Tina Bury and Jayne Ozanne want an expert investigation into the idea and an independent analysis carried out of the benefits to the island of new arrivals on the open market.
The late bid to introduce an amendment – because it is late, deputies would have to specifically agree to discuss it during the tax reform debate next week – immediately concerned several figures from the local financial services sector.
‘This is insane,’ said one. ‘Wealth taxes have never worked anywhere – they are always withdrawn as they just don’t work, full stop.’
Another expressed concerns for the open market if such a debate took hold.
‘That would just drive people away and it sends totally the wrong message for our major industry,’ he said.
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Deputies Bury and Ozanne said yesterday that they could not immediately comment on their proposal but the explanatory note to the amendment makes clear that any new taxes would not be introduced as part of the current tax package, and stressed that it was not pre-empting the outcome of any investigation, but that they did want an objective review.
Whenever wealth taxes have been suggested in the past the States have always dismissed them as a destabilising. It has been argued that the wealthiest 5% of the island’s residents already contribute about a quarter of the island’s tax take.
The deputies say that arguments against taxes tend to be more anecdotal than based on facts and evidence.
‘While the policy letter states that capital taxes are out of scope because they may be incompatible with Guernsey’s core economic sectors, particularly financial services, the policy letter does not examine the idea of wealth and asset-based taxes that exist internationally and their possible application in the Bailiwick,’ they said.
‘The amendment would enable evidence-based consideration of whether any such measures could contribute to the island’s long-term fiscal sustainability without adversely affecting its competitiveness, financial services industry or attractiveness to high-net-worth individuals.’
They said that their call for independent analysis of the economic contribution made by high-net-worth individuals new to the island would help to ensure that future policy decisions were grounded in facts. They said that such a review could be carried out alongside a longer-term examination of the island’s tax structure being proposed by Policy & Resources.
Similarly, Deputy David Goy’s idea for a Productivity Incentivisation Tax focuses on untapped wealth, including taxing under-used property and vacant homes, targeting households with high total wealth currently paying very little income tax, and targeted taxes on some luxury assets.
The amendment could figure in the States debate, which begins on Wednesday. A protest ‘strike’ has been called for Market Square from 12-3pm on Sunday.