Wes Streeting has put forward introducing a wealth tax to raise £12billion a year as part of his leadership pitch.
The proposal, donned by the former Health Secretary as a “wealth tax that works” involves equalising capital gains tax with income tax.
He intends, if he became Prime Minister, to address the taxation system which currently “penalises work” and would stimulate investment through lower capital gains tax rates to “genuine” entrepreneurs, reports the BBC.
Whilst Mr Streeting has not launched a formal leadership challenge to Sir Keir Starmer, he has said he would enter any potential contest.
He said: “It was clear that if we’d been plunged straight into a leadership contest by me or for that matter anyone else, I think it would have been seen as a deliberate attempt to get ahead of Andy Burnham’s potential return.”
Andy Burnham is approaching his first hurdle of his potential leadership bid, as he needs to first become an MP.
The opportunity presented itself to the Greater Manchester mayor last week as Josh Simons decided to stand down from his Makerfield seat.
A win for Mr Burnham in Makerfield would enable him to launch a leadership campaign for leader of the Labour Party and ultimately, Prime Minister.
Wes Streeting has already begun drawing up policy plans if he succeeds to role as Prime Minister
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Mr Streeting’s proposal centres on capital gains tax (CGT), a levy charged on the profit made from selling an asset such as a property.
The annual tax-free allowance currently stands at £3,000, with anything above that taxed at rates determined by the individual’s income band.
Higher and additional rate taxpayers currently pay 24 per cent on gains in the current financial year.
The former Health Secretary is proposing that CGT rates should be aligned with the three bands of income tax – 20, 40 and 45 per cent, with a person’s band calculated by combining their income and profits from assets.
Andy Burnham continues to campaign in Makerfield, the first hurdle of his leadership bid
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He is also calling for the closure of loopholes that allow individuals to disguise income from work as capital gains, while offering lower CGT rates to entrepreneurs who take risks building companies.
A report by the Centre for the Analysis of Taxation in 2024 estimated that reforming CGT in this way could raise £14billion.
The found of Tax Policy Associates, a tax and legal policy think tank, Dan Neidle, said the former Health Secretary had submitted a “good proposal”.
Writing on X, he said: “Stunned, appalled, shocked etc. to see actual tax reform from a politician.
“This from Wes Streeting today. A thread on why capital gains tax is broken. It’s too low AND too high, and why this is a good proposal.”
Mr Streeting has also made his position on Brexit clear, after last week saying it was a “catastrophic mistake” to leave the EU.
He also said the UK should “one day” return to the bloc.
However, he caveated his position later, saying “in order to rejoin, there’s something fundamental that would have to be true, which is, it would have to be the settled will of the country.”
Mr Burnham U-turned on his position on Brexit, previously conveying a similar argument to Mr Streeting, but backpedaled earlier this week saying Britain would be caught in “a permanent rut if we’re just constantly arguing” on the matter.
In 2016, 66 per cent of voters in Makerfield backed Brexit.
Mr Streeting will have to launch a leadership challenge first before implementing any changes to fiscal policy.
Under Labour’s rules, he would need the support of 80 other Labour MPs to trigger a leadership contest.