We are at a crossroads.
Trust in politics is low, and people are right to feel let down. The economy works beautifully for those at the top and barely at all for everyone else. Across the West, that frustration is being picked up by people who offer someone to blame rather than something to fix.
Liberals can offer something better. It’s in our DNA, but sometimes we get confused about what liberalism is and fail to make the case.
So let’s say it plainly. Liberalism has one founding fight, and we have fought it in every century – the fight against power piled up in too few hands. We took on kings. We took on the established church. We broke up monopolies and old boys’ networks. Wherever power gathered in a small group, liberals were the ones who said: spread it out.
Now look at where power is gathering today.
Since 1989, the wealth of the 200 richest families in Britain has grown from £42 billion to £711 billion. Over the very same years, the public wealth of the country fell from a positive £337 billion to minus £1 trillion. Their fortunes grew more than three times as fast as the economy as a whole. That is not a story about clever people doing well. It is a story about power collecting in fewer and fewer hands while the rest of the country goes backwards. A liberal who shrugs at that has forgotten what liberalism is.
This is why a wealth tax is not a borrowed socialist idea. It is a liberal one. Free markets need power to be spread out. When wealth piles up at the top it stops being money and starts being influence: over the press, over politics, over the rules the rest of us have to live by. Concentrated wealth is bad for markets, bad for democracy, and bad for the simple liberal promise that where you end up should depend on what you do, not on who your grandparents were.
This is the bit that everyone knows but the mainstream parties rarely say: The very richest can end up paying a smaller share than the people who clean their homes. This is not a free market rewarding effort. This is a system tilted towards those who already have the most.
A small tax on very large fortunes would begin to put that right. Something like a penny or two in the pound, each year, on wealth above ten million pounds. It would touch only a few thousand people. It would raise more than ten billion pounds a year, real money for the things we all rely on. And it would start, gently, to turn the tide on a forty-year drift towards the top.
Now, you will be told it cannot be done.
You will hear a lot of clever, careful, reasonable-sounding objections from nice people. Be a little suspicious of any argument that, step by careful step, always arrives at exactly the same place: leave the people at the very top precisely as they are.
They will say the rich will simply leave. But you cannot pack a London street into a suitcase, and most great fortunes are tied up in land, homes and businesses that trade here. We can also treat someone who has lived here for years as a resident for tax for years after they go.
They will say it is too hard to work out what people own. Shares and bonds are valued every single day. The harder cases, a private firm or a painting, can be handled with sensible rules and by letting people pay over time or valuing it at the point of sale.
They will say it raises too little to bother with. More than ten billion a year is not too little. And the money was never the whole point. The point is the power.
They will say it has been tried before and dropped. The old versions were badly built. They set the bar too low, so they hit the wrong people, and they were so full of holes that the genuinely rich slipped straight through. We know how to build it better now. So let us build it clean: a high starting point, a low rate, and no exemptions.
And some will say, very reasonably, tax them another way instead. We can certainly reform other taxes too. But most of those routes miss the shares and the companies where the biggest fortunes actually sit. They ask the comfortable middle to pay a bit more while leaving the very top largely untouched. That is not the same thing at all.
This is the opportunity in front of us. This is the crossroads.
Britain could be the country that shows this can be done. That a free, open, enterprising economy can also be a fair one. That you can take on concentrated power without tearing down liberty, and come out stronger for it.
This is a liberal example worth setting. Let’s set it.
* Tom Reeve is a Liberal Democrat councillor in Kingston upon Thames
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40 Comments
Brilliant piece. It’s time for mainstream parties to stop shrugging at the staggering wealth concentration of the last 40 years.
“The economy works beautifully for those at the top and barely at all for everyone else”
You know this is a complete exaggeration. The vast majority of our population enjoys a living standard far higher than a generation ago and far higher than their grandparents enjoyed. Though part of our improved living standards is due to a higher rate of the population being economically active due to far less ‘stay at home mum’s’ than was the case a few generations ago, there is no doubt that growing GDP per capita over time has contributed to much higher living standards today.
None of this is an argument against a wealth tax – which I support – but we do not have to exaggerate to make our case.
