The PM will keep plucking the goose until there are no feathers left
Daily Telegraph 27/08/26
With ever-growing tedium, the forthcoming Budget once again seeks to extract more tax from the public. As Jean-Baptiste Colbert famously said: “The art of taxation consists in so plucking the goose as to obtain the largest possible number of feathers with the smallest possible amount of hissing.”
Andy Burnham, it would seem, is deaf to the hissing. He appears determined to keep plucking, no matter the pain.
But more tax is not just a threat to Britain’s attractiveness for wealth creators and entrepreneurs – it’s a direct attack on those who keep the economy alive.
Nor should one be surprised that, when asked which taxes should go up, people always plump for the one they are unlikely to have to pay themselves.
So, which taxes are being spoken about the most?
The first is a wealth tax, which will be impossible to collect and will cost more to administer. Outside quoted investments such as equities, valuations are subjective.
How many homeowners, previously clinging to unrealistic high valuations, will now willingly accept the notion that their house is worth what they paid for it 15 or 20 years ago?
Perhaps they will now go to extraordinary lengths to devalue their property, or maybe drink their wine cellars dry, or, better still, divide their estate between their children and grandchildren.
No doubt Burnham is ready for this and will reintroduce capital transfer tax (CTT) to prevent people from doing what they want with the assets they purchased from after-tax income.
If the intention was only to affect those with, say, more than £10m in assets, Britain has already made itself considerably less attractive to internationally mobile wealthy people following the abolition of the non-dom regime and the extension of inheritance tax (IHT) on overseas assets for long-term residents.
There are now far fewer of those very people they wanted to tax. If that doesn’t give them pause, I’m not sure what will.
Next on Burnham’s hit list will be capital gains tax.
How dare anyone invest savings accumulated from income – on which tax has already been paid – and do well out of it. Or build a successful company, create jobs and generate prosperity for others.
But why would anyone bother if one’s reward is a hefty thank you from the Government in the form of higher capital gains tax? It may not go up as much as income tax, but under Burnham, it’s almost certainly going to rise.
Those who have never taken the risk of creating a company and all that it involves, alongside the significantly larger corporation taxes and National Insurance taxes that now need to be met, might think this isn’t too bad.
Still, it’s quite a different story for someone who is selling. And once they have sold, the net proceeds will be subject to a further 40pc IHT and a possible 10pc social care tax, yet another of Burnham’s new punishments for success.
It hardly seems worth the bother even to contemplate creating a private company in Burnham’s Britain. After all, where are the incentives?
Lower taxation and simpler taxes, sensible regulation and a state that encourages enterprise rather than consistently interfering with it would increase investment, entrepreneurship and economic growth. But Burnham’s Budget, with its looming tax grabs, will send the opposite message: Britain is closed for business.
There is an instructive example of over-taxation in entrepreneurs’ relief, now boringly named business asset disposal relief.
In 2020, the Conservatives reduced entrepreneurs’ relief from £10m to £1m, arguing that reducing the relief would bring in more tax. Labour extended the pain by nearly doubling the capital gains tax rate on a sale from 10pc to 18pc on the first £1m. It also increased the next band from 20pc to 24pc.
Now Burnham wants to go even further: if capital gains tax is raised to 28pc, Labour will have added 40pc to the tax bill. Is it any wonder entrepreneurs are fleeing? The number claiming such relief has already fallen by 25pc between 2018-19 and 2023-24, according to HMRC.
This undoubtedly will affect how business owners and families behave. Even HMRC acknowledged this and indeed anticipated it when the most recent changes to capital gains tax were made. People will put off selling until a later date or move abroad altogether, something HMRC probably feels won’t happen.
Yet it will – and has.
But this time, it’s not just a question of a few extra feathers. Burnham’s Budget will pile on even more taxes, plucking families, entrepreneurs and wealth creators until there’s nothing left but bare skin. Britain simply cannot take any more.
There comes a point when the goose has nothing left to give. If Burnham insists on another round of tax rises, the economy won’t just hiss – it will revolt.
Comments
Post a Comment