The debate around the cost of long-term care and the outcry over the increase in contributions to national insurance has led to the issue of wealth tax returning to the political agenda.
One of the best known of these is the inheritance tax. In recent years, the Conservatives have strongly opposed the tax increase, but could they change their mind?
There are two main reasons the government may consider changing inheritance tax: economic reason and political reason.
The government cannot continue to borrow, but it still has to raise funds to deal with the many problems facing the country. That’s why the prime minister broke a manifesto promise to tackle the covid backlog and try to fix social care.
There is also a political risk that Labor will gain an advantage over the Tories on wealth taxation if that resonates with the public. There is considerable dissatisfaction with the recent increase in national insurance contributions, as it negatively affects low-paid people.
The public accounts committee said in a report released in July that the taxpayer would be exposed to “significant financial risks for decades to come”, so an increase in wealth tax to some extent is a distinct possibility.
Would changing inheritance tax be the right thing to do?