With great respect, i remember when Labour clobbered the country for tax in the 1970s. The aim of a wealth tax is an honourable one but it reeks of socialism and class war. We cannot make the rich poor by making the poor rich. Also we need somehow to keep the enterpreneurs and those who create wealth, otherwise they will leave our shores. When a government practices envy and class war as socialism does, then it is the rest of us who get clobbered. Labour favours spending on state welfare benefits over law and order and national security.
Thanks Jana and David for your comments.
@Jana – if the purpose of an economy is to spread the benefits of economic growth fairly among the populace according to merit and effort (which I would argue it is), how do you square this with the rapidly widening gulf in income and wealth distribution? If the purpose of an economy is not to do that, then what is the incentive for those at the bottom to remain engaged in the economy, democracy and even society itself?
@David – you offer a false choice. No one is talking about making the rich poor. That is a gross simplification of the wealth tax argument – a straw man argument if you will. The purpose is to slow the rapidly growing gulf between the wealthiest and the rest of the population to ensure that the benefits of economic growth accrue to all members of society, not just those who are blessed to have acquired large quantities of assets.
@David – Granted, by 1979 the “progressive” nature of the income tax system had become ridiculous. The top rate of income tax was 83% and you had an “investment income surcharge” of 15% on top of that. But the top rate of income tax remained at 60% until 1989 without undue whining from the well-off.
There is a great deal which could be done at a stroke to make the income tax system more progressive. Top rate to 60% on incomes over, say £250,000. Restore the “investment income surcharge” but call it what it really was – a tax on unearned income. Why should the money you get by sitting on your backside be taxed more favourably than the money you earn by working for it?
Decoupling CGT and income tax rates was insane and should be reversed. As I recall, that was a particular preference of David Laws, and one reason for him being ruthlessly outed back in 2010 was a warning shot across the bows.
The United Kingdom used to be one of the most equal countries in Europe; it’s now one of the most unequal, and I have no doubt whatever that it is that inequality which fuels a lot of the anger we are seeing.
The pat slogan, by the way, is “we cannot make the poor rich by making the rich poor”. And it’s empty words either way. A better slogan, to a liberal at any rate, is “Liberte, Egalite, Fraternite” – and it isn’t improved by turning it into “Liberte, Fraternite, Don’t-Touch-The-Hedgies”
“Over the very same years, the public wealth of the country fell from a positive £337 billion to minus £1 trillion.” This is obviously nonsense
“That is not a story about clever people doing well.”
actually the link you give shows it is : “When the rich list was first published in 1989, The Queen sat at the top of the list. Today, The King has been pushed down to 258th place, as business owners, aristocrats, celebrities, and others have accumulated vast and unimaginable fortunes.”
Its not inheritted fortunes – its people creating bsuinesses
” how do you square this with the rapidly widening gulf in income and wealth distribution? ” Income distribition hasnt chnaged much for decades https://ifs.org.uk/articles/income-and-wealth-inequality-explained-5-charts
Dan Neidle has explained why wealth taxes dont work
https://taxpolicy.org.uk/2025/07/22/uk-wealth-tax-anti-growth/
“If the purpose of an economy is not to do that, then what is the incentive for those at the bottom to remain engaged in the economy, democracy and even society itself.”
While there is a group of individuals ‘at the bottom’ at any point in time, there is huge turnover in the group. Some individuals drop into the group for a variety of reasons while others are able to rise from the group as their personal circumstances change. There is no doubt that government has a role to play in providing ‘ladders for people to climb’, be that support to find work, better mental health support, educational and training opportunities etc. It also needs a benefits system that does not, in itself, become a disincentive to taking advantage of ‘ladders’ that are provided.
@Simon – I think you should also note that Dan Neidle goes a long way beyond the “oh, we can’t possibly touch the obscenely wealthy” position. He specifically argues for the reform of land tax, capital gains tax, and inheritance tax and says in terms “The UK needs tax reform across a swathe of existing taxes… Better‑targeted reforms can tax wealth more effectively with far less collateral damage”.
