The Government should urgently bring forward reforms to fix our broken tax system, bringing in higher taxes on wealth, so that those who earn the most, and own the most, pay their proper share.
The unfair and regressive nature of the UK’s tax system is contributing to the cost of living crisis by driving inequalities in income and wealth. Fixing it must be part of the solution.
The current tax system disproportionately taxes income from work whilst people who are already wealthy from investments, rent and inheritances are taxed relatively lightly. Not only does this entrench inequality, but it is bad for the economy too. A tax system which disincentivises work relative to other forms of income damages productivity.
Redressing imbalances in the tax system by taxing wealth fairly is long overdue and would raise substantial government revenue that could be used to fund cost of living support measures and accelerate the climate transition now and in the future. This agenda has support across the political spectrum, and from major global financial institutions such as the IMF, and the time for action has come.
There are a range of reforms that could be undertaken, from simple measures such as equalising taxation of income from wealth with income from work, through to an annual wealth tax aimed at reducing inequality in the long term.