Row over claims Rachel Reeves could hike capital gains tax as high as 39%
Your support helps us to tell the storyThis election is still a dead heat, according to most polls. In a fight with such wafer-thin margins, we need reporters on the ground talking to the people Trump and Harris are courting. Your support allows us to keep sending journalists to the story.The Independent is trusted by 27 million Americans from across the entire political spectrum every month. Unlike many other quality news outlets, we choose not to lock you out of our reporting and analysis with paywalls. But quality journalism must still be paid for.Help us keep bring these critical stories to light. Your support makes all the difference.CloseRead moreCloseRachel Reeves is being warned that a massive hike in capital gains tax could endanger her hopes of creating economic growth.It comes as a row has broken out over claims that the chancellor has asked Treasury officials to model capital gains tax rates of 39 per cent and 33 per cent, well above the second home rate of 24 per cent.While sources close to Ms Reeves have tried to dismiss Budget speculation and allegations of disarray, the concerns have dropped at a time of intense pressure for the chancellor and Sir Keir Starmer. It follows:The Institute for Fiscal Studies warning that she will need to raise £25bn in extra taxes to meet Labour’s spending commitmentsLabour support dropping to less than 30 per cent in Techne UK’s weekly tracker poll for the first time in more than two and a half years as voters turn their backs on the new governmentStarmer repeatedly refusing to rule out a hike on employer contributions to national insurance – a move critics believe will destroy jobsPersistent question marks over Labour plans to tax non-doms and add VAT to private school fees.Criticism that Reeves should have held her first Budget soonerThe row over capital gains was broken in The Guardian, which claimed to have seen papers on modelling requested by Ms Reeves on an increase of up to 39 per cent.A source close to the chancellor dismissed the story and denied the government was in “disarray” over its tax plans, adding that they would “not be drawn on Budget speculation”.But with the Budget set for 30 October, time is running out for Ms Reeves to close a £25bn gap in her spending commitments and available financing identified by the Institute for Fiscal Studies (IFS). This is on top of the £22bn “black hole” that Ms Reeves claims to have been left by the Tory government.The IFS has speculated Ms Reeves might try to change her fiscal rules to loosen up her ability to borrow but its director Paul Johnson warned “this could spook the markets”.Starmer has promised sustained economic growth and stability More