Professional classes stand in way of tax on the super-rich | Phillip Inman
The article argues that affluent Generation X and baby-boomer professionals are a powerful obstacle to tax reform aimed at the very wealthy. Its author says their defence of property, pension and inheritance advantages helps preserve a complex tax system that discourages work and investment while allowing the super-rich to avoid a larger contribution.
It suggests Andy Burnham, described as the new prime minister, may need tax rises because borrowing capacity is limited and he wants to fund measures to improve living standards. The proposed alternative is a land value tax replacing council tax and stamp duty: a Tax Policy Associates paper estimates a flat 1.28% rate could raise £56.7bn, compared with £45.2bn from council tax and £11.5bn from stamp duty, while about 70% of homes would pay less.
In short
- The author argues professionals protect tax advantages favouring wealth.
- A land value tax is presented as a fairer alternative.
- The proposal could raise £56.7bn annually.
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The strongest fair case each way — we don't pick a winner.
The case for
Supporters argue that replacing council tax and stamp duty with a broadly based land value tax would make taxation fairer and more economically efficient. They contend that land wealth, often amplified by public investment and planning decisions, is undertaxed relative to work and productive investment, and that a reform which leaves most households paying less could raise needed revenue while asking those with the largest property gains to contribute more. In this view, protecting existing pension, inheritance and housing advantages entrenches inequality and makes it harder to fund improvements in living standards.
The case against
Critics argue that a land value tax could impose substantial new annual costs on people who are asset-rich but cash-poor, including older homeowners whose homes have risen in value without providing them a higher income. They may also question whether headline estimates adequately capture valuation difficulties, regional disparities, behavioural responses and the disruption of replacing familiar taxes. From this perspective, property, pensions and inheritances often represent prudent saving and family security rather than avoidance, and reform should avoid penalising people who have planned their lives around the current rules.
Explained simply
The government is considering new approaches to taxation to fund public services and address wealth inequality. With limited borrowing capacity, policymakers are exploring ways to increase tax contributions from the very wealthy.
A significant obstacle to such tax reform comes from affluent middle-class professionals and older generations who benefit from current tax advantages around property ownership, pensions and inheritance. These groups have considerable political influence and oppose changes that would affect their financial situations.
One proposal under consideration is replacing council tax and stamp duty with a land value tax. Supporters argue this could raise more revenue overall whilst reducing bills for the majority of homeowners.