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Taxing wealth would make our tax system fit for the modern world – Jon Trickett MP

Huge amounts of wealth has been concentrated in the hands of a small elite. At the same time workers living standards have stagnated and our post-war social security system has been dismantled.

Jon Trickett MP

Last month I published a report that proposed a radical overhaul of our tax system. In our country we currently tax income rather than wealth. In the modern world this simply doesn’t work. 

In an article for Labour Outlook I explained why tax reform is so necessary. Since the 1980s, the gap between the richest and the poorest has widened considerably. Huge amounts of wealth has been concentrated in the hands of a small elite. At the same time workers living standards have stagnated and our post-war social security system has been dismantled. I have argued it is time for a reset. 

In the report I proposed four different options for a Wealth Tax. Taxing wealth seems to me the most efficient and immediate way of making our tax system fit for the modern world. There are untapped riches lying in the bank accounts of the super-rich that could be put to good use in addressing our era defining challenges such as climate change and an aging population. 

I also proposed bringing Dividends and Capital Gains Tax rates in line with income tax, as well as measures to close the loopholes currently used to avoid or evade tax. When taken together, these proposals form a coherent and joined up package of reform that would create a fairer system in which those who benefit the most from our economic system start to pay their fair share. 

I intended the report to be my contribution to the debate that is taking place across our movement about wealth taxes. I have always believed that Labour Party policies should be debated openly across our movement and decided collectively through our democratic processes. Policy should not be made in the backrooms of Westminster. 

On Thursday I will be hosting an event to discuss the changes we need to make to our tax system. I am delighted to be joined by some of the leading economic thinkers in our country.

Professor Prem Sikka is a Professor of Accounting at the University of Sheffield and a rare socialist voice in the House of Lords. He has written extensively about the role accountancy firms have played in enabling corporations to avoid tax and what we can do to stop it. 

Professor Ozlem Onaran is the Professor of Economics at the University of Greenwich. She has undertaken extensive research about income distribution and has been developing proposals for how a wealth tax could be implemented. 

Joe Guinan is the Vice-President of the Democracy Collaborative research laboratory who are developing practical ideas for how we can build a democratic economy. He is a pioneer of community wealth building, which is being pursued by a growing number of Labour councils across the country, from Preston in Lancashire to North Ayrshire in the West of Scotland.

I would like to invite all Labour Outlook readers to join the discussion on Thursday. It is clear that our movement is brimming with ideas. What we need is a strategy to put those ideas into action. I hope that in the coming weeks and months, with your support, we will take our campaign for a wealth tax to the next level. 

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