It’s beyond infuriating.
We’ve waited 14 long years for a so-called centre-left Chancellor, only to find ourselves on the brink of more belt-tightening when we desperately need bold, transformative action. After the havoc of a global pandemic, a bruising cost of living crisis, and a recession that destroyed the livelihoods of millions, Rachel Reeves is already sounding the alarm for further austerity. Instead of rallying for the public investment we so desperately need, she’s searching for corners to cut and taxes to squeeze from the working and middle classes. But let’s be clear: the money to fund our public services is out there. The only thing missing is the political will to seize it.
We’re teetering on the edge of an inequality crisis so severe, it threatens to tear the very fabric of our society apart. The problem is not those on six figure salaries, it’s not even really the millionaires—it’s about the billionaires at the summit, whose wealth allows them to wield power and privilege in ways that are as undemocratic as they are dangerous.
If we don’t embrace radical wealth redistribution, we’re condemning ourselves to a future where the super-rich rule over the rest, unchecked and unchallenged.
In the last few years alone, UK-based billionaires have seen their fortunes soar by 1000%, concentrating economic power in the hands of a microscopic elite. Elon Musk, the world’s richest man, is the poster child for this grotesque disparity. When Musk bought Twitter, he acquired a global loudspeaker to broadcast his toxic, transphobic race-war baiting rhetoric. This is not benign accumulation of wealth; it’s a direct assault on democracy itself. In a country like the UK, where social tensions are simmering at best, Musk’s actions are a recipe for disaster.
And let’s not forget J K Rowling. Her wealth has given her a platform to dismiss the rights of trans people—a group she neither belongs to nor understands.
The influence of billionaires isn’t just a moral abomination. It’s a fundamental threat to the economy. Since the onset of the Covid-19 pandemic, the number of billionaires in the UK rose by 20%, while the rest of us were plunged in to a cost-of-living crisis and the highest tax burden in a generation.
When a handful of individuals control more wealth than millions of citizens combined, they can bend politics and policy to their will, sidelining the needs of the many. This isn’t just wrong – it’s a betrayal of the social contract, a breach of the promise that every person should have a fair shot at success.
The billionaire class doesn’t just hoard wealth, they weaponise it. They use their riches to lobby for tax breaks, deregulation, and policies that entrench their power and rig the system even further in their favour. This isn’t simply an economic issue, it’s a moral crisis. A society that allows such staggering inequality to flourish is one where the social fabric is ripping at the seams, where the chance for upward mobility is little more than a cruel joke.
From a social liberal standpoint, the case for radical wealth redistribution is compelling. Social liberalism is about more than just fairness. It’s about ensuring that every individual has the opportunity to lead a fulfilling life. But how can we claim to believe in equality of opportunity when a child’s future is largely determined by the wealth of their parents? By redistributing wealth, we can finally make sure that every child has the same chance to succeed.
If we fail to act, the divisions in our society will only deepen, fuelling anger and discontent. Radical wealth redistribution isn’t just a matter of economic prudence, it’s essential for building a society where everyone feels valued and included.
And let’s not kid ourselves—this isn’t just about justice; it’s about survival. A fairer distribution of wealth would unleash a wave of creativity and entrepreneurial spirit across the nation, driving economic growth and innovation. When wealth is concentrated, it stagnates, sitting idle in offshore accounts or luxury assets. Redistributing that wealth would put it to work, creating jobs and opportunities that benefit everyone. We need to end the injustice of billionaires across the West having a lower effective tax rate than the working class.
So what do we do? We need bold, decisive action to tackle this billionaire problem head-on:
- A citizen’s inheritance—a substantial £10,000 financial boost for every young adult, funded by an annual 2% wealth tax on billionaires—would break the cycle of intergenerational poverty and give every young person a real chance to invest in their future.
- Universal Basic Income (UBI) would provide a safety net for all citizens, ensuring that everyone can meet their basic needs. Funded by taxing the wealthiest, UBI would reduce poverty, increase economic security, and empower individuals to make choices that improve their quality of life.
- A four-day work week would not only improve work-life balance but also enhance productivity and job satisfaction. By redistributing work more evenly, we could create more job opportunities and reduce unemployment.
- And, of course, the coup de grace: a progressive wealth tax on billionaires that ensures those with the greatest financial resources contribute their fair share to society. The revenue generated could fund public services, infrastructure, and social programs that benefit everyone, not just the elite.
