The Conservatives have a new financial spokesperson . He’s articulate and he speaks good sense to those who read him in the Times and Telegraph. Tom is a voice for those who have money or who aspire to be wealthy. He promotes conventional means to build financial security.
I have said for some time that he should be a politician as well as a financial commentator . I take issue with the politics but I trust Tom, I like him , but I just don’t agree with him! That doesn’t mean that that this blog should not promote what he is saying.
Here’s Tom in the Telegraph. Is he becoming the Tory’s counter to Torsten Bell.
It is fashionable these days for Left-wing politicians and commentators to declare that those with the broadest shoulders should pay a bit more, that we all have to do our bit and pay our fair share. So go the demands of the state in search of funds to sustain its spending plans.
It is bad already, but it is about to get worse. Let’s not forget the top 1pc of the population already pays around 30pc of income tax, while the top 10pc pay around 60pc.
These days, anyone who has done well in life needs the shoulders of Atlas to bear the load the Government is asking them to carry. Yet still the demands come for more taxes and more of their “fair share”. We cannot carry on like this.
Inheritance tax is the big daddy of wealth taxes and it is about to get much, much worse.
From April next year, unspent defined contribution pension funds will become liable for inheritance tax at 40pc. This is bad enough, but to compound the misery, if you die after age 75 (as most do) then your heirs will also have to pay income tax on the money when they take it out of the pension.
For anyone who is a higher-rate taxpayer (soon to be almost all of us, thanks to frozen thresholds), this means the state will be expropriating 64pc of the pot of money you were hoping to inherit/pass down. Is this what a fair share looks like?
From April 2029, your ability to divert some of your salary into your pension, thereby immediately enjoying higher-rate tax relief and also avoiding National Insurance costs, will be capped at £2,000 a year. So the state is pulling up the ladder behind the Baby Boomers and denying younger cohorts the opportunity to build decent retirement pots of their own.
Along the way, the pension tax-free lump sum has been frozen and higher earners have largely been shut out of the pension system, thanks to the tapered annual allowance. If you access your defined contribution pension and then your circumstances change, you’re restricted in how much you can pay in to rebuild it.
Civil servants and Members of Parliament remain immune from these assaults on retirement savings wealth and can continue to accrue gold standard guaranteed pensions at the taxpayer’s expense. Because that’s only fair, isn’t it?
Want to rent out a property? From next year, you will be subject to an additional 2pc tax above normal income tax rates. The Government’s logic for introducing this additional income tax charge – in another breach of their manifesto pledge – was that property rental income isn’t subject to National Insurance, unlike earnings from a job. To which many of us would cry “that’s because it’s an investment, not earnings”. But we shout in vain.
Want to save money in a cash Isa? From next year, your allowance comes down from £20,000 to £12,000 if you’re under 65, with additional complicated rules to prevent you sheltering cash in an investment Isa.
This has become a great country in which to be a bureaucrat, but a terrible country in which to try and grow wealthy. How have we let this happen?
Beleaguered ministers in the Treasury search in vain for new ways to extract more money from us. All the while, they misunderstand the nature of the problem – it isn’t about taxing more, it is about simplifying taxes and spending less.
Until they realise the only answer lies in a ruthless cutting back of the public sector, we should expect the fiscal beatings to continue.
Labour won’t stop until no one saves a penny for themselves
Stealth wealth taxes are already eating away at hard-earned savings – but it’s going to get worse