If I sound a bit impatient with the “can’t tax the wealth creators, they’ll have no incentive any more” argument, it’s because I am. Quite a lot of years ago, I had the misfortune to try a matrimonial finance case. Wife was on income support and working the few hours the rules allowed. If she increased her hours, her additional earnings would have been deducted in full from her benefit with no allowance for childcare or travel costs, actually leaving her worse off. For some reason an effective marginal rate of over 100% is absolutely fine when it applies to people who actually work, but anything over 40% applied to someone shoving figures around is an outrage.
I’m not convinced by heavy targeting of the most wealthy – and 1-2% a year is heavy, no matter how we phrase it. For example as one comparison, an investment in residential property is likely to returning a top line return on investment of perhaps 4% to 8% – depending on location. I do not see this minimising the amount of hissing from the golden goose.
As I see it, the successful wealth taxes are at a limited rate and to a very wide base. I’d cite Switzerland as a good example, and Mons. Hollande’s attempt in France as a failure. I’d would hope for a wealth tax to be more along Swiss lines, where the rate is 0.1% to 1%, should we wish to argue for one.
For the UK, I think the place to start is perhaps the Proportional Property Tax as a replacement for Council Tax, which is essentially a wealth tax and would reduce the level of charge for around 80% of the population, and also help with a 25-year late rebalancing towards he wealthier areas of the country.
A very similar argument to that set forth by Phillip Inman in the Guardian the other day.
https://www.theguardian.com/politics/2026/jun/13/labour-introduce-wealth-tax-case-never-been-stronger
Both certainly have a lot to be said for them, although I’d increase the rate to 5% for billionaires.
Tom, we have the solution, we have done for a long time, we even sing about it every conference. Housing is one of the biggest causes of the cost of living crisis, if not the biggest and as you say you can’t pack a London street in a suitcase. This is why LVT has long been the right answer, but also many of the clever arguments against a generic wealth tax rather than taxes on wealth are right as housing/land is an asset type which depreciating the value of a bit would help the economy.
Thanks Simon.
On public net worth: that’s the ONS’s own Public Sector Net Worth measure, currently negative by around £700 billion, and well over £1.7 trillion once unfunded public sector pensions are counted. Not nonsense. It is the official figure.
“Clever people”: The concern is the concentration, not the cleverness. A self-made fortune is still a concentration of power, and much of that list is asset appreciation rather than the business-building you describe.
Income: you are right that income inequality has been broadly flat since the early 1990s, but I was writing about wealth inequality. And the piece you linked is mostly about why income is the wrong thing to look at. It shows that wealth has grown far faster than wages, so the gap between people who own assets and people who do not has widened sharply. In 2008 it took ten years of a typical salary to climb from the middle of the wealth ladder to the top. By 2018 it took almost sixteen. The article ends by warning that stagnant pay and rising asset prices have set up “a bleak picture for the prospects of future generations.”
Neidle: his case is about revenue and administration, not about whether to act on concentration, which he himself calls a coherent aim. My column already grants a wealth tax would not fund the state alone. The point was always who holds the wealth, and who has paid for everything else.
Jana expectations play a large part in this, if people feel there is a fair route to social mobility that is incentive to engage, and also if one that is widely advertised doesn’t work out, that is incentive to disengage and/or go for a more radical option.
Can we not encourage the wealth to stop disappearing to The Canary Islands etc by giving incentives for it to stay in the UK. A tax system that encourages the money to be invested in the UK to produce goods,homes etc. 18th century entreprenours grew the country by investing in it. Titus Salt and Saltaire for one. Likewise in the USA building Universities, Hospitals etc.
Just wanted reiterate that the case for a wealth tax is less about the money and more about correcting the concentration of power. Redistribution of power is a very liberal cause. It is what we do.
And the case for doing it is in the figures themselves, ie the year on year growth of very large fortunes (fortunes in excess of £10m, not someone whose main asset is a nice house). If 1% or 2% a year puts the brakes on that, then it has achieved its goal.
If you want to tax wealth you should be taxing Land. It cannot be moved offshore or hidden, it is much easier to appraise than someone’s private fortune, and it is morally and economically defensible as the value of a location is driven by the community and infrastructure around it rather than any personal labour. A Land Value Tax is the most effective and fairest method of wealth redistribution, and always has been, which is why it was at the heart of Lloyd George’s 1909 People’s Budget.
