Labour's love letter to the greedy rich

In a paywalled interview with the Daily Telegraph Rachel Reeves has pledged not to raise taxes on the rich.

In an interview with the Daily Telegraph (that’s hidden behind their paywall), Labour’s shadow chancellor Rachel Reeves has promised not to combat Britain’s appalling inequalities by raising taxes on the greedy rich.

Wealth Tax

Research has shown that a "Wealth Tax" on Britain’s top 1% of richest households could raise up to £130 billion a year without even affecting anyone with assets below £3.4 million.

Rachel Reeves is demonstrating her fealty to the tiny mega-rich minority by making it absolutely clear that she’s got no intention of applying such a tax.

Reeves knows full well that these richest households benefited enormously from the Bank of England’s £895 billion quantitative easing money creation schemes over the last decade and a half, and via thirteen years of Tory handouts to the mega-rich, but she’s got no intention of clawing back any of these hoarded riches for the benefit of wider society.

Mansion Tax

Everyone knows that the UK’s Council Tax regime is ridiculously outdated, unfair, and desperately in need of reform.

A system that rates property values on their market price in April 1991 is absurdly outdated because it takes no account of of the absolutely massive scale of property price inflation over the last 32 years.

Additionally the fact that large family homes end up in the same Council Tax brackets as vast mansions and outright castles is plainly ridiculous.

Labour could make the whole system fairer by modernising Britain’s ancient and unfair property tax regime to properly reflect modern valuations, and by introducing fairer bandings that differentiate between four and five bedroom family homes and the gigantic mansions of the extremely rich, but Rachel Reeves has made it absolutely clear that she’s not going to do so.

Top Rate of Income Tax

After the 2008 financial sector insolvency crisis the top rate of Income Tax was raised to 50%, but in the wake of the Brexit/Covid/Inflation triple-whammy the Tories have maintained the top tax rate at just 45% on income over £125,140 per year.

Rachel Reeves has promised Telegraph readers that she’s going to keep the Tory tax rate as it is.

She’s openly intent on representing the interests of people on six figure salaries, rather than ordinary workers who are wondering how they’re going to even pay their inflated housing and energy costs as inflation eats away the value of their wages.

Capital Gains Tax

One of the most glaring inequalities in Britain is the fact that speculators and property hoarders are subjected to lower tax rates on their profits (capital gains) than workers pay on their wages.

In 1988 the Tory Chancellor Nigel Lawson equalised Capital Gains and Income Tax, but subsequently they’ve diverged again to the benefit of the idle rich.

In defying the recommendations of the Office for Tax Simplification and promising not to equalise Capital Gains and Income Tax, Reeves is making two things absolutely clear.

That she’s actually to the right of Margaret Thatcher when it comes to taxation rates, and that she’s representing the interests of the idle rich above the interests of working people, both of which are utterly obscene positions for a Labour Party finance minister to be taking.

Why?

After 13 years of Tory ideological vandalism the UK has become a much more unequal country and investment rates are frankly embarrassing compared to other major economies.

Something needs to be done to begin reversing economic inequalities and to boost investment, but Reeves is outright refusing to do so.

She won’t raise taxes on the mega-rich; she won’t fund investment in the drivers of future economic prosperity (infrastructure, education, research and development, modern technologies, quality public services, transport, public health …); and she won’t even fund the relatively paltry sums required to reverse poverty-spreading Tory welfare reforms like the eugenicist two-child cap and Bedroom Tax.

Labour has been taken over by the radical right-wing fringe of Labour MPs who are way to the right of Margaret Thatcher in economic terms.

They’ve got absolute contempt for the founding principle that the Labour Party should represent the interests of ordinary working people in parliament. Instead they see themselves as a kind of ratchet lock to bake in all of the radical-right Tory reforms of the last 13 years, so that the Tory party can continue surging to the right from where they left off, once they get back into power.

They’re not going to raise taxes on the rich; they’re not going to make the tax system fairer for people who actually work for a living; they’re not going to reverse any of the Tories’ most damaging privatisation scams; and they’re not going to invest for the future.

Rachel Reeves’ love letter to the greedy rich makes it absolutely clear that Labour are intent on pandering to the wealthiest minority, and on pushing the same utterly discredited “Trickle-Down” economics and austerity ruination as the Tories.

Which leaves us to wonder what’s the point in even voting for them if they’re just going to do the same horrible stuff as the Tories just with red ties on, and why the trade unions insist on bankrolling them when they’re so open about serving the interests of the idle rich, not the interests of ordinary working people.