Rachel Reeves is driving wealthy away – and YOU will pay their taxes | Personal Finance | Finance

Labour’s mantra under Sir Keir Starmer is that “those with the broadest shoulders” should carry more of the burden. That sounds fair.

The problem is, they already are. The top 1% of earners now pay 30% of all income tax.

Left-wing tax campaigners say that’s only fair. They’re richer, after all. Some experts calculate that the rich pay less tax today than they did in the 1970s.

New analysis by Tax Policy Associates shows that’s wrong. In the 1978/79 tax year, the top 1% paid just 11% of all income tax. That burden has now almost tripled.

Yes, they’ve got the broadest shoulders, but many feel they’ve been pushed too far.

Both the Tories and Labour have taken aim at wealthy Britons, hiking capital gains tax, scrapping inheritance tax breaks on pensions and targeting “non-doms”, foreign nationals living in the UK.

Tax advisers Henley Partners claim 10,800 upped sticks last year as a result. And they’re taking their spending and businesses and tax revenues with them.

Some have questioned that claim but it’s been backed by a second report, that says one in 10 have already packed up with more set to follow.

Andrew Barclay, founder of Land of Opportunity, which commissioned the report, warns: “If 10% of non-doms have already left the UK, that suggests the final numbers will be huge.”

Yet Reeves based her plans on an academic paper that assumed just 0.37% would leave, Barclay warned.

The Centre for Economics and Business Research calculates that if 25% go, the Treasury won’t raise a penny. More, and HMRC will lose tax.

Many Brits assume non-doms don’t pay tax in the UK, but they do. They’re taxed on everything they earn and spend here, just like everyone else.

They only escape UK tax on their overseas income. In return for that exemption, they pay £30,000 a year to HMRC.

As well as driving wealthy foreigners away, attacking non-doms may deter overseas entrepreneurs from setting up shop over here.

Other countries will welcome them with open arms – and their money.

Guess who will make up the shortfall? That’s right, ordinary taxpayers. They’re sitting ducks for Labour’s next tax grab.

Today, Reeves pledged she wouldn’t increase income tax, National Insurance and VAT.

Income tax will rise anyway, because she’s committed to the ongoing Tory freeze on income tax thresholds.

By 2028, the freeze will have dragged 3.2million ultra-low earners over the £12,570 personal allowance and into the income tax net.

A basic-rate taxpayer will pay almost £3,000 more as a result, AJ Bell reckons.

Over the same period, Another 2.1million will be pulled into the higher-rate 40% bracket, frozen at £50,270.

Someone earning £50,000 will pay an extra £15,000 by 2028.

Do they now qualify as super-rich?

Many of these will be hard-pressed pensioners. In a year or two, the new state pension itself could be taxable.

The wealthy can leave if the burden gets too much. Most ordinary taxpayers can’t. They’re sitting ducks and Reeves knows it.