Common commentator JenW posted this remark on the weblog yesterday:

I despatched an e mail to my MP concerning a wealth tax. His response, by letter, got here in the present day.

“Whereas the UK doesn’t have a wealth tax, we have already got quite a few measures in place that instantly tackle your specific grievances throughout each asset and wealth taxes.

These taxes function throughout many various financial actions, together with the acquisition, holding, switch and disposal of property, and revenue derived from property. The UK’s taxes on wealth are broadly equal to these of different G7 nations.

The UK’s progressive revenue tax system means the highest 1% of revenue tax payers are projected to have paid over 29% of all revenue tax, and the highest 5 % are projected to have paid over 50%, in 2019-20.

Thanks once more for taking the time to contact me, please don’t hesitate to take action once more.”

That was it.

How ought to I reply?

query. As I famous somebody asking on Politics Reside yesterday, “If Labour just isn’t about shifting the burden of tax from working folks and onto capital, what’s it about?” I believe {that a} variation on the theme.

I believe my first response could be to have a look at knowledge I produced in 2020, which stays as related now as then. I produced this chart then. What it did was examine complete revenue with taxes paid, the place complete revenue was made up of each wages and the rise in wealth in a interval:

Those that pay the very best total charges of tax are these on lowest incomes. That’s due to the massively regressive UK oblique tax system. To assert that the system is progressive just isn’t true: the highest 10% really pay much less total than the decile under them. And when will increase in wealth are accounted for, based mostly on ONS knowledge the tax fee is sort of persistently and profoundly regressive. Nothing within the UK tax system counters this. That’s the reason we’d like a wealth tax or a spread of higher taxes on wealth.

The argument in regards to the rich paying extra revenue tax can be misplaced. Firstly, their capability to pay is a lot larger than everybody else’s:

In fact they pay extra tax than everybody else:  the highest 10% earn greater than the underside 55% (or thereabouts) mixed. Their capability to pay is enormously better consequently.

This differential has additionally risen over time. This knowledge is from the Home of Commons Library and is sadly by quintile and never decile and so suppresses top-end development:

It’s nonetheless obvious that the bottom earners are getting worse off, the center earners are stagnating, and one of the best off are gaining. And that’s earlier than will increase in wealth – accruing virtually totally to high earners – is taken under consideration (see above).

So the reply the MP supplied is grossly deceptive and performs inappropriately with the information in methods that don’t give a real and honest view.

I’d reply making these factors.