Radical wealth redistribution is a moral imperative for the UK. We can’t afford to let billionaires run roughshod over our democracy while millions struggle to make ends meet. If liberals are serious about maximising freedom and resisting concentrated power, then we must shirk our squeamishness and admit that even the existence of billionaires, in a time of poverty, is a moral failure.
We need bold, transformative action to rebuild a nation that works for everyone. We owe it to ourselves and to future generations to act decisively, to demand a more equitable society where opportunity, fairness, and prosperity are the birthrights of all.
* Chris Whiting has recently rejoined the Liberal Democrats and is a former Communications Officer of the Young Liberals
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21 Comments
The total wealth of UK billionaires is somewhat less than 1000bn.
Wealth tax of 5% per year raises somewhat 50bn. Not nearly enough to pay for all your spending wishes.
Worse many of those assets will be in other tax domains.
Wealth taxes are not easy to collect. The richest billionaires hold much of their wealth offshore; and many move to tax havens. And not just in Jersey, the Isle of Man or Bermuda; 100,000 UK citizens now live in the Gulf states.. Easy to tax immovable property and land; it requires concerted international action to tax other forms in which wealth is held. I have increasing sympathy with the US requirement that US citizens resident abroad must submit tax returns to maintain their citizenship.
The author’s proposals to tax billionaires does nothing to deal with discretionary trusts where, as I have pointed out before, the tax paid to HMRC is just 6% of the trust’s value every 10 years. So the current Duke of Westminster, Hugh Grosvenor, is the beneficiary of a family trust that Bloomberg valued at £9.24 billion in 2023, but in the eyes of the taxman he is a relative pauper because the increase in wealth is retained within the trust rather than being treated as part of his income. And this is just the most extreme example. You can rely on every one of the UK’s billionaires and most of the UK’s multi-millionaires having made use of trusts legally to avoid paying tax.
And why attack JK Rowling specifically – she made her fortune by being a successful author – she didn’t inherit it, like the Duke of Westminster and many others did. A far better target as a self-made billionaire would be Denise Coates, owner of Bet365, who has made her fortune on the backs of poor gamblers.
I have usually argued that liberals tend to respond to injustice by focussing on the redistribution of power and socialists have traditionally started with the redistribution of money. I would like to think that they may however end up on similar terrain albeit via a different route. This can be reflected in some votes in parliament (usually on the losing side) in which members belonging to different parties combine. However the current crises of democracy call for fresh approaches such as those flagged up by Chris Whiting. I no longer feel able to say that if people want to make themselves miserable by having more money than they know what to do with then that’s up to them. Perhaps it never was so but the undermining of real democracy by billionaires/oligarchs is more obvious than ever before. Part of the rot is that politicians gaining power through a reasonably democratic process can be bought by what for those at the very top are .relatively tiny amounts of money. Rupert Murdoch is probably still capable of telling you how it is done!
I’m afraid to my mind, this article reads like the failed politics of envy that you’d expect from the 1970s/80s Labour Party. Yes, we do need to ensure that everyone has the opportunity to achieve a decent standard of living, but liberalism is also about letting people build the lives they want. If some people choose to take immense personal risks to build businesses that provide services to millions of people (or choose to write books that millions of people enjoy) and as a result those people become billionaires, then that is something to be celebrated. If our reaction to people becoming rich is always to raise our hands in horror and seek to take their wealth away, then we destroy the incentive to innovate and with it the very basis of our economic prosperity. Please let’s not go down that path.
There is a separate issue about disinformation etc. on X/Twitter, but that’s an issue of social media regulation, not really to do with Elon Musk’s wealth (the taxation of which is in any case a matter for the US Government, not the UK Government).
” I have increasing sympathy with the US requirement that US citizens resident abroad must submit tax returns to maintain their citizenship.”
That sounds like a good idea for UK citizens too! If they lose the citizenship they shouldn’t be allowed to own property in the UK.
Taxation isn’t just about raising revenue. It can be used to force absentee property owners to do something useful with it instead. Like selling it to someone who might actually want to live in it!
https://www.estateagenttoday.co.uk/features/2024/4/50bn-price-tag-for-londons-empty-homes
Wealth inequality has become a fundamental threat to the fabric of society. The only way this can be addressed is via the taxation of economic rents i.e. land rents, interest on mortgages, monopoly rents on public utilities etc.
As William Wallace notes wealth taxes are not easy to collect. UK wealth is values at about £15 trillion. £5.5 trillion in land and property, £6.5 trillion in pension funds, financial assets £2 trillion and £1.3 trillion in pesonal assets (Cars, works of arts etc).
