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Categorie archief: The Guardian
Following a steep rise in inheritance tax, Britain’s wealthiest families suddenly professed to be a lot poorer
Income inequality rose significantly in the last decades of the 20th century, yet wealth inequality fell throughout most of the century. Why? Partly because of the home ownership boom. But the top 1%’s share of wealth fell from 60% before 1920 to under 20% by the 1980s.
In part, this shows that both war and inheritance tax are bad for the landed gentry. But are we missing something? Or, more specifically, are the rich hiding something? That’s the excellent question asked by new research into the wealth of our Victorian elite.
We can’t afford to just give it to them, but they could jointly own it as an investment
Q My husband and I own a flat in London. Our children have recently inherited some money which they wish to invest in something. Between them all they could afford to buy our flat off us if we sold it to them for the price we bought it for five years ago. This would mean we would be selling it to them for about 25% lower than its market value. Can we do this? We cannot afford to just give it to them. What are the pitfalls for them in owning it jointly as siblings? We have tenants in the flat so they would get a modest income from it. PB
A Provided all your children are over 18, yes, you can sell your flat to them. If they’re not, no, you can’t because a child under 18 can’t own land or property in the UK. But assuming it is a possibility, whether you should go ahead with selling your flat to them at a discount price is quite another matter.
The Labour party is committed to raising billions by raising tax for earning over £80,000
Labour has pledged that people earnings over £80,000 will have to pay more income tax, raising £5.4bn to spend on other priorities such as the NHS. But independent tax experts warn that the well-off already pay a very large proportion of total income tax, with the top 1% of earners now accounting for more than a third of all income tax paid. Almost half the population don’t pay any income tax at all.
So who’s right? Are Britain’s high earners taxed too much, or too little? I carried out an exercise this week to compare how much the same well-paid workers in the US, Germany, the Netherlands and Ireland pay in tax in comparison with England and Wales (Scotland has slightly different tax rates). I decided to ignore France, because I’ve tried and failed in the past to make any sense of its profoundly complex personal tax system.
Economics dominates public debate while being seen as an abstract authority over which people have little control. That must change
On BBC Question Time on Thursday there was an exchange between an audience member and a Labour politician – Richard Burgon – that revealed how poor economic literacy deepens the democratic deficit. The audience member, a man who said he earned more than £80,000, rounded on Mr Burgon and called him a liar for claiming that Labour’s manifesto pledge of raising income taxes for those with salaries like his and larger would only affect the top 5% of the population.
Yet Mr Burgon did not lie and the Labour party is right: 95% of workers earn less than £81,000. The man was undeterred, with a heartfelt plea that he was “not even in the top 50%” of earners. In fact, anyone with an annual salary of more than £25,500 would be in the top half of UK wage earners. Plenty of heads nodded along with the questioner’s falsehoods, underlining perhaps the post-truth nature of our times that many consider it better to be sincere than to be correct. The back-and-forth also exposed how mainstream economic stories have been successful in convincing people that there is no alternative to help the country.
Only top 5% of earners would pay more tax under party, shadow chancellor says
John McDonnell has rejected suggestions that Labour’s economic policy would increase prices and lower wages, arguing that structural changes would challenge “extreme inequality” and unstable investment.
Speaking after Labour’s manifesto was unveiled on Thursday, the shadow chancellor said people would have much more control over their lives and the economy as a result of the party’s plans to restore trade union rights and collective bargaining.
Prime minister’s pledge in the TV debate was vague, premature and at odds with Tory financial rules
The strain of remaining on message for a whole hour in his head-to-head debate with Jeremy Corbyn seems to have been too much for Boris Johnson. It really wasn’t part of the plan for the prime minister to reveal ahead of time a rabbit due to be pulled out of the hat at the Conservative party manifesto launch – an increase to £12,000 in the threshold at which national insurance contributions have to paid.
