In ditching a wealth tax, Labour is rejecting growth and embracing bad economics | Josh Ryan-Collins

The shadow chancellor, Rachel Reeves, has tied her party's hands and placed it on the wrong side of the argument

Labour's shadow chancellor, Rachel Reeves, confirmed last weekend what many progressives have long feared: the party has no serious plans for reforming Britain's regressive taxation system. There will be no new property taxes or wealth tax. Nor will tax rates on capital gains - unearned income from increases in the value of property or financial assets - be raised to match those on wages.

The politics of maintaining the tax status quo can be debated. History suggests that Britain's swing voters in marginal constituencies may be particularly averse to tax rises or reforms. But the economics of this stance are unambiguously flawed, and here Labour is taking an almighty gamble. For without major tax rises and reforms, it is impossible to see how Labour will generate the levels of growth it has made one of its central missions when in government.

Reeves asserted: I don't see the way to prosperity as being through taxation." This would appear an implicit backing for trickle-down" economics: encourage the wealth creators" by keeping taxes low and the cake will get bigger for everyone. This central tenet of neoliberalism has been thoroughly discredited. There is no evidence that the reductions in taxation on the rich that have proliferated over the past half century have led to higher rates of growth; rather, they have simply increased inequality.

Josh Ryan-Collins is associate professor of economics and finance at the UCL Institute for Innovation and Public Purpose