A lot of the financial assets will be invested in financing mortgages.
We need to tax the income generated from assets – land rents, mortgage interest on land, economic rents from government monopolies granted on utilities and infrastructure etc at near 100% levels. Nothing is produced as a consequence of investing in these assets. Our national income is what we produce. The majority of that national income is extracted by a small rentier class that neither produces the goods and services that make up national income or finance the buildings and equipment used to producte good and services.
Land Value Tax on econmic rents can fund a significant proportion of public services and address what is an increasingly severe threat to democratic government – extreme wealth inequality.
There is a natural tendancy for wealth to accumulate and unless you have a state actively redistributing it, only disasters like war and revolution tend to reduce inequality. The article is quite right to assert that the state needs to be involved in redistribution. Most rich people would agree that it is preferable to the alternatives. Unfortunately, the state that needs to redistribute the wealth of Elon Musk to the poor of the third world does not exist and he and more publicity shy but like minded plutocrats are actively working against any movement in that direction.
Redistribution in one country has to be much more broadly based with the moderately wealthy contributing something. Wealth taxes themselves are difficult to raise especially on the inernationally mobile uber-rich. A good proxy is taxation of income from wealth at the same nominal rate as earned income. Inflation means that the effective rate would be higher. Inheritance tax also needs to be raised and paid by the recipient rather than the donor. A citizens’ inheritance might also work.
UBI doesn’t directly affect wealth much but it does mean having it is less important. getting rid of means testing on wealth would also remove a significant disincentive for those in unstable work to save.
I’m not so keen on enforcing a four day week. For well paid jobs, it’s already a pretty good idea without compulsion. For the those with few skills and especially the endebted, long hours are the only way to accumulate a little wealth.
The proposals in this article would make Briton’s poorer by driving wealthy people out of the UK, as wealth taxes have done for other countries.
It is far better to have a billionaire living in the UK, paying some income and capital gains taxes, and paying VAT on their expenditures, than having that person living overseas and paying no UK taxes.
I wrote about this in 2012 in my piece https://www.mohammedamin.com/Politics/A-land-fit-for-billionaires.html
The newly elected Labour Government is going to eliminate non-domiciled tax treatment for long-term residents. Once fully implemented, it will reduce UK tax revenues, not increase them, as rich non-domiciled people leave the UK.
Very timely and useful debate to start here, Chris – thank you. But as you have only recently rejoined the party, it seems you have not noticed that Conference moved on from endorsing UBI, agreeing in the Spring Conference at York last year to support instead Guaranteed Basic Income. GBI will be based on rising levels of Universal Credit to abolish relative poverty, and I hope we will be pressing it on the new Government.
Party policy may have changed but that does not automatically make UBI a bad idea nor does it mean that means tested benefits can ever abolish relative poverty. There will always be people who don’t fit the test (students, those deemed supported by someone else and those who cannot prove their future earnings) and take up rates will always be much lower than for a universal benefit.
@Joe Bourke: If you tax mortgage interest income at near 100% then no bank would be willing to offer mortgages, and it would quickly become impossible for anyone to buy a home unless they can pay for it all upfront.
And in general it’s not true that nothing is produced from the economic assets you mention (land rents, economic rents etc.): The fact that the owners can make a profit from the rent/income gives them an incentive ensure the assets are efficiently used/improved as appropriate, so they can maximise their earnings. Tax those earnings at near-100% and those vital assets would quickly become neglected/fall into disuse because no-one would have any incentive to maintain them.
Like it or not, if you want prosperity and a functioning economy, you have to let people and companies make profits, and accept that making profits is in general a good thing
Sorry but we’ve heard it all before. Labour first came into power a hundred years, in 1924, with grand plans for a levy on capitalists. It came to nothing, of course. The LibDems are pragmatists not utopian socialists.
Simon R,
wages and profits earned from the production of goods and services including profit and interest derived from the financing of capital goods should be taxed as lightly as possible. Unearned income i.e. what we call economic rents is the extraction of value from national income without any contribution being made to the production of those goods and services.
Thames Water is a case in point. The business was privitised and handed over without any debt. The company has been loaded up with debt to replace its share capital while borrowing was cheap via share buybacks and starved of necessary investment. It now faces bankruptcy and may well need to be bailed out by taxpayers to ensure the maintenance of water services and stop the pollution of the Thames.
