Treasury officials are warning that a Labour tax rise on ‘non-doms’, far from raising more cash, will actually cost money instead. The Government is on a very steep learning curve that punishing taxes don’t work, says Matthew Lynn in the Telegraph.
It was going to pay for universal breakfast clubs in schools, for better hospitals, and more dental treatment on the NHS.
In the run-up to the election campaign, we heard a great deal from the Labour Party about all the extra services that would be paid for with its clampdown on “non-doms”, the small group of wealthy foreigners who pay less tax than the rest of us.
And yet, we have now learnt that Treasury officials are warning that the extra tax, far from raising more cash, will actually cost money instead. In reality, the Government is on a very steep learning curve, and it is about to discover that class war, and punishing taxes, don’t work.
Its non-dom policy may appear a small tweak, but it’s turning into a catastrophe for the British economy – and one that will leave us all worse off.
It would be hard to think of a more spectacular own-goal, so early into the life of a new Government. A clampdown on non-doms was a centrepiece of Labour’s campaign for power, with every shadow minister promising an endless series of freebies that would be seemingly paid for with extra taxes on U.K. residents whose permanent homes are overseas.
Read more: Labour Tax Rise Set to Lose Money as Millionaires Flee Britain