Wealthy Brits May Be Looking at New "Emergency" Tax to Aid Recession

Photo Credit: Graeme Robertson for the Guardian

It looks like the U.S. isn’t the only one in a debate over taxing the wealthy. While President Obama and Mitt Romney go head-to-head with their ideas on how to better our current economic situation, across the pond, Deputy Prime Minster Nick Clegg is discussing an “emergency” tax on high-net-worth Brits, according to CNBC. As head of the Liberal-Democrat Party, Clegg believes a onetime tax, instead of an income tax, will help evade any social backlash as the recession carries on.

Clegg made a comment to the Guardian that "fairness" would be pivotal in continuing to endure a difficult and lengthy recession, saying "While I am proud of some of the things we have done as a government, I actually think we need to really hard-wire fairness into what we do in the next phases of fiscal restraint...If we don't do that I don't think the process will be either socially or politically sustainable or acceptable."

Conservatives have voiced their disagreements, with the Chair of the House of Commons' public administration committee, Bernard Jenkin, telling the BBC "If the politics of envy made a country rich, we would be a very rich country… "I think most rich people are contributing far more in tax than other people.” He also went on to say raising taxes on the rich will drive them out of the country to avoid it altogether. Mary Macleod, another member of the Conservative Party, also spoke to the BBC: "This is Nick Clegg saying let's try out a few ideas before party conference, probably will cheer up a few Lib Dems to talk about it. But it isn't government policy."

Taxes on the wealthy have recently gone down from 50% to 45% in April out of fear of the rich fleeing abroad and the prolonged economic state. Spokesperson for the Liberal-Democrat Party Treasury in the House of Lords, Baroness Susan Kramer admitted to the Guardian that the 50% tax was simply not working. "At the upper end, income tax probably doesn't work effectively and therefore looking at a wealth tax is a very interesting way to go.”

She went on to say: “I don't think anyone ought to stand up anywhere in politics and say there is a group that are so wealthy that they should be given a free ride and should be excluded from having to carry the kind of burdens that other people have, particularly in a time of austerity like this…If we're going to be a coherent society, and that is absolutely fundamental to our success and our prosperity, everyone has to carry a share of it."

As the debate goes on, on our own soil and abroad, it will be interesting to see what policies each government decides will be most effective in relieving these economic hardships, and what reactions come from both sides.


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