Wealth Tax for Over 40s

Published / Last Updated on 19/07/2018

Health and Social CareEarlier this year a propoal was made by the Intergenerational Commission, set up by the ‘Resolution Foundation’, that pensioners should pay more in tax to enable young adults to be gifted £10,000 at the age of 25 to help with study fees, house deposits or other training and development.  In essence to balance out wealth, taxes and benefits for society to be fair for all.

We now have a new proposal suggested at the start of this month by two House of Commons Committees (The Housing, Communities, Local Government Committee and the Health & Social Care Committee) to introduce a new tax for the over 40s called a ‘Social Care Premium’ in addition to some higher inheritance tax rates for larger estates to help cover the funding gap for ever increasing NHS and elderly care costs.

They call it a ‘Social Care Premium’ we call it a Wealth Tax.   The more you earn or the more you are worth, the more you pay.

It is accepted that with an ageing population, there is a time bomb already ticking with lower numbers of younger workers paying income taxes and national insurance contributions to fund ever spiralling health care and social care costs of the NHS and Local Authorities respectively.

Have They Already Paid?

Our view remains unchanged after the £10k gift suggestion earlier this year.  Taxation is a burden that should be shared by all and not just older generations.  The older generations have already paid much higher taxes in the past than the younger generations of today.  After World War 2 and through the 50s and 60s, the highest rates of income tax were between 99.9% and 90% then reducing to 75% before going back up to 83% in 1974.  If we now take a look at the last 45 years of income rates, you will soon release that those in their late 40s, 50s, 60s and older have already paid more taxes as a proportion of income than we are paying today.

  • 1974/78 -  Basic Rate Income Tax (BRT) was 33%, Higher Rate Tax (HRT) 83%
  • 1979 - BRT 30%, HRT 60%
  • 1986 - BRT 29%, HRT 60%
  • 1987 - BRT 27%, HRT 60%
  • 1988 - BRT 25%, HRT 40%
  • 1996 - BRT 24%, HRT 40%
  • 1997 - BRT 23%, HRT 40%
  • 2000 - BRT 22%, HRT 40%
  • 2008 - BRT 20%, HRT 40%
  • 2010 - BRT 20%, HRT 40% and a new 50% Additional Rate Tax (ART) for earners over £150,000
  • 2013 - BRT 20%, HRT 40% with ART reduced to 45%

Health & Social Care Should Be Funded By All

The problem with an ageing population is it is they that control the vote.  If you vote to tax over 40s more then they will “vote with their feet” which leaves politicians ‘hamstrung’.  There should be a national debate and a referendum, carefully worded of course, unlike the Brexit referendum, to gain a national view on taxation and funding health and social care.  We are sure that if you asked most people for an extra 1% or 2% in income to support the NHS and Care, then it would be a ‘yes’ vote.    The reality, and we have said it before: ‘successive governments have totally ignored, dare we say for political gain only, the reality of the demographic change in this country’.