A think tank with close links to the Labour Party says landlords are under-taxed and should pay more income tax.
The Resolution Foundation says “working people” – a key Labour phrase – should benefit from a 2p cut in employee National Insurance. It there should be a 2p rise in Income Tax (IT) which would make it cost-neutral for employees but would hit landlords and pensioners, amongst others.
The foundation is hugely influential in the current government.
Its former director, Torsten Bell, is now a Treasury minister working on preparing the November Budget. Dan Tomlinson, the Exchequer Secretary to the Treasury, is another ex-foundation employee, as is Richard Hughes, now the head of the Office for Budget Responsibility.
The foundation’s current chief executive is Ruth Curtice who was previously director of fiscal policy at the Treasury where she worked for over 15 years.
On BBC Radio Curtice was asked who would pay more under her think tank’s proposal. She immediately answered “landlords” and continued by saying that a 2p income tax rise for landlords would be relatively small.
She added that there was no reason that landlords should pay less income tax than their working tenants.
Overall Curtice claims the foundation’s new idea would raise £6 billion.
She claims a combination of policy-U-turns since the last Budget, higher borrowing costs and a likely downgrade to the UK’s productivity outlook mean “significant fiscal consolidation” – jargon for tax rises – “will be needed for the Chancellor to meet her fiscal rules in her upcoming Budget.”
The foundation says this is likely to require tax rises of at least £20 billion a year by 2029-30.
It says: “In doing so, the Chancellor should set the UKs over £1 trillion a year tax system on an improving path and lay out a clear set of principles behind her strategy. A key priority should be protecting workers’ pay packets as much as possible, by reducing the current tax bias against employees.”
The foundation says that the previous Tory Chancellor Jeremy Hunt rightly identified an unfair double tax on work from employee NI and IT, and the current Chancellor should continue to tackle this unfairness by switching the UK’s tax base away from the former and onto the latter.
Such a switch would raise £6 billion from those who pay IT but not employee NI – including pensioners, landlords and the self-employed.
This article is taken from Landlord Today