The latest politician to push for a change of tone may raise a few eyebrows. It isn’t John McDonnell or Jeremy Corbyn, but David Willetts, the Conservative peer who was a universities minister under David Cameron. Lord Willetts will attempt to make the case for greater wealth taxes in a speech on Monday.
The reasons are clear. The public purse will be out of pocket by roughly £160bn by the mid-2060s as the number of people over 65 grows by almost a third, while the working age population is expected to only increase by about 2%. The government’s own forecaster, the Office for Budget Responsibility, reckons healthcare spending will need to almost double from 6.9% of GDP in the early 2020s to 12.6% by the mid-2060s because of demographic shift alone. [...]
|The divide between rich and poor is growing and it’s proving increasingly difficult to earn your way to riches. Wealth taxes are being considered as a result, with work also being done by the Institute for Public Policy and Research expected to be published next month. [...]
The trouble would be implementing the changes required. Polling shows wealth taxes are viewed as the most unfair way for the government to raise money, even though the accumulation of wealth is often passive – particularly for property owners. [...]
The French economist Thomas Pikketty has argued that without change, inheritance will eventually matter a lot more when determining a person’s life chances, as it did in ancient societies. Past wealth, he says, will tend to dominate new wealth – and successors will tend to dominate labour earners.
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