Why are wealth taxes relevant in 2026?

Billionaire wealth in the UK has skyrocketed since 1990. It represented 4% of GDP back then, growing to 22% of GDP in 2026. The trends of rising wealth accumulation for the super-rich and worsening living standards for working families is stark. Consecutive governments have pointed at GDP as proof of economic success and neglected the decline in living standards for the majority. Where families could once live off a single income, families can now struggle with two. Growing anger at the cost-of-living crisis is fuelled by the perception that government is not addressing the root cause – we are not seeing the action that we need. With no political consensus on the root cause and inequality continuing to grow, it is becoming increasingly evident that this Labour government are not equipped to manage this worsening trend.

Where wealth continues to ebb away from families and fall into the pockets of the super-rich, we are almost certainly going to see this inequality trend continue to worsen. The Green Party have gained popularity through the promotion of wealth taxes and we are now seeing Labour leadership hopefuls adopting similar policy ideas to gain support in preparation for their race to Number 10. Wes Streeting’s support for a “wealth tax that works” simply reforms capital gains tax rather than addressing the underlying wealth itself. Regardless of the merits of these specific policies, wealth taxes are now becoming part of the debate; the Liberal Democrats have an opportunity to start owning the narrative with thoughtful economic policy that better promotes fairness in our society.

What could be done?

Where the super-rich choose to accumulate assets over declaring a more realistic personal income, the tax system has become outdated, allowing them to avoid income taxes and benefit from low (or no) rates of tax on their wealth. As a result, they contribute a smaller percentage of their net worth than ordinary working people. A thoughtful wealth tax is an opportunity to close this loophole without ripping up established tax policies. By focusing on both wealth and income, we increase transparency in wealth reporting and reduce the incentives for the super-rich to report their income as wealth. Employed effectively, a wealth tax would share the burden of taxation more fairly across society. The critical message for the electorate is that a more transparent and fairer tax system can address worsening inequality. In the short term, this could provide cost-of-living improvements. In the longer term, it reverses the trend of worsening inequality in our communities that is degrading living standards for so many.

A wealth tax that is values led would close loopholes and would not tolerate the opt-out culture that we have today. The proposed Zucman Tax in France is a shining example whereby the super-rich must pay a minimum 2% rate on their stock of wealth. No ifs, no buts, that is the tax bill that they owe the government. It directly addresses the super-rich by only targeting those with net assets above €100 million. Attempts to move wealth overseas would meet a Wealth Exit Tax. Loopholes are closed with little option but to pay their fair share. Where Streeting can draw criticism from business owners and entrepreneurs who could face higher capital gains tax, the Zucman tax cannot. Positioned effectively, it generates tax revenue from the super wealthy with robust incentives to retain wealth in the UK. The proposition of taxing the super-rich to directly address the cost-of-living crisis is a coherent message that the electorate can throw their support behind.

Why are thoughtful wealth taxes a good fit for the Liberal Democrats?

As a values driven party that promotes equality and liberty, thoughtful wealth taxes are an excellent fit. It’s a coherent message that connects our values to our policy and would almost certainly resonate with the electorate. It directly addresses short term concerns about cost-of-living and promotes a fairer society that demonstrates that the Liberal Democrats can be the trusted party for government. The Green Party lack the coherence in their values to be trusted in this policy area and Labour are offering too little too late. The Liberal Democrats have the opportunity now to own this policy area and represent a wealth tax that offers a fairer future for Britain.

* Tom Walker is a party member from Chippenham. Now working in business, his career has been spent as a leader in the British Army with an education in both Economics and Business.