New report argues the move is necessary to address the rising costs of an older population
Andy Burnham has been urged to raise taxes on pensioners (Image: Getty)
Andy Burnham should shift taxes from workers to pensioners, Labour‘s favourite think tank has urged. The Institute for Public Policy Research (IPPR) insisted the move is needed to address the rising costs of an older population.
A new report calls for National Insurance to be extended to older workers. It also suggests replacing council tax and stamp duty with one proportional property tax and equalising capital gains tax, which is paid on the profit from selling assets such as shares and second homes, with income tax rates.
Ben Ansell, a professor at the University of Oxford and author of the paper, said: “Britain cannot meet the fiscal challenges of the coming decades simply by asking people in work to pay more and relying on another round of stealth taxes.
“Ageing is going to become by far the biggest source of pressure on the public finances.
“Yet our tax system has increasingly shifted responsibility towards younger workers while protecting many of those who have benefited most from decades of rising property and asset wealth.
“Reform is politically difficult, but avoiding it has simply given Britain an ever more complicated tax system.
“We need a new fiscal contract: one that raises the revenue the country will need, shifts more of the burden from work towards wealth and property, and is honest with the public about who pays and why.”
The IPPR, which is influential on Labour policy, said pensioners are among the most tax-advantaged groups, largely because they do not pay National Insurance.
The report argues the “hardest hit” in recent decades have been those in work, “particularly younger people repaying student loans through the tax system”, who also struggle to afford housing comparable to that of their parents and grandparents.
It comes after the Prime Minister earlier this week refused to rule out tax rises in the upcoming Budget.
Mr Burnham told ITV News that he “won’t be unrealistic” about the state of the public finances ahead of the statement on October 28.