Britain targets the wealthy as it hikes taxes by $52 billion

The United Kingdom plans to raise taxes by £40 billion ($52 billion) as part of efforts to stabilize its finances by targeting higher earners, wealthy foreigners, and businesses. The tax increases, expected to generate £41.5 billion ($54 billion) annually by the end of the decade, will elevate the tax burden to a record 38% of GDP. The government aims to restore stability to public finances and rebuild public services, addressing what is described as a legacy of economic mismanagement and inadequate governmental spending.

Higher earners will face new taxes on inherited pensions and increased capital gains tax on profits from selling investments. The move is seen as a negative for investors, potentially deterring investment further in an already tepid market. Plans to abolish the non-domiciled tax regime have been confirmed, alongside the introduction of a new tax system for individuals living in the UK claiming residence abroad, anticipated to raise £12.7 billion ($16.5 billion) over five years.

Tax increases include duties on private jet travel and removing tax reliefs for private schools. Employers will also see higher National Insurance contributions, expected to raise £25 billion ($33 billion) annually. There's concern this could impact business confidence and economic growth, although infrastructure and R&D investment may improve long-term growth prospects. Plans to increase public investment by over £100 billion ($130 billion) include a National Wealth Fund investment in future industries, potentially boosting the economy in the near term.