Andy Burnham - can we afford his proposals?

[ChirpieCheese]

How can we afford Andy Burnham's policies?!

What are Andy Burnham's potential policies? - BBC News share.google/vcQgOEAuZ9QJfhLzD

Can we afford not to ?
Short term pain for long term gain.

I agree but we should remember, those policies are the BBC's ideas of potential policies, not what AB has actually proposed since winning in Makerfield

Do you have a link to his proposals?

Keen to understand if BBC misleading.

I agree nice to spend more, but from where?

Reading the article a fair bit is costed (eg reforming social care, the land value tax).
Personally, I would increase capital gains by another 5%. That would raise substantially more AND capital gains would still be below income tax. You could use some of the money raised to lower business rates and could also include capital gains tax breaks for money invested in particular things (eg British based businesses) if you wanted.

But as another poster said it's all based on speculation

I personally can’t afford to. I’m already forking out around an extra £1k a month th since Labour came into power. No more.

1k a month in what?

I echo @BoredZelda question.

He hasn't made any. He became an MP today.

How exactly have Labour increased your outgoings by £1000 a month?

They may run a business so the increase in minimum wage, the lowering of the NI threshold and increase in employer contributions could be responsible, plus possible increases in business rates and levies. It mounts up. 🤷‍♀️

The issue is that raising capital gains tax rarely brings in what you expect as people decide not sell.

About 10k a month here.

For 5% extra tax? That's why I didn't say raise capital gains to be equal to income tax. Which would be fair (it's not fair that active work is taxed more than passive income) but would have unintended consequences. Someone selling and willing to pay 20% tax (on CG over 100,000) isnt going to be automatically put off paying 25% tax (on CG over 100,000) unless they believe it's a very temporary situation and likely to go down the next year. Which is why stability and being able to demonstrate the reasons in favour/bring the public onside is important. Because that way, even a newly elected government would struggle to change it back (and risk losing revenue AND public support). And so long as the people contemplating selling are aware of this.

Someone who made a profit of 150,000 from selling (that's not how much money they have, just the amount of money their money made) would be paying an extra 5% of 50,000 so an extra 2,500. You couldn't even buy a decent Rolex for that.

Capital gains tax is a tax on inflation as well as “gains”. Just saying that as it’s raised people decide not to sell. There is no capital gains tax on death so you can just keep until you die and pass on. Because of this raising it won’t bring in as much as anyone hopes.

There is however inheritance tax
I do see your point. Any tax raised has to be carefully thought through to avoid unintended consequences. But bearing in mind inflation is unlikely to be so much that it comes to more than 75%. If it is, we have bigger problems. And for very very long term investments which are more affected by inflation you can have other rules.
But you have a point about the unintended consequences. That's why even though I think some kind of land tax is a good idea, I don't think it's as simple as the people who have just discovered Georgism think. The last time the UK tried it it backfired quite badly. That doesn't mean it's a bad idea. Just it needs clever people implementing it

He’ll be out before he manages to take even one of his proposals through the parliament. This country is ungovernable.

@Persephonia1966 the general consensus is that CGT is already at roughly the revenue maximising rate and any increase is likely to reduce revenue rather than increase it. As PP have said, if you put it up too much people choose not to sell assets, and wait for the next Conservative government to come in and cut the rate.

Capital gains tax was reduced when indexation allowance was removed. If they want to align it with IT rates then they would need to look at indexation allowance again.

having the lower rate was deemed to make it easier and the tax take wasn’t greatly impacted

simplifying the tax system would be far better rather than adding in new taxes that ultimately raise very little or complicating existing taxes. Simplification reduces the tax gap and reduces the cost to business and HMRC of administrating it all

It depends on how long term you are thinking. In the short term (say a year) it might not bring in much extra since some people would be discouraged from selling. Although by not making the increase drastic (5%) it would hopefully not have such a drastic impact on behaviour that revenue would drop. Essentially you would aim to break even. However if it was allowed to remain at that rate as it became "normal" behaviour should also return to normal and then the government would be making more revenue.
Besides which it's not just income from CG tax that matters but income from income tax. Currently having a much lower rate of CG tax incentives "the rich" to pay themselves/be paid in shares not income. Nothing wrong with shares. But it's easy to make sure you pay substantially less tax by making sure all your money is capital gains not income. Which is something ordinary people can't do. Increasing CG makes it fairer. And if it means some people chose to take their pay in income which they can spend straight away than shares (which they need to sit on in the desperate hope that CG will fall) then the government can also make money there too.

Cutting business rates at the same time would encourage actual investment in the economy/be business friendly so it's not about punishing entrepreneurs.

Well we definitely can’t afford another Tory government: they have no care for the vulnerable, they only care about making the rich richer and even more privileged. They decimated the NHS, education care services, slashed council funding.

I just realised I made a mistake in the amount of tax paid on CG. The upper levels 4% higher than I thought. But my general point stands.
Maybe they could raise it slowly by 1% at a time.

I think that list looks good! I wish we didn't need to spend more on defence, but we obviously do given the current state of affairs.

Sorting out social care would save the NHS money and relieve pressure on council budgets. That would enable councils to review the not-very-fair system by which council tax is charged and cutting business rates would help more high street businesses to stay open. My town has loads of empty retail/restaurant units, which shows that the current system isn't working.

Shocking.
I understand and I’m so sorry.