Tax Resistance Threatens Reeves' Strategy As Patience Wears Thin
Tax resistance is building as households and firms hit their limits. Reeves' strategy risks faltering without a credible quid pro quo. A reset on spending and growth may be unavoidable ... Tax resistance strong, Against unjust demands, Revolt in the fight People can sense the mood shifting, and the term 'tax resistance' is no longer fringe chatter, but a mainstream reaction to a floundering government that keeps reaching for the same economic lever. I see weary households, talk to dubious investors, and support battle-scarred businesses, all asking a very simple question ... Where's the give for all this take?I feel that the next Budget, pushed to late November, only amplifies this sense of drift. After last year's £40bn haul, amid promises of 'no more', the concept feels threadbare as revenues disappoint and spending pressures swell. When taxes climb to a seven-decade high, even modest tweaks feel like sledgehammers. I hear it most starkly from my clients: rising Corporation Tax, stealthy allowance freezes, and sector-specific levies are stacking up. More generally, banks, supermarkets, oil and gas producers, and gambling groups fear another turn of the screw. I'm certainly seeing behaviour change in real time. Pension savers have rushed to take tax-free cash, opting for a smaller, certain benefit over a larger, uncertain one. Families are accelerating lifetime gifts. The message is clear: if the rules keep shifting, people will move faster than the rules can keep up. The property market is a perfect case study!Higher stamp duty at the top end has made a single move cost tens of thousands of pounds, enough to freeze would-be buyers and sellers. A possible 24 per cent Capital Gains Tax on residential gains would likely entrench the logjam, discouraging downsizing and rendering upsizing a fantasy for many. Anyone with an interest in shares and investing will see the gilt market quietly vote with its feet. When 30-year yields lurch higher, it signals concern that taxes alone won't balance the books, and that credible spending choices are way overdue. Businesses also read those signals, and some are already redirecting investments to jurisdictions with clearer incentives and steadier rules. The social licence of “tax now, reform later” has expired. Sustainable revenue requires growth, and growth necessitates stability, investment, and a credible plan to constrain spending over time. Without that, Tax resistance will harden from cautious planning into open avoidance and capital flight. I don't think the path forward is complicated, just difficult!The government must be transparent with voters on its priorities, maintain spending discipline over multiple years, establish investment certainty, and reserve targeted taxes for genuine distortions rather than easy headlines. Do that, and tax resistance fades; fail, and it becomes the defining constraint of this government's economic legacy. Until next time ...
ROGER EDDOWES
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