The Centre for Policy Studies has today launched an attack on the Coalition's plans to increase Capital Gains Tax. The CPS has published polling which shows public unease about the plans and Lord Saatchi – former Tory Chairman and now Chairman of the CPS – has written for The Telegraph, saying that CGT undermines the habits of independence:
"The state is now warning us all not to be dependent on it for old age, because it cannot afford to look after us. That means you are encouraged to pay for your retirement yourself. But how? If you save money in a bank, you receive interest rates of 0.5 per cent, before tax. And now, if you make an investment in property or shares, half of the gain will be taken in CGT. People's savings, made with the best intentions, could have halved in value overnight with no warning. We will be penalising those who have done their best to look after their families and their futures, taking them back to being dependent on the state."
Lord Saatchi's full article is here.
CPS also commissioned ComRes to investigate the popularity of the CGT move. Key findings:
- Two thirds of people (64%) agree that it would be wrong for the Conservative party to double the rate of Capital Gains Tax when this was not in their manifesto. 31% of people disagree.
- 68% of people who voted Conservative in the general election last month agree with this statement, compared to 64% of people who voted Labour and 63% who voted Liberal Democrat.
- Three quarters of people (77%) agree that it should be an explicit policy aim of the government to minimise the tax burden on people’s long terms savings and investments.
- Three quarters (74%) of people agree that investments held by individuals over the long term should be taxed at a lower rate than those held for short term gains, 21% disagree.