Louise Haigh, a key ally of the prime minister, had suggested capital gains should go up to be closer to income tax, before she became Burnham’s first secretary of state.
In an article for the Renewal journal,, external Haigh argued that raising CGT would “shift the taxation burden away from punishing work, and towards unproductive capital accumulation which does little to grow the everyday economy”.
She said this could be accompanied by measures to ensure that “genuine investment returns are not penalised”.
Defence Secretary Wes Streeting called for a “wealth tax that works” in May, shortly after resigning as a minister in former Prime Minister Sir Keir Starmer’s government.
He had argued that equalising CGT with income tax would address an unfair system that was “penalising work”.
Healey had already ruled out levelling the two tax rates, according to a report in the Financial Times last week, external.
Asked about the government’s plans for CGT on BBC Breakfast, Communities Secretary Angela Rayner would not speculate on the Budget.
Pressed over whether rejecting calls to increase the tax was a win for the rich, she said the government had already taken steps to give people “breathing space” and help with the cost of living.
It comes after senior banking executives told the BBC they expect Healey to raise taxes on the sector. UK banks have been reporting bumper profits, leading to calls from unions for higher taxes.
Healey is due to set out his tax and spending plans at his first Budget on 28 October, against the backdrop of the US-Iran war which has led to rising prices.
The chancellor is under pressure to find measures to ease the cost of living and fund an increase for defence at his spending review next year.
The chancellor’s options for raising money are limited as Labour’s 2024 manifesto pledged not to increase income tax, National Insurance and VAT, the three big revenue raisers.
The government is also restricted in how much it can borrow due to its self-imposed rules on debt.
Source: www.bbc.co.uk
