He called for a “wealth tax that works”, adding it is estimated his proposal could raise £12 billion a year. While many of the country’s highest earners would likely be hit by the tax, others could also be affected. So what do you think? Should a new wealth tax be created for the UK’s highest earners?
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Capital gains tax is a levy on the profits made after selling investments or assets, such as second homes or shares.
The annual amount of profit taxpayers can make before owing tax is £3,000, with anything above this taxed between 18% and 24%.
Mr Streeting is proposing capital gains tax rates are aligned with the three bands of income tax rate — 20%, 40% and 45%.
Under the plans, a person’s capital gains tax would be worked out by adding up their income and profits from assets.
Mr Streeting told the BBC the reforms would be brought in alongside measures to protect “genuine” entrepreneurs — with lower capital gains tax rates for those taking risks building companies — and long-term investment to boost economic growth.
He is also proposing closing loopholes that he claims people use to disguise income from work as capital gains, such as establishing personal service companies or taking pay in shares.
Setting out why he thinks the current system is not right, Mr Streeting said: “A member of my family is a cleaner in Lancashire. She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in.
“She slogs her guts out, he puts in far less effort, yet the state rewards him more than her.
“And we wonder why people are angry.
“The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works.
“A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work.”
He called on Sir Keir to stand down as he resigned from Cabinet last week following Labour’s disastrous performance in the local elections.