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UK Tax: This is a tax too far - for most of us

by Peter Mullen, 01 June 2022 -- The new coalition Government has already demonstrated that, when it comes to taxation policy, it intends to be even more unfair than the discredited Labour government which the people have so resoundingly thrown out.

The coalition, driven by the left-wing fervour of such as Vince Cable, aims to raise capital gains tax from 18 per cent to 40 per cent.

Of course, when capital gains tax is mentioned, most folk imagine it is something that affects only the rich. So that's all right then, as no one minds punishing the wealthy toffs.

But capital gains tax does not only affect the rich. Working class people who save for their retirement by investing from their weekly wage in their employers' businesses will be taxed under this new proposal. As many as 700,000 of these modestly paid ordinary folk will be penalised.

Mike Warburton, an accountant at Grant Thornton, said: "There are many very ordinary working class people, including Tesco checkout girls, who have saved for many years and could end up paying capital gains tax. Is that fair? I'm not sure it is."

It most certainly is not fair. What Mr Cable and his colleagues who have agreed this punitive tax rise do not understand is that those who will pay the new levy paid tax on that money already when they earned it.

What is being punished here is responsibility.

Nothing could be more moral or responsible than saving for one's retirement and old age. This should be encouraged by the Government, not punished. For every pound saved by the individual during his working life is a pound which does not have to be found by the state's welfare system to look after him in his retirement.

The left has always punished investors and that is why socialist-run economies stagnate.

For investment is not the personal greed of fat cats. Investment is usually made in companies which manufacture goods or provide services. When you or I invest, however modestly, we are thereby helping the productive section of the economy - and we are providing jobs for those who work in that sector.

If the Government adopts a taxation policy which penalises those in work, then the number of those in work will fall and the burden of taxation will rest on a constantly reducing number of people, while those requiring the welfare support derived from taxes will always be on the increase.

This is the law of diminishing returns and is the worst of all worlds. We all know the only two things certain in life are death and taxes and we know that taxation is necessary for the maintenance of a decent society - schools, hospitals, law and order and so on.

But the tax policy has to be fair and be seen to be fair if the Government wants public approval.

The increase in capital gains tax is blindingly unfair and it comes on top of other taxes which make Britain one of the most severely taxed of all the developed nations.

We are overtaxed. We pay tax on our wages, tax on what we buy, tax on our hard-earned savings and tax on what we leave when we die. It is too much. And it hurts both the individual paying the tax and the nation's productive capacity and hence the prosperity of all.

The capital gains tax increase is a tax too far. David Cameron should ignore Mr Cable and his vindictive politics of envy. Axe the tax, Dave.
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