Mansion tax could replace 50p income tax rate

The 50p higher rate of income tax is to be abolished and could be replaced by a ‘mansion tax’ targeting property millionaires, business secretary Vince Cable has said.

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by Victoria Bischoff on Mar 28, 2011 at 09:13

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The 50p higher rate of income tax is to be abolished and could be replaced by a ‘mansion tax’ targeting property millionaires, business secretary Vince Cable has said.

In the Budget last week chancellor George Osborne reiterated that the 50p tax rate imposed on those earning £150,000 and over was only ever meant to be a temporary measure, though he claimed he would not be removing it just yet. Osborne has asked HM Revenue and Customs to investigate how much money is actually being raised from the tax.

Vince Cable told BBC Radio 5 Live that he agreed with the chancellor that the government should scrap the 50p tax rate, but stressed that any change has to be ‘fair overall’.

‘It needs to be a change which is fair overall and does take account of the fact that the wealthy have got to pay their share, and the emphasis may well have to shift from high marginal rates of tax on income which are undesirable, to taxation of wealth, including property, and the chancellor said that,’ he said.

When asked if this meant owners of expensive property could face a ‘mansion tax’, Cable said we need to have a ‘proper base for taxing property’ and that this is something the government will be considering as it looks to move away from the higher rate of income tax.

In a bid to reassure the public that high earners will continue to pay their fair share meanwhile, deputy prime minister Nick Clegg told the Financial Times that the 50p rate will not be replaced until the lower middle classes were ‘breathing more easily’.

He added that he was not looking to revive the Liberal Democrats’ 1% ‘mansion tax’ on properties over £2 million, but did not rule out looking at the way the council tax and stamp duty systems are structured. In the budget the chancellor also warned the government will be cracking down on wide-spread tax avoidance to ensure owners of high-end properties pay their fair share.

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6 comments so far. Why not have your say?

It does not follow that people who live in large houses have a large income Some may be elderly widows who are living on investment income which have been deplated due to the banking crisis banks are not pay dividendsw any more and very low interest rate which are currently available

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More left wing propaganda from the green eyed lib dems. The tail continues to wag the dog. When are the tories going to wake up to the fact that higher rates of taxation reduce the overall tax take. We need lower taxes not higher and less

meddling.

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The so called cuts are only reductions in increased spending. When are we going to get back to real economics? A split between welfare spending and over/complex taxation of so called rich people ( assets over £16k ) needs to be made immediately. I would suggest a 30% flat rate Income Tax & no Death Tax for starters and obviously smaller government (by the way the NHS isn't government).

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Well said Williams! Another scheme to try and catch the super rich tax dodgers because other HMRC attempts are not succeeding. The smart will invariably outrun HMRC. Knee-jerk taxation changes never work without alienating. Today it is those that choose to invest their income in property. Tomorrow something else when the £s don't materialise.

Folks will spend their money somewhere. I choose my lavish home. Would Cable rather I exported my earnings buying expensive German cars and multiple lavish holidays like most I meet at the school gates? Them is the prime candidates frankly. At least some of my money goes back into the economy on cleaning, gardening, maintenance.

Right now I'm so sick of it all that I am actively calculating how many more years of slaving to pay for government excess and layabout Britain. Invest and save as much as I can then retire early, screw the high taxes, work in the black economy myself, see more of the kids. How is that going to help the country?

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The green eyed genie is being paraded for consideration, and is a dangerous trend.

Yes I evy the rich their style of living, but would not attack their success, because inevetably the trend would then be applied downwards until it affects anyone who has more than the wretch in the gutter. Communism tried this, and the upper echelons lived like the people the were targeting, but being exempt from the rules they were applying, and that then brought on the likes of Gadaffi, Mubarack, \mugabe etc. They dare not relinquish power because the scrutiny of their conduct and actions.

The present system is far from perfect, indeed most imperfect, but at least those who strive and succeed, lawfully, should be entitled to enjoy their lawfully acquired fruits. Those attacking them want, without effort, to take away those fruits and as always there are some who will pander to the wholly misguided desires of the have nots and will nots to achieve a position of power and privilege.

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Anonymous 1 needed this 'off the record'

Mar 29, 2011 at 14:38

whats wrong with 50% tax if the well off stop hidding there money with all the loop holes the tax rate might come down.less people looking at were the money is hidden.people on pay as you earn carnt hide there money through clever accounting so dont always knock the low earners.they didnt give all the top goverment workers big bucks with final salery pensions.mayers.mps doctors. accountants for the state are not average earners .stop all the loop holes and perks and then cut the taxes.but that wont happen because the people at the top dont want it to stop

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