Recent changes in taxation of the Rich

Income tax. Shortly after Mrs Thatcher came to power and for the majority of her term in office the top rate of tax on the super rich was 60%. This was reduced to 40% in the famous 1988 Lawson budget. When Blair came to office the top rate was still 40%.  

The super rich are subject to three other main taxes:

These are corporation tax, a tax on company profits

capital gains tax is a tax on trading property and shares

Inheritance Tax paid when a person dies.

If you have many millions you will mainly pay capital gains tax on buying and selling property and shares. The rate of corporation tax will also affect your returns because you will receive dividends from company profits.

But after the business friendly Blair/Brown governments corporation tax had been significantly reduced and capital gains tax had been reduced to an amazing 18%. This is of course less than someone working for measly £6 an hour would pay. Part of the reason for the massive financial black hole which developed during the last Labour government was this massive cut in the taxation of the super rich.

The Condem government's shift of taxation onto ordinary working people is illustrated by the rise in VAT to 20% and the cuts in corporation tax. In several western countries the rate of corporation tax is between 40-50% whereas the government proposes to go to a rate of 24%. The one small token in difference to this was the rise in capital gains tax under pressure from the Liberal Democrats. It was increased last year to 28% for higher rate taxpayers from Labour's 18%.

Be the first to comment

Leave a Reply