By Tim Montgomerie
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EmergencyTaxIt's not unreasonable to see Nick Clegg's call for an emergency tax on Britain's wealthiest people
as (i) another attempt by him to shore up his beleagured position
within a very unhappy party and (ii) another sign that the Coalition
will drift to the Left. Tory backbencher Bernard Jenkin certainly sees
Clegg's intervention as a sign of the politics of envy. He told the
Today programme that if we keep increasing taxes we will kill the goose
that lays the golden eggs.

Regular readers will know that I support a shift in the nature of taxation,
away from the taxation of wealth creation and towards the taxation of
accumulated wealth. I think it's the policy position I hold which is
most unpopular with readers! In particular I support extra council tax
bands for larger properties and a special tax on the sale of large properties. Many people got
wealthy during the boom years not because of great ingenuity on their
part or through hard work but because they invested in Britain's highly
state regulated property market. They benefited from state intervention
and that benefit should now be taxed by state intervention. I don't want
to confiscate all of their gain – or even most of it – but I think it's
right that the propertied wealthy make a bigger contribution to the

I want the Conservative Party to get into this debate for three big reasons:

  • Wealth taxes (especially on property) are harder to avoid than income taxes.
  • If there is going to be higher wealth taxes – and there is
    considerable public support for them – then they need to satisfy three
    key criteria:

    • They should be levied at a reasonable rather than a socialist rate;
    • They should replace other more harmful taxes (especially income
      taxes) and not be used to simply increase the size of government;
    • As much as possible they should be imposed on flows rather than
      stocks of wealth (sales of expensive properties rather than annual
      mansion tax-style levies).
  • Wealth taxes are part of a huge fairness agenda. Not just fairness
    between the wealthy and those without but about the tax burden between
    north and south and between the old and the young. A reasonable wealth
    tax can be used by the Conservative Party to signal that we are not the
    party of the privileged and already propertied in the South East but
    also the party of the young northern entrepreneur* or homebuyer who is starting out in
    life. More taxes on mansion owners in the south to fund less taxes on
    younger people starting out in life. If the Conservative Party embraces
    such a policy it's the nearest thing we have to a Clause IV moment.

On this subject by the way it's worth reading yesterday's Deep End blog. The Deep End editor argued that we should be more worried about state subsidies for the rich rather than making the rich pay. I agree with that too.

* Paul Goodman writes at length today about our northern challenge.