Although premature, the announcement dovetails with other Tory proposals – higher public spending, an increase in the national minimum wage to £10.50 and the decision not to go ahead with cuts in corporation tax. All are intended to win support among voters in the marginals in the Midlands and the north of England and to defuse the argument that Johnson is only interested in delivering for the rich. At the 2017 general election, the Tories had no offer to counter Corbyn’s anti-austerity programme; this time they do.
How much would raising the NI threshold to £12,000 help lower-income workers?
Boris Johnson said the Conservatives would cut taxes for “working people” by raising the threshold for national insurance contributions to £12,000.
PM’s apparent blunder over £12,500 threshold could benefit him amid ‘factchecking’ row
Boris Johnson has said he wants to raise the national insurance threshold to £12,500, letting slip a major Tory tax cut from the manifesto as he was speaking to workers in Teesside.
The prime minister blurted out the key announcement as he was pressed by an employee at a fabrication yard about whether he would help “people like us”, not just the rich.
During the ITV live leaders debate on 19 November, the Conservative party re-branded their press office account on Twitter as ‘factcheckUK’, to tweet anti-Corbyn points during the programme to its 75,000 followers.
Tax revenues ever more reliant on small group of high earners, says Institute for Fiscal Studies
The top 1% of earners in the UK now account for more than a third of income tax paid to the government, following changes over the past decade that have left almost half the population exempt from making payments.
In research underlining the dual nature of Britain’s income tax structure, the Institute for Fiscal Studies said above-inflation increases in the personal allowance to £12,500 a year meant 42% of adults paid no income tax.
A man is battling an HMRC charge for a claim made by his ex-partner over which he had no control
You break up with your partner and move out, and at around the same time you get a bombshell tax demand for £6,000 for overpaid child benefit that she had been claiming. Most of the bill relates to money that your ex received for two children who are not even biologically yours. Yet the tax authorities aren’t pursuing her for the money, or the kids’ natural father – they have come after you.
That’s the situation for one Midlands man in a case that throws a spotlight on rules that one top accountancy body has called a potential “reputational disaster” for HM Revenue & Customs.
Austerity appears to melt away as Tories and Labour proffer the Midas touch with unfrozen coffers
Let a hundred horse radishes bloom. As Jeremy Corbyn almost wrote to Tom Watson. The good times are here again. Austerity? What austerity? The absence of pain would almost make the agony worthwhile. Almost.
Somewhat later than billed due to cancelled trains in the north-west – whenever the government finds out who has been in charge of infrastructure spending there’s going to be hell to pay – Sajid Javid laid out his plans for the economy at a speech in an aviation park just outside Manchester.
Sir Edward Troup calls for UK election victors to abolish entrepreneurs’ break which cuts capital gains tax to 10%
The former head of HM Revenue and Customs has called on the government to scrap a controversial tax break designed to help entrepreneurs, which he said was costing the country £2bn a year in lost tax yet provided “no incentive for real entrepreneurship”.
Sir Edward Troup, who was executive chair of HMRC from 2016 until January 2018, said whichever party won the general election on 12 December should abolish the “entrepreneurs’ relief” applied to capital gains tax (CGT).
Good to see you pointing out this obvious truth. The increase in cap from £1m to £10m is the single biggest giveaway I’ve seen in my career.
Fabian Society sets out five-year plan to end in-work poverty
The Fabian Society, which is affiliated to the Labour party, said a range of working-age and child benefits should be raised by £5 a week as an emergency measure in the first year of the next government.
I plan to have two lodgers while still living in the property – my only house
Q Please can you clarify for me whether I am likely to be required to pay capital gains tax on my rental income when I decide to sell my house? I plan to have two lodgers while still living in the property. It is my only house.
Is there any relief that would apply to me now or in the future that I should look out for?
Devolution is meaningless without spending power. Rolling back centralisation would be a big step in tackling inequality
Tax is a fundamental issue for any nation. It’s how we fund investment in public services and infrastructure and redistribute wealth. Throughout history the question of who makes decisions about tax has been synonymous with where power lies. And there’s no better example of Westminster’s power over us than local government’s measly ability to raise taxes.