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The top rate of tax could be replaced with a mansion tax or a levy on the richest in society if it is scrapped, according to Vince Cable.
The remarks from Vince Cable, the Business, Innovation and Skills secretary, will dismay the Tory right which is putting increasing pressure on the Coalition to scrap the 50p tax rate, the Telegraph reports.
Earlier this week, Cable insisted the tax-free threshold for lower earners should be lifted above £10,000 before the Government considers abolishing the rate.
This would mean that any changes would not happen until after 2015, when the tax-free threshold is due to have risen from the current level of £7,450 to £10,000.
However, yesterday he suggested that the Liberal Democrats recognised that the issue of the top rate of tax will need to be looked at.
Cable told The Daily Telegraph: "My party has always accepted that at some stage it will have to be dealt with."
He said it would have to be replaced by another levy linked to a person's worth or the value of their property, or a 'mansion tax'.
He said: "If the top tax rate was removed it would need to be replaced with something else - primarily something associated with wealth or high value property."
Earlier this year, Nick Clegg, the deputy Prime Minister, signalled the implementation of a tax on expensive homes.
He said the move would be introduced once the economy was recovering and those on lower middle incomes were "breathing more easily".
The income generated by the new tax, generated through changes to the council tax system or stamp duty, would allow the Coalition scrap the 50p rate, which Chancellor George Osborne has described as temporary.
Mr Cable's comments come just days after Danny Alexander, the Lib Dem Chief Secretary to the Treasury, said wanting the cut was "cloud cuckoo land".
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Tax his pension entitlement
"If the top tax rate was removed it would need to be replaced with something else - primarily something associated with wealth or high value property." What about a tax on the 'real' value of public sector pension entitlements? Vincent Cable's entitlement would be worth a tidy sum if properly valued. He could easily pay a tax on this, using his income.
Posted by: Paul 2
Nuts
So Mr Cable would want all those people who have worked hard all their lives and bought and paid for their home, retired on a fixed income but live in a home which may now be worth a lot of money particularly if they live in London - to pay more tax? How will that work then or is he expecting these people to have to sell their home and trade down at a time in their lives when they may not wish to do so?
Posted by: Michael Fallas
He thinks he's Robin Hood
I will not repeat what some of the previous comments have said as I agree entirely with all of them, its the huge incomes that need taxing not peoples homes who may have a small income and the property is the childrens ineheritance,once again its the captive middle classes who would pay, perhaps he should concentrate on all the foreign aid and tax loopholes used by the really rich, and NHS lightbulb costs, before coming after the backbone of this country, like Harry i thought Vince was OK until now perhaps this attitude is why the Libs have not been in power for so long
Posted by: Geoff
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Politics of Envy
There was a time when I thought Vince was on the ball, but now I conclude that this with other recent statements shows that he has completely lost the plot. What is considered a mansion? £750k will get you a 3 bed semi in some areas in London and will probably buy you a castle in Scotland. Indeed I can actually quote from prices of 29th July. £500k will buy you a one bedroom flat in the Barbican and a Grade 2 listed Tudor property in Powys with large grounds bordered by a river (with fishing rights) with 5 beds, 3 baths, 2 receps. a summer house, a barn, gardens and woodland. Many have scrimped over a lifetime, had the good fortune that inflation helped and house prices ballooned, but it doesn’t mean they are rolling in money. The stupid 50p tax was on incomes over £150k. I’m willing to bet that not that many living in even a £1million house in London have that kind of income – particularly if they are now retired. The politics of envy it seems still persists. So figure that one out Vince and put your brain in gear before engaging your mouth.
Posted by: Harry Katz