How does Labour plan to raise taxes and spend? This is Money podcast
Labour’s election manifesto has been revealed and it involves a huge £82.9billion spending spree – to be funded by a similar tax rise.
It outlined a 45p income tax rate above £80,000 and to leave no one in any doubt about its intentions opted to call its new 50p level above £125,000 the Super-Rich Rate.
On this podcast, Simon Lambert, Georgie Frost and Lee Boyce run through the main financial points of Labour’s manifesto, with a look at all the parties’ plans due at a later date after the Tory manifesto lands.
They look at the other Labour moves, including for capital gains will be taxed at the same level as income – with the annual allowance axed – sending the current 10 and 20 per cent CGT rate for investors in shares and funds – and 18 and 28 per cent for property investors – up to 20, 40, 45 or even 50 per cent.
Real change: Jeremy Corbyn revealed the Labour Party manifesto this week with the slogan ‘it’s time for real change’ – will the plans require a magic money forest?
Entrepreneurs would lose their special 10 per cent capital gains tax rate that rewards them for building businesses. Dividends would also be taxed the same as income, with the dividend allowance removed.
Inheritance tax reforms would be reversed, taking the amount a married home-owning couple can potentially leave tax-free down from almost £1million to £650,000.
Elsewhere, corporation tax will rise to 26 per cent, VAT will be added to private school fees, second home council tax will treble, 10 per cent of company shares will be put into employer funds with workers and the state sharing dividends, and a transaction tax would be brought in for the financial sector.
On the other side of the coin, Labour has promised billions for the NHS, infrastructure, public sector pay rises, free broadband for all, a rent cap for tenants and to nationalise the energy, water and rail industries.
The team also discuss the Conservative’s bid to fend off an NHS winter crisis caused by pension taper rules that are forcing older doctors to avoid doing work so that they do not get hit with big tax bills.
Also on the agenda, how buy-to-let repossessions are rising as landlords feel the squeeze and why falling house prices in London and South East mean some families are managing to reclaim inheritance tax after homes sell for less than originally thought.
And finally, we discuss the reg plate lotto, where drivers can try to win an entire lifetime’s worth of free petrol or diesel, worth almost £280,000.
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