The case for a wealth tax to help meet the deficit in public finances is very strong to me. To those who worry about wealthy people taking their money abroad I would suggest that we do what the US does and make it a condition of retaining British citizenship and right to return here that you must continue to pay UK tax subject to reasonable deductions for tax paid in other countries.
Tom’s framing here is exactly right and cuts through what often gets lost in these debates: this is fundamentally about the concentration of power, not just the raising of revenue.
A Just Society has been developing a detailed policy proposal along these lines. It proposes a progressive three-tier annual levy starting at 1% on wealth between £5m and £10m, rising to 3% on wealth above £1 billion, with a national wealth register, robust exit measures, and at least half of receipts earmarked for child poverty, care, and the green transition. You can read the full proposal at ajustsociety.uk/policy/limitarianism.
On the Neidle point raised by Simon: it’s worth reading what Neidle actually argues. He doesn’t oppose taxing wealth more effectively; he argues for doing it through reformed CGT, IHT, and land taxation rather than a standalone annual levy. That’s a legitimate debate about design, not a case for leaving extreme wealth untouched. Tom’s response to this is sound.
The real weakness of the “tax it another way” argument, as Tom notes, is that most alternative routes miss the accumulated stock entirely. They catch flows, not fortunes. An annual levy on net wealth is the only instrument that directly addresses what has actually happened over the past four decades.
The liberal case for this has been made before, and it needs to be made again and again until it lands.
@Tom,
I’d say that the wealth tax is more about money than some on the left would allow. I’m thinking of those in the MMT camp who say things like “we don’t need the money of the wealthy to be able to spend”.
This might be true on one level but it ignores the fact that those with money are always looking to use what they have to make more in a risk free way, rather than earn more by taking a risk and developing something useful.
They have been busy selling the idea that Governments need their money by way of PFI schemes and privatisations etc. Unfortunately this Labour government seems to have bought it.
https://www.theguardian.com/commentisfree/article/2024/jul/02/labour-plans-britain-private-finance-blackrock?CMP=share_btn_url
Really insightful – couldn’t agree more.
There are two arguments here, a moral one and an economic one. One speaks to our values, the other speaks directly to the electorate in addressing their concern about cost of living. This gives the Liberal Democrats the opportunity to lead in this policy area.
The critical risk is that ‘wealth taxes’ are easy for the powerful to dismiss and for the electorate to misinterpret as radical left wing policies. Both need to be addressed for this to cut through and remain a credible offering. Firstly, this tax must target the super-rich. Secondly, it must target the underlying wealth. Coupled together, we’re not inadvertently targeting those have made sacrifices to be home-owners or hold more generous pensions. This must be about fairness and turning the tide on inequality.
Our focus should be on ensuring that the lowest living standards in society are sufficient for flourishing, and tax should be levied for that purpose. Imbalances of power should be sorted through regulation and by encouraging a more engaged and therefore more actively participatory democracy. Inequality is often the result of a policy failure (e.g. an exploitative system) that should be corrected, but you can focus heavily on inequality and still have people with a poor quality of life which means it is not a good “guiding star.”
@Abrial, there’s something right in this. A society where everyone has poor but equal living standards would be a strange kind of success, and focusing purely on relative inequality can obscure whether people’s actual lives are improving. The floor matters enormously.
But I’d push back on the implied separation between the two goals. In A Just Society’s framework, the wealth levy and a Universal Basic Income and Services guarantee work together precisely because they address different parts of the same problem. UBI/UBS sets and raises the floor, providing everyone with a secure income and access to essentials as a matter of right rather than charity. The wealth levy recycles resources from extreme accumulation back into the common pot that funds it. You don’t have to choose between “ensure sufficiency” and “address concentration” – they’re the same project approached from opposite ends.
On power: regulation matters, but it operates within political systems already shaped by the very wealth concentration you’re trying to regulate. That’s not an argument against regulation – it’s an argument for not relying on it alone.
