Richard Burgon has stated on Twitter that the UK’s wealthiest should pay for our response to the Covid-19 crisis.
The former Shadow Cabinet Minister and MP for East Leeds has called for the UK to copy Argentina’s method to recover its finances after the Covid-19 pandemic.
Last Friday, Argentina passed a one-off levy (which has been called a millionaire tax) to help the Government rebuild the economy and pay for social programmes, after Covid-19 devastated its economy.
The tax, which will affect 12,000 people, has led to an increased tax rate of up to 3.5% for those inside Argentina and 5.25% outside the country.
In his Tweet, Mr Burgon stated: “Argentina has passed a new tax on its wealthiest people to pay for its response to Coronavirus. That’s exactly what we should do.”
Argentina has passed a new tax on its wealthiest people to pay for its response to Coronavirus.
That's exactly what we should do.
— Richard Burgon MP (@RichardBurgon) December 7, 2020
The Wealth Tax Commission has also backed this proposal, calling for a tax on “millionaire couples” rather than increasing income tax or VAT.
The Commission believes that this would be a fairer method than “raising tax on incomes, or goods people buy or by increasing national insurance contributions”.
The Commission likened their proposal to other one-off tax proposals, such as the post WW2 infrastructure projects that took place in Europe and Japan, or in Ireland after the global financial crisis.
But this idea was challenged by Madsen Pirie of the Adam Smith Institute, who said the tax proposal goes against “what most people see as a fair principle: that buyers, sellers and facilitators of transactions take a cut – including the state though tax”.
He then compared the idea to “attempting petty theft by instalments, only the numbers they’re proposing to rob from people’s pockets are pretty substantial”.
The Treasury said in response: “We are committed to a fair and efficient tax system in which those with the most contribute the most.”
The spokesman added: “We’ve also taken steps to ensure the wealthy pay their fair share, reforming the taxation of dividends, pensions and business disposals to make the tax system fairer and more sustainable.”