Hidden tax that keeps British workers' salaries low - new report shows way out
Fresh research shows how capital-gains tax impacts everyday workers wages and productivity. Report suggests removing this tax could boost UK economy by £25bn yearly‚ with workers being main winners
After Labourʼs July election win‚ Rachel Reeves keeps saying they wont raise taxes on working people; however this promise might need a closer look (especially when it comes to capital-gains tax)
A new study from Peter Young at the Adam Smith Institute shows how capital-gains tax hurts regular workers: its making UK less productive than other countries. Since 08‚ UKʼs per-hour work output grew just 0.5% yearly - while US showed three-times better results
The math is simple - British workers get paid 30-50% less than US ones‚ and UK salaries havent grown much since 05. This tax creates a chain reaction: less investment leads to fewer modern machines; which means workers cant do their jobs as good as foreign competitors
Hereʼs what makes capital-gains tax so bad for the economy:
* It taxes same money twice
* Doesnt account for high inflation
* Makes people keep assets instead of selling them
* Stops new companies from growing
Countries that dont have this tax - like Belgium Netherlands and New Zealand - show better results. When Ireland cut its rate in half back in 97‚ they got double the money in just 2 years. The report says getting rid of this tax could add £25bn to UKʼs income by late 25
Capital gains tax is the worst tax on working people because it holds down peoples wages through its effect on reducing productivity
Even past leaders saw this problem: Kennedy cut these rates in US‚ while Tony Blair and Gordon Brown made them lowest since Harold Wilson put them in place. If Reeves wants to help workers she might need to look at this tax again
