Rachel Reeves finds a tax public wants – it could blow up in her face | Personal Finance | Finance
Chancellor Rachel Reeves may now have found one and can increase a few billion in the autumn budget. This is a possible thing, in fact a tax hike that is popular among voters.
Of course, there is an important reason why voters are in favor. Because they will not be paid, contrary to other taxes, the worker is lining up on November 26th. People are relieved about they are relieved in a strange enough way.
And there is another reason why it is popular. In general, it will be paid by a sector that hates the public. Many would see higher taxes as punishment for past misdemeanors. So this can really be rare: a win-win for Rachel Reeves.
In addition, it can rise up to £ 8 billion. This will now go a long way to install the budget, which is estimated to be £ 30 billion.
Best of all, the tax would target the big, bad UK banks. And serve them right, many will call them.
Taxpayers, bankers who had a bonus for the 2008 financial crisis, did not forgive them when they had to roar them tens of billions to save them from collapse.
Melting left traces of permanent scars. While the British economy has been struggling to grow since then, real wages became stagnant.
So people see Barclays, HSBC, Lloyds and Natwest in a way that they hear more than £ more than 50 billion profits this year.
Today, banks pay 3% above the 25% company tax paid by all major companies. The Association of Transactions wants Reeves to raise it to 8%and collect £ 2 billion per year.
The left wing of the Institute of Public Policy Research (IPPR) went further and proposed a new fall tax that would rise up to £ 8 billion. Reeves would complain very little if he went down to this route. But he should think very carefully.
Beating the banks is good box office, but it may not be good for work.
Reeves is not just called to hit banks. In addition, it is difficult to target the gambling industry, another sector does not like labor.
Fair enough, but this is a high -betting movement. Entin, which has Ladbrokes and Mercan, warns that higher taxes will force him to close the shops and change overseas investments. It can also direct British bookmakers to irregular land market sites that do not produce any taxes.
Similarly, Reeves ignores the satisfaction of retailers to restore tax -free shopping for foreign visitors who once flocked to London to swing to luxury goods. As tourists moved to another place, this Perk cost billions. As the rich residents escape abroad, the domestic pressure may also be disappointed.
The constant harmony of the Labor Party, the risk of financial morality, the risk of harming more than benefit.
I am not a friend of the banks (waiver: I get some shares in the Lloyds Banking Group), but beating them again can recoil. They will transfer the cost to customers by reducing savings, lending credit costs to march and lend less to small companies. This can mean slower growth, less work and lower tax receipts.
British financing says that banks pay £ 40 billion per year. Perhaps given that we all share, we should see the rising profits as a rare success story.
Reeves may still be attractive to progress. Politically, it is safer to raid our pensions or to break a manifesto hostage and to break walking income tax. However, we saw the tax raids about the work backfire. Last year, while the employer’s national insurance sank the walking companies and business, wind taxes encouraged the North Sea oil and gas investment.
If the worker taxes the banks, it won’t end here. Soon the tucle and a left -winged thought tanks will demand another tax, because they do what they do.
Reeves needs to print carefully. Britain does not need a Crusader campaign against profits. Instead, we need more fairly taxed. Ordinary taxpayers may applaud a bank raid today, but as a result, if the economy stops growth, they will make payment.
