Rachel Reeves is preparing the ground for the extinction of the middle class
The Chancellor’s obscene tax grab will turn millions of ordinary homeowners into dispossessed tenants
The pitch rolling has started. The propagandists have been unleashed. We are being softened-up for the ultimate betrayal, the most obscene of broken promises, the grossest attack on private wealth in living memory.
If you are a homeowner, I have grim news: Rachel Reeves has just declared war on you. You could pay even more tax, so much so that in some cases you may be forced to sell your house to pay the bill – and then to hand over yet more cash just to be allowed to say goodbye to your beloved family home.
Reeves is considering several options, all abhorrent: an annual proportional wealth tax on the value of homes, large enough to replace stamp duty, council tax and more; the imposition of capital gains tax (CGT) on primary residences for the first time ever, albeit just on more expensive ones at first; an “exit tax” as an alternative to CGT, payable on sale; and a revaluation of council tax, with even higher bands, including a mansion tax.
Britain is in the midst of an epic struggle between tax-eaters and net taxpayers, between those seeking to squeeze ever more out of the private sector to keep our bankrupt welfare state going a little longer, and those desperately seeking to preserve their wealth at a time of weak GDP, stagnant real wages and rocketing costs.
We have almost reached the economy’s maximal taxable capacity, at least with the tools at HMRC’s disposal. The bond vigilantes are circling, and Reeves has taken the UK to the brink of fiscal meltdown. Her party won’t allow her to cut spending, so she is turning to the last untapped El Dorado, the final pot of cash ripe for raiding: our homes, worth trillions of pounds in total. If she goes down, she wants it to be in a blaze of Left-wing glory, taking out the forces of conservatism’s last bastion and scoring the greatest victory for socialism since the glory days of Hugh Dalton and Sir Stafford Cripps.
Primary residences have long been the great tax taboo, the last line of defence against predatory politicians: no government has been able to directly tax their gains in value or to impose an annual levy (a property wealth tax) over and above council tax.
Slapping CGT on primary residences or an annual property wealth tax based on the value of one’s home isn’t some minor technocratic tweak to the tax system to make it slightly more ”efficient” or “fair”: it’s an attempt at dynamiting the foundations of our society, to drastically curtail the power of the petite bourgeoisie, and to enshrine the political class’s supremacy.
Unlike with ISAs or pensions, whose tax-beneficial status are understood to survive at the Chancellor’s discretion, primary residences are an Englishman’s tax-free castles, for which we assume we have a natural right not to be taxed. This is one of the last in-built libertarian assumptions in British society, and the reason why Reeves’s proposed tax “reforms” are so pernicious.
Tim Leunig, who advised Rishi Sunak and whose Left-wing ideas are also proving attractive to Reeves, is advocating for a 0.44 per cent levy on homes worth up to £500,000 to replace council tax. He simultaneously wants stamp duty to be replaced by a 0.54 per cent annual tax on homes above £500,000, with an extra 0.28 per cent supplement on values over £1m. These would be revenue-neutral, which wouldn’t be good enough for Reeves: she wants to raise billions more. The rates would need to be even higher.
I loathe council tax and stamp duty, but this idiot savant scheme would create Britain’s first annual wealth tax, levied on a stock of illiquid assets, and would prove even worse. Property rights would be abrogated, and homeowners downgraded into leaseholders, paying the state-cum-landlord a fee for the right to keep living in our homes. The ancient tradition of the yeoman freeholder would be extinguished.
Many homeowners would end up paying £7,000, £15,000 or more a year….
The Telegraph: continue reading
See Related Article Below
Families Clobbered as Labour’s Tax Raid Fuels Inflation Surge
CP
Brits are being hammered yet again as inflation shoots up with critics blasting Labour’s “reckless” tax raids for piling pain onto hard-pressed families.
Fresh figures from the Office for National Statistics show prices soared by 3.8% in July, up from 3.6% in June – and above analysts’ gloomy forecasts.
The jump has been linked to Chancellor Rachel Reeves’s Budget bombshell last year, when she hiked National Insurance contributions and forced through higher minimum wage costs for employers. Firms have responded by whacking up prices, leaving ordinary shoppers to pick up the tab.
Shadow chancellor Mel Stride tore into Reeves, warning:
“Labour’s choices to tax jobs and ramp up borrowing are pushing up costs and stoking inflation – making everyday essentials more expensive. And with leading economists warning that the Chancellor has blown a colossal black hole in the public finances, families and businesses are bracing for yet more pain come the Autumn Budget.
Families are paying the price for Rachel Reeves’ economic mismanagement. Britain can’t afford Labour.”
Holidays and groceries hit
ONS said spiralling transport costs, with air fares surging as families tried to jet off for summer holidays, were one of the culprits. Food inflation also leapt, hitting 4.9%, the worst since Covid, driving up the price of staples such as meat, chocolate, fresh juice and coffee. Hotels jacked up rates too.
In The Telegraph, ICAEW’s economics boss Suren Thiru slammed the government’s tax hikes, saying:
“Increasing services inflation suggests that rising National Insurance and national living wage costs are exacerbating underlying price pressures by more than offsetting the current downward squeeze from looser labour market conditions.”
Reeves shrugs
Despite the dire data, Reeves insisted there was “more to do” but claimed her tax-and-spend agenda was the right one. However, the grim figures leave the Bank of England in a bind. Hopes of another rate cut to ease pressure on borrowers have been dashed, with markets now betting rates will stay higher for longer.
ONS chief economist Grant Fitzner confirmed:
“The main driver of inflation was a hefty increase in air fares, the largest July rise since collection of air fares changed from quarterly to monthly in 2001… The price of petrol and diesel also increased this month, compared with a drop this time last year.”
Markets reacted instantly – the FTSE 100 slipped 0.1% to 9,177.37 while the FTSE 250 fell 0.3% – as traders braced for more bad news.
For millions of families, however, the reality is already clear: Rachel Reeves’s so-called “stability” means soaring bills, higher taxes and no relief in sight.
This article (Families Clobbered as Labour’s Tax Raid Fuels Inflation Surge) was created and published by Conservative Post and is republished here under “Fair Use” with attribution to the author CP
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