Anyone earning over £50,500 would be considered fair game for a ‘wealth tax’, the Deputy Prime Minister Nick Clegg has said, which would probably take the form of reduced tax relief on pensions or changes to capital gains tax and stamp duty. And he reckoned his Conservative coalition partners would agree to the idea.
The Liberal Democrat leader told delegates at the party conference in Brighton that there was even growing support among Tories for the so-called mansion tax on homes that were worth several million pounds. This is something the Business Secretary Vince Cable has often spoken about but is seen by some as a tax on being a Tory. Also, houses valued at over £1m in today’s market are not usually ‘mansions’.
However, Clegg’s wealth tax call is said to be an attempt to justify he and Cable sanctioning further cuts to the welfare budget.
“We cannot of course make the welfare budget immune to further savings but we have got to ask people who are far better off to make a contribution,” the Lib Dem leader told the BBC. “Decent, fair minded folk who are earning far more than the national average understand that they do need to make a contribution because that’s what the nation demands right now.”
He added: “I will not accept a new wave of fiscal retrenchment without asking people at the top to make their contribution. I don’t think you can ask people on middle and low incomes to bear the brunt of this adjustment. The vast majority of people would think a salary of £60,000, £70,000, £80,000 is a considerable amount of money.”
On Tory support for the ‘mansion tax’, he said: “There are an increasing number of Conservatives who understand the value of having fairer tax on high value properties. I think there is a very good chance that we can make the top pay more tax.”
The Chancellor George Osborne – heavily criticised for scrapping the 50p top tax rate – is expected to ask for another £10bn of savings in the next Comprehensive Spending Review.
I earn over £50k, I am also a single parent. I am already being hit by the loss of child benefit whilst a ‘family’ unit with two adults earning more than me will have no loss. So will it be the same for this new tax? I have worked hard to get where I am today and the thought of losing more of my hard-earned cash is not attractive. Another example of Clegg opening his mouth without really thinking very hard.
I earn over 50k and my husband currently significantly less due to being made redundant last year. With Childcare for 2 kids to pay for the only way we can currently survive is because we were very prudent in the past and paid off most of our mortgage before having kids. We are certainly not rich.
It seems that if you were suddenly catapulted to earning £50k plus a year then your existing outgoings may allow for sufficient disposable income to sustain additional tax burden.
However, if you have been gradually increasing income over many years it is unlikely that income will not already be accounted for with mortgage and other payments. It seems short sighted to assume that many people on whatever income level do not have existing commitments which absorb that income.
Likewise, I imagine, there would be people who may now have a property worth 1 or 2 million pounds but do not have the income to enter the market now at that level if they have inherited it, purchased it earlier in a career or just live in an area of high house price inflation since their purchase and now earn sufficient for upkeep but not necessarily for an extra tax demand.
Otherwise the same logic would dictate that if you own anything of high value you could be expected to pay an ‘out of the blue’ tax on it. Better hide any pictures you have where the value has risen, or the odd antique that is suddenly in demand.
Just because a person owns an item of high value does not mean that they have surplus cash to pay for the right to continue ownership.
I thought it was justice that was meant to be blind not the politicians!
I have worked for 28 years to reach a salary of approaching 50k, I am a single parent with a young adult at University supporting his accomodation so that he can have some cahnce of success in the future. I do not think 50k is a huge salary when you take into consideration general living costs and mainting a reasonable (not excessive) lifestyle. I am absolutely fed up with been at the brunt end of paying for others, when I consistently see indivduals taking advantage of our benefit systems. Some people who have never worked or have no intention of working. The system needs to change and working hard all your life paying into the system and not taking advantage should not be rewarded not penalised as current and past governments seem to do. This sort of comment by Nick Clegg only achieves one thing and that is to aggravate the hardworking people of this country.
I do not understand why those of us that have worked and studied to improve our lot should have to finance those who have chosen not to do the same.
I am a single parent and never had financial support from their estranged father who left when I was pregnant with our third child.
I had no choice but to work – returning to work after just 6 weeks maternity leave – as that was our only income. A year later I started studying in the evenings, took holiday to cover courses and, after five and a half years, qualified into a profession. Last year – 15 years after starting on this track – I hit the £50,000.00 salary mark.
I do not own my own home, support three children who are all in the academic system and yet it is now being suggested that I should give away some of this income to help ‘those less fortunate’.
I’m afraid I don’t think this is at all fair. I would prefer to be able to reap the benefit of my hard work and save to own my own home instead of assisting those who are not prepared to put in the 18-hour + days I have done to alter my fortunes.
At the current time, someone earning £50k will pay £18000 in tax and NI and their employer will pay another £4K on top in NI. So the government already takes £22k in direct taxes from them.
With council tax,road tax and Fuel duty (most people have cars), not to mention VAT on expenditure (people on £50k will normally spend most of their disposable income), I would say they are patying enough tax already. (This without tax on savings and investments.)
And every penny of tax taken is less that can be spent on GROWTH of the economy through increased business.
In my view, no more taxes until we are sure there is no more slack in public expenditure. And having worked in and with the public sector for many years I know we are not there yet.