Wes Streeting has called for a wealth tax, arguing that the current system is unfair and penalises those in work. The former Health Secretary proposed equalising capital gains tax with income tax, a move he claims could raise £12 billion annually.
Proposed Changes to Capital Gains Tax
Currently, higher or additional rate taxpayers pay 24% on capital gains. Under Streeting’s plan, this would rise to 40% for higher rate taxpayers and 45% for additional rate taxpayers, matching income tax rates. The package would also close loopholes used to disguise income as capital gains, such as personal service companies or share-based pay.
Streeting's Justification
Explaining his call, Streeting said: “A member of my family is a cleaner in Lancashire. She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in. She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry.”
He added: “The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work.”
Labour's Resistance
Labour has repeatedly resisted calls to raise levies on the super-wealthy to boost Treasury coffers. Chancellor Rachel Reeves previously claimed the government had “got the balance right in terms how we tax those with the broadest shoulders.”
Last year, Dale Vince, one of Britain’s biggest taxpayers, proposed a 2% tax on assets over £10 million, which would generate £24 billion a year and affect only 20,000 people. The IFS, Resolution Foundation, Tax Policy Associates’ Dan Neidle, and the Labour Growth Group have also pushed for taxing gains at the same rate as income, but only above a fair return on the original investment.
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