Tax on pensioners proposed to heal inter-generational divide | 2018-05-09 | daily-sun.com

Tax on pensioners proposed to heal inter-generational divide

BBC     9th May, 2018 10:14:29 printer

Tax on pensioners proposed to heal inter-generational divide

 

A £10,000 payment should be given to the young and pensioners taxed more, a new report into inter-generational fairness in the UK suggests.

 

The research and policy organisation, the Resolution Foundation, says these radical moves are needed to better fund the NHS and maintain social cohesion.

 

Its chairman, Lord Willetts, said the contract between young and old had "broken down".

 

Without action, young people would become "increasingly angry", he said.

 

The Resolution Foundation says its goal is to improve outcomes for people on low and modest incomes.

 

 

Recommendations include:

 

Give £10,000 to all young adults at the age of 25, funded by a new "lifetime receipts tax" that would replace inheritance tax

 

Scrap council tax and replace it with a new property tax targeting wealthier homeowners

Use the proceeds from property tax reform to halve stamp duty for first-time buyers and increase public funding for social care

 

Make earnings of those above state pension age subject to National Insurance contributions

 

Lord Willetts, the former universities minister under David Cameron, argued that young people were being locked out of the housing market and older people were worried about the demands of healthcare.

 

Lord Willetts was speaking as the Resolution Foundation, which he heads, published a report calling for tax changes to help heal the growing economic tensions between the generations.

 

Windfall for young

 

The foundation's Intergenerational Commission report calls for an NHS "levy" of £2.3bn paid for by increased national insurance contributions by those over the age of 65.

 

It says that all young people should receive a £10,000 windfall at the age of 25 to help pay for a deposit on a home, start a business or improve their education or skills.

 

The report proposes that this money be raised by abolishing inheritance tax and replacing it with a lifetime limit for recipients of £125,000 before taxes kick in.

 

The commission estimates this would raise £5bn.

 

"We've got a very serious problem of ensuring there's a fair deal across the generations," Lord Willetts told me.

 

"Older people are worried about a properly funded healthcare system, people in middle age still haven't been able to buy their own home, and for younger people their pay is no better than it was 10 or 15 years ago.

 

"So the different generations in the UK all face different pressures.

 

"But we can tackle them, we can do something about it."

 

The report calls for the scrapping of the council tax system, replacing it with a new property tax which would raise more money from wealthier homeowners.

 

The proceeds would be used to halve stamp duty for first-time buyers.

 

The cross-party commission, which included input from the heads of the CBI business lobby group and the Trades Union Congress, also demands more secure tenancies for renters.

 

Millennials - people born between 1981 and 2000 - are half as likely as baby boomers - born between 1946 and 1965 - to own their own home by 30.

 

Lord Willetts said that a lot of the problems had been created by political inertia by a series of governments.

 


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