity, fairness or whatever, when the qualifier is dropped.

  8. Tom Price (yes this is my name)

    What an offensive heading to write.

    This would be the case even if Mr Advani had not addressed inflation – which he did by saying bring back Lawson’s inflation allowance for capital gains.

    Is Mr Worstall then nothing more than a bully who deliberately misleads those unfortunate enough to land on this website or someone too lazy to read what someone who he is trying to bully has actually written?

  9. Bully? Little bit of mild insult? Jeez, grow a pair. The bloke’s trying to determine the taxation system of the nation. He needs to expect a little bit of “robust debate”.

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