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Jeremy Corbyn hints at launch of new party as leftwing alternative to Labour (www.theguardian.com)

submitted 5 days ago by [email protected] to c/[email protected]

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Jeremy Corbyn has hinted he could launch a political party alongside other leftwing independent MPs in an attempt to offer “an alternative” to Labour, before the next general election.

Speaking on ITV’s Peston programme, the former Labour leader confirmed discussions were under way among the Independent Alliance group of MPs that he co-founded last year.

Asked directly whether they were preparing to form a new party, Corbyn did not rule it out. “That grouping [of independents] will come together, there will be an alternative,” he said.

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[–] [email protected] 4 points 4 days ago (1 children)

I mean their headline policy rn is a wealth tax which seems pretty popular

[–] [email protected] 5 points 4 days ago

Yes the concept of a wealth tax is indeed popular in the UK right now, but the challenge as with similar taxes that target the wealthy (like capital gains taxes) is that there are so many loopholes that implementing it to be effective is really tough. An example:

a high net worth individual owns a company worth £100m. what tax should she pay? if it’s a 1% wealth tax, how does that tax get collected? does she have to sell some of the business to the state each year for zero cost? does she have to find another investor to buy some of the business and pay that out to the government?
the business has a bad year and is now only worth £80m. does the owner get a £20m tax break now? should the treasury refund the £1m?
the business owner goes to the bank and takes a loan of £50m with the business as security. what tax is due now? the owner can use the £50m for whatever she wants, but taxes are not due on loans.
she uses the £50m to buy a large amount of property abroad as an investment. what tax is due on those next year? does she have to sell a property every year to pay the wealth tax?
finally, the business owner decides to take a stake in a large overseas renewable energy company and buys a 40% holding worth £10m. what tax is due on that holding and how is it collected?

most wealthy individuals have very little in the bank, and their wealth is based on notional ownership of valuable assets like companies. this is just one example of where it will be very difficult to implement a tax system that doesn’t cause business owners to take their money elsewhere to invest, or on the other hand to have endless court battles to force them to sell assets at some value to pay a tax bill.