Stealth tax

A stealth tax is a tax levied in such a way that is largely unnoticed, or not recognized as a tax. The phrase was generally used in the United Kingdom by Conservatives to attack the New Labour government's behaviour. It should not be confused with double taxation or privatisation.

On 16 September 1996 the National Association of Pension Funds demanded a reverse to a tax on UK pension funds' dividends. Anne Robinson, their director general said pension funds are being "taxed by stealth".

The exact phrasing stealth tax has been in British political use since 1998 and referred to tax rises that apparently circumvented the 1997 New Labour manifesto commitment that "over the five years of a Labour government ... there will be no increase in the basic or top rates of income tax".

Anne Segall of The Daily Telegraph claimed on 17 January 1998 that, "taxes will rise by £7 billion this year ... as a result of a variety of measures introduced or extended by the previous chancellor Gordon Brown. Mr Brown's 'stealth' taxes are directed mainly at middle-class voters and in particular at middle-class professionals and those with savings".

On October 19, 1998 Francis Maude, then Shadow Chancellor (the opposition finance minister) claimed the Chancellor Gordon Brown was imposing "stealth taxes ... designed to conceal their effect".

Former Prime Minister Tony Blair only made occasional references to stealth taxes, such as on 1 November 2001 in relation to Company Car taxation, 9 November 2000 in relation to Fuel prices and on 21 October 2002 in reference to Pensions.

On 22 May 2001, the expression increasing taxes by stealth was extensively used by former Prime Minister Margaret Thatcher on her address to the Conservative Party's rally in Plymouth.

One example of a stealth tax is in the United Kingdom, where the British Government diverted revenue from the National Lottery to fund public spending.

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