Labour refuses to rule out 60% top rate of tax

...as Shadow Chancellor claims UK has ‘a lot to learn’ from Marx

THE Shadow Chancellor yesterday hinted the top rate of tax could be raised to 60 per cent under a Labour government.

John McDonnell also unveiled plans to increase taxes on workers earning more than £80,000 a year.

And he sparked disbelief by suggesting that Britain has ‘a lot to learn’ from Karl Marx, the founding father of communist theory.

Labour has already vowed to reverse cuts to inheritance tax, capital gains tax and corporation tax, as well as extending VAT to private school fees.

Sources said last week that the party was looking at reviving a ‘mansion tax’ on properties worth more than £2million, regardless of their owner’s income.

And on the BBC’s Andrew Marr show yesterday, Mr McDonnell confirmed that the Labour Party would also levy new taxes on workers earning more than £80,000 a year to fund ‘billions of pounds’ of spending, but he claimed the rises would be ‘modest’.

However, he refused to rule out raising the top rate of tax from 45 to 60 per cent – something he advocated in 2012 for those earning more than £100,000.

Mr McDonnell insisted the party would not raise income tax, VAT or national insurance for those on lower wages.

He also said there would be no ‘stealth taxes’, following speculation Labour could extend VAT to new areas such as food.

But his tax proposals sparked a backlash on the Left. Former Labour cabinet minister Alan Johnson said lowering the current £150,000 threshold for top-rate tax would alienate aspirational voters in ‘the kind of seats that we need to win across the country’.

And tax barrister Jolyon Maugham, a former adviser to exLabour leader Ed Miliband, suggested raising the top rate of tax could prompt an exodus of highly skilled workers. He said: ‘if someone decides to move abroad you don’t just lose the extra 10 per cent you were trying to put on them but the 40 per cent they were already paying. i’d be amazed if Labour found even one person with genuine tax policy expertise who thought it a good idea.’

it came as Mr McDonnell told Marr he was inspired by Marx’s Das Kapital, which offered a searing indictment of capitalism.

Asked if he was a Marxist, Mr McDonnell said: ‘okay, no [but] i believe there’s a lot to learn from reading Das Kapital, yes, of course, and that’s been recommended not just by me but many others, mainstream economists as well.’

But last night footage emerged of the Shadow Chancellor at an anti- cuts event in 2013, saying: ‘Look, i’m straight, i’m honest with people: i’m a Marxist.’

international Development Secretary Priti Patel said: ‘The man Jeremy Corbyn wants to make chancellor believes that the nonsensical ideas of Karl Marx – punitive taxes, closing down businesses and the removal of private property – should be at the heart of Britain’s economic policy.’ She said it was ‘just a glimpse of the economic destruction’ that Labour would unleash if it won the general election on June 8.

Former Lib Dem minister Alistair Carmichael said: ‘The Marxism we’re seeing in the Labour Party right now has more in common with Groucho than Karl.’

‘More in common with Groucho than Karl’