Wes Streeting Proposes Aligning Capital Gains and Income Tax

Former Health Secretary Wes Streeting has proposed aligning capital gains tax rates with income tax, framing the policy as a "wealth tax that works" central to his pitch for the Labour leadership. The plan, outlined in a BBC interview, aims to address what Streeting calls an unfair system that currently "penalises work."

Streeting argued the current tax structure is inequitable, citing a family member who works as a cleaner. "She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in," he said. He contends that a pound earned from assets should not be taxed less than a pound earned from labor. His proposal would set capital gains tax at the three income tax rates: 20%, 40%, and 45%. The annual tax-free allowance for capital gains is currently £3,000, with profits above that taxed between 18% and 24%, depending on the taxpayer's income band.

The former cabinet minister estimates the reform could raise up to £12 billion annually, citing calculations by the Centre for the Analysis of Taxation. He vowed to implement the change alongside measures to protect "genuine entrepreneurs," offering them lower capital gains tax rates to...