Tax Peoples Debt says British Economist

Households should pay a new tax on every pound of debt they owe, according to one of Britain’s leading economists.

Martin Weale, director of the National Institute for Economic and Social Research, said the winner of the election should consider the plan in an effort to wean Britain off its reliance on debt. He said that a small annual levy of 1pc on all household debt, including mortgages and credit cards, could help raise £15bn a year – more than would be raised from a 3p increase in the basic rate of income tax.

Although the suggestion will raise eyebrows, Mr Weale runs one of the country’s most respected independent institutions, so may spark speculation that it could be examined by the next government. The Conservatives and Liberal Democrats have both pledged to overhaul the tax system to remove the favourable treatment of debt, although neither has suggested a direct levy on household borrowing.'

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