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THE TUC has condemned a “tale of two Britains” which sees working people suffering “the longest pay squeeze in modern history” while bankers’ bonuses are at eye-watering levels and chief executive pay is surging.
The damning criticism came as the TUC launched a blueprint to squeeze Britain’s multimillionaires for a “modest” proportion of their wealth and end the country’s “increasing wealth inequality.”
The blueprint would raise £10 billion for the public purse and should be the “start of a national conversation about taxing wealth,” said TUC general secretary Paul Nowak.
It would affect only 140,000 individuals — 0.3 per cent of Britain’s population — and is similar to a policy that operates in Spain.
Mr Nowak said: “It’s time to start a national conversation about how we tax wealth in this country.
“It is absurd that a nurse pays a bigger share of their income in tax than a city trader does on profits from their investment portfolio.
“That’s not only fundamentally unfair and unjust — it’s bad for our economy too.”
He said that Britain’s “broken” tax system means those at the top are hoarding wealth and getting richer and richer while working people struggle to get by.
“That is starving our economy of spending — as it’s working people who spend their money on our high streets – and it’s starving our public services of much-needed funds,” Mr Nowak said.
“This is a debate we should not be afraid of having. The Chancellor should use his autumn statement to make sure the wealthiest pay their fair share of tax.”
He said that as working people suffered a record squeeze on pay “the super-rich are coining it in.”
“Porsche sales are at record highs, bankers’ bonuses are at eyewatering levels, and CEO pay is surging,” he added.
“Enough is enough. We need an economy that rewards work — not just wealth.
“Fair tax must play a central role in rewiring our economy to work for working people.”
The analysis sets out options for taxing the small number of individuals with wealth of more than £3 million, £5m and £10m, excluding pensions.
The lower tax on people with more than £3m would affect 142,000 wealthy people, the tax on those with more than £5m would affect 48,000 and the tax on those with more than £10m would affect 17,000.
The system would mean that someone with £3m would pay nothing, someone with more than £5m would pay £17,000 and someone with £10 million would pay £118,000.
“Together this could raise more than £10 billion for the exchequer,” said the TUC.
The TUC has already called on the government to equalise capital gains tax with income tax, which could raise around £14 billion.
It condemned as “inherently unfair and unjust” the fact that people who get income from assets or property are taxed less than those who rely on real work.
While working people have been “hit by a pay loss of historic proportions” the wealth of multimillionaires and billionaires has boomed, said the TUC.
Campaign group Tax Justice UK, which earlier this year drew up proposals to raise up to £50 billion through taxing the super-wealthy, welcomed the TUC’s proposals.
Executive director Robert Palmer said: “With public services on their knees, and wealth inequality rampant, it’s high time the UK started taxing wealth properly. It’s great to see the TUC champion steps towards a fairer tax system.”
He said the public was “crying out for action” which would “go a long way towards raising money desperately needed for our schools, NHS and social security system.”
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