Mansion tax could replace 50% rate
High earners could be hit by a new property tax if the 50% tax rate is scrapped, says Vince Cable.
Speaking on Radio 5 Live the business secretary admitted that a new 'mansion' tax could be introduced in place of the 50% income tax rate, if it is abolished, to ensure changes are "fair overall".
Cable agrees that taxing high earners unnecessarily could be damaging politically; however, he insists the wealthy still need to pay their share:
"The emphasis may well have to shift from high marginal rates of tax on income which are undesirable, to taxation of wealth, including property."
When then asked if this would result in a 'mansion tax' Cable told Radio 5 Live that a "proper base for taxing property" is needed and that the government is looking into possible options.
At the Liberal Democrats' Autumn Conference last year, Cable said in a speech that he was disappointed a mansion tax on the super rich hadn't made it into the Coalition Agreement:
"It will be said that in a world of internationally mobile capital and people it is counterproductive to tax personal income and corporate profit to uncompetitive levels. That is right."
"But a progressive alternative is to shift the tax base to property and land, which cannot run away and represent, in Britain, an extreme concentration of wealth. I personally regret that mansion tax did not make it into the Coalition Agreement."
In last week's budget, chancellor George Osborne announced that the 50% tax rate for those earning above £150,000 was only a temporary measure and will in time be scrapped.
HM Revenue & Customs has been asked to look into how much money this rate is raising.