Wealth tax ‘could scare off those who pay most’
A WEALTH tax has been ruled out as a way of plugging the black hole in Guernsey’s finances – because of concerns it might scare high net-worth individuals away.
Policy & Resources wants to protect this sector because of its importance to overall tax take.
Its taxation review found that the wealthiest 5% of island residents contributed 26% of tax take, while low and middle-income households, which make up some 60% of the population, together contribute 25%.
Deputy Mark Helyar, the treasury lead on P&R, said that even if just one of the island’s richest residents left the island, it would leave a big dent in public finances.
‘If you look at the projections that have come out of the review, the spread of our citizens in terms of what they earn and what they contribute to tax, there’s only a very small number of people at the high end paying a very, very significant amount of the tax take.
‘A wealth tax is a tax on capital, it’s not a tax on liquidity, so you may be asking people who are retired and living in an open market property, and who don’t have a very substantial income, to find a substantial amount of money because their wealth is high but their liquidity is low.
‘I think it would be very detrimental to the structure of our population at the moment, we would chase away a lot of our high-earners who are paying the majority of the tax that we benefit from.’