Mortgage interest on the land element of property is no different. Interest earned on lending for new construction or the value of existing buildings should be lightly taxed but interest earned from lending for inflated land values should be taxed at near 100% rates. It is that lending that bids up the value of land and allows the extraction of 40% to 50% of the disposable income of wage earners and small business owners by landowners and financiers of mortgages on land.
Making profits is in general a good thing. At the same time you need to ensure that those profits are equitablty distributed and not extracted by a rentier classs. When John Maynard Keynes anticipated the “euthanasia of the rentier” in his 1936 book The General Theory of Employment, Interest and Money, he was referring to a financial class that served no purpose other than to exploit scarce capital for its own benefit. That class has not been euthanised, it is resurgent and more rapacious than Keynes could ever have anticipated in today’s fnancialised economy The rentierization of the United Kingdom economy
Unless we are going to attempt to move away from capitalism altogether a “radical redistribution of wealth” is not feasible for reasons set out by others on this thread. However it must surely be possible to extract a greater contribution from the very wealthy without being too radical about it. Even a very small percentage contributed by the super wealthy would help a lot. This would not affect their lifestyle one iota and is indeed suggested by groupings like “Patriotic Millionaires.”
Yes- a large measure of international co-operation would be needed but let’s get on with that.
USA citizens, wherever they live have to submit an income tax return and they are liable for US income tax. They can reduce their US tax liability if they have paid income tax elsewhere.
A lot of rot is talked about how we would drive rich people away if we dared to insist they paid taxes. If they want to reside in the UK, they have to follow the rules. In the past, when supertax was 98% very few people actually left, so I say bring it on. Rich people grumbled and paid up. If there is a concerted joint effort with the EU or on a wider scale to insist on tax being paid, then the rich will have nowhere to go.
For years, rich Greeks simply didn’t pay tax. Then, during the financial crisis, the left wing government clamped down on these abuses. The New Democracy (basically Conservative) Government has not revoked this. There has been no massive flight of rich Greeks, because, by-en-large, they like living in Greece.
We need root and branch reform of the tax code to end the systematic avoidance and evasion of tax and as a party we need to be saying that tax is necessary to provide the services people want. No more austerity, no more getting the poor to subsidise the rich. If you don’t want to pay UK taxes, go elsewhere and see how you fare when democracies work together to get fair taxation and decent public services.
Jim Radcliffe, the billionaire owner of Manchester United became a tax exile in 2020 moving to Monaco to save an estimated £4 billion in tax.
He now says says he feels unsafe in London …as a result of a rise in crime Sir Jim Ratcliffe says London is ‘not safe’ any more
“We don’t have enough prison space. I mean, this didn’t just happen. We’ve been talking about the prisons being overcrowded for ten years.”
Spot the problem there?
@Joe: You’re correct to distinguish between (a) making a profit by creating goods or providing services, and (b) making a profit by renting out a resource that already exists. And I think there’s a good argument for taxing (b) at a higher rate than (a) – but not ~100% – which would amount to confiscating all profits. Renting out resources carries risk but is still something that we need people to be willing to do, so we must let people make profits from taking the risk.
Besides the distinction between creating and renting isn’t always clear cut. For example a landlord is renting out a resource so presumably counts as (b), but may also invest to make improvements to the property, and (if being ethical) will certainly pay to maintain it. Almost no-one will be willing to do that if you tax them at 100%
Simon R,
On the exanple of a Landlord renting out a property. The rent attributable to land would be taxed at a high rate akin to business rates which would be deducted from business profits before assesing income tax . The effect is to tax land rents at a high level and rents from buildings and other improvements to land at a much lower level.
One of the key tax incentives here would be for landlords to invest in improving properties such that a high proprtion of their income was derived from the quality of the buildings and a lower proprtion from the value of land with prospective tenants willing to offer higher rents for good quality propertioes and lower rents for properties in a poor condition.
Wealth and earned income disparity are two different though equally important issues. We need to tackle both. A wealth tax is well overdue. I suspect many wealthy individuals would support some realignment so that the country benefits from their wealth from where much of their wealth came from. With income we could either cap total income or tax it more aggressively. Details such as practicality, ease of avoidance and justice would determine how each was collected.
A substantial wealth tax is long overdue. Most people understand the injustice of huge wealth being hoarded and passed onto descendants. Much of the benefit of these vast sums is in the creating of it. Once it is earned it is only fair that a proportion is returned to the society from where it came.