City think-tank calls for an FTT
The Chancellor’s Spring Budget backtracked on his Party’s election pledge not to raise National Insurance.
At the same time as hitting the self-employed, he is not listening to a City think-tank which is calling to tax the banking sector more.
The UK’s FTT, the Stamp Duty on shares, predates income tax – it’s old, it’s reliable and it’s sustainable. Currently it raises £3bn/year but the tax hasn’t been modernised in 30 years. If it was, how much more could be brought in to support the most vulnerable?
Avinash Persaud, a former banker, has answered that question. In his new report, Persaud shows that by modernising and extending the UK’s FTT to tax newer types of trading, an additional £5bn/yr could be raised without threat of business relocation. That’s an extra £25bn over the course of a parliament.
With that extra revenue, in one year the government could…
- Train the 30,000 nurses needed to fill all NHS vacancies until 2020;
- Close this year’s social care budget deficit;
- Develop more than 15,000 social homes
- Build over 30,000 medium sized wind turbines
Persaud’s argument goes even further.
He says that extending the tax “will reduce…dangerous behaviour in financial markets”, the same behaviour that sparked the crash and continues to affect the lives of ordinary working families but not the financial sector.
Even with substantial reductions in profit this year, investigations for money laundering and excessive fines, bankers’ bonuses have reached pre-crisis levels for the first time in 9 years. Taxing banks more is long overdue, particularly for a sector that can clearly afford it.
If the government are dedicated to making our economic and tax system work for all, modernising and extending the UK’s FTT is a must.
Download the full report here