[AJS policy on UBI and Universal Basic Services: ajustsociety.uk/policy/universal-basic-income-and-services]
@Tanya Park I think the UBI thing doesn’t disagree with what I said at all, it is the levying of tax for the explicit purpose of ensuring a satisfactory minimum living standard as opposed to taxation because someone has “too much” wealth.
@Abrial, I’d say both motives are valid and work together rather than one displacing the other. Taxing extreme wealth to fund a sufficient floor for everyone is the mechanism. But the concentration of wealth is also a problem in its own right — for democratic accountability, for market fairness, for the basic liberal principle that where you end up shouldn’t be determined by who your grandparents were. A policy that addresses both simultaneously isn’t confused about its purpose, it’s doing two necessary things at once.
@Tanya Park I think the difference here is I don’t see the second purpose as necessary, as long as we have sorted out the problem of deprivation and we have properly protected our democracy why should we tax beyond what is needed for that just for the sake of it. This would definitely require a far more radical approach to regulation than what we have now, (something like only voters can contribute to political causes and even then capped at some relatively low percentage ~10% of the median income), but I think it is important that the government should tax in order to do things. This is also necessary for political consensus right now given for the first time in a long time lowering tax and cutting spending is beating raising tax and increasing spending, so focusing on what tax is being spent on is central to winning that argument.
There is some right old nonsense talked about tax rates. In my youth some people could pay up to 98% on their income above a threshold. People talked about leaving, but few ever did. Mostly they just paid up. It is a myth spread by the uberwealthy through their newspapers and other media.
The US system has much to commend it and we should commit to introduce it ASAP. If you’re a UK citizen you pay UK taxes, wherever you live, wherever you keep your money, less any taxes you can prove you paid elsewhere. So we would kill in one stroke the tax havens and stop the wealthy from not contributing to services in the UK.
It is another myth that wealth taxation is too difficult. And as Tom says, it’s hardly peanuts to collect £10 billion a year from people who can afford it.
I don’t disagree with the need for the tax reforms suggested by others on this thread, but they don’t mitigate against a wealth tax, they just add to the government take that is badly needed for the services we all want.
Thank you, all. This is the debate I hoped for, and the sharpest challenges have come from people who want the same things I do.
The thread running through most of the objections is “tax wealth another way.” Matt makes the case for a proportional property tax, Abrial for land value tax, others for reformed CGT and inheritance tax, and there is a great deal in all of it. I am a localist and a fan of proportional property tax, so you will not find me arguing against them. But they are not substitutes for what I proposed. They mostly tax wealth as it moves, when it is bought, sold or passed on, and the largest fortunes seldom move: they are held, borrowed against, and handed down without ever passing through a taxable gate. As Tanya put it, those routes catch flows, not fortunes. A small charge on the standing stock is the one tool that reaches what the others miss. The honest answer is not one or the other. It is both.
Abrial asks the hardest question: why tax anyone simply for having too much, once we have set a decent floor and protected democracy? It is a properly liberal question and deserves a straight answer. Mine is that the floor and the ceiling are connected. You cannot reliably defend either the floor or democracy through regulation alone, because power that large does not sit quietly above the rules. It writes them. Limiting it is not envy and it is not taxing for its own sake. It is protecting the institutions of democracy.
And Jana and Tom Walker are right about the risk. This only works if it plainly targets the genuinely wealthy and not the family home or the modest pension, which is exactly why the threshold sits at ten million pounds. Get that right, and it stops being a slogan the powerful can wave away and becomes what it should be: a liberal answer to a liberal problem. Thank you all for a thoughtful debate.
@Mick Taylor “in my youth some people could pay up to 98% on their income above a threshold. People talked about leaving, but few ever did. Mostly they just paid up.”
this is nonsense
https://taxpolicy.org.uk/2025/05/08/tax-rich-1970s-loopholes/
It would be interesting to know what Simon McGrath makes of the Royal family’s income from intestate estates in the Duchies of Cornwall and Lancaster, and whether or not our’ impoverished Royal family will have to fork out VAT on the £ 64,000 Eton fees for that young chap the next in line.
Perhaps we also ought to take a look at the tax status and avoidances of British citizens in the Crown dependencies currently in the Isle of Man and Channel Islands.
@Neil Hickman
” call it what it really was – a tax on unearned income. ”
