World News Today: Cable hints at property tax rise

Sunday, March 27, 2011

Cable hints at property tax rise

Vince Cable said the wealthy had to pay their fair share

Business Secretary Vince Cable has said tax on high value properties may have to rise - if the 50p tax rate is axed.

He told BBC Radio 5 live he agreed with the chancellor that they would have to move away from the higher tax rate - but any change must be "fair overall".

In opposition he backed a "mansion tax" on properties worth more than £2m.

Chancellor George Osborne said in the Budget that the 50p rate would be temporary but the government would look at tax on "very high value" properties.

Mr Osborne said high personal tax rates "crush enterprise, undermine aspiration and often undermine tax revenues as people avoid them".

He said he agreed with his Labour predecessor Alistair Darling, who introduced the tax rate, that it should be temporary - but now was not the right time to remove it.

Mr Osborne said he had asked HM Revenue and Customs to look at how much it was actually raising, but said the wealthiest should pay more and the government would be "redoubling our efforts to find ways of ensuring that owners of high value property cannot avoid paying their fair share".

Mr Cable said he agreed with the chancellor that the government had to move away from "extremely high rates of tax on income" if it turned out to be "counter-productive", but at a time when people were suffering hardship that tax had a "political purpose".

He told BBC Radio 5's Pienaar's Politics he agreed eventually they would have to move away from the higher rate, but added: "It needs to be a change which is fair overall and does take account of the fact that the wealthy have got to pay their share, and the emphasis may well have to shift from high marginal rates of tax on income which are undesirable, to taxation of wealth, including property, and the chancellor said that, as much as that, in his Budget."

There was a "strong argument" for having a "proper base for taxing property", he said.

"I'm sure that's one of the things we're going to have to look at as we change away from these very high marginal rates."

In 2009, Mr Cable conceded that he should have consulted more widely in his party after his proposal for a 0.5% charge on properties worth more than £1m prompted criticism from some fellow Lib Dem MPs.

The party later raised the threshold to £2m, a policy which was in the Lib Dem manifesto last year.

This article is from the BBC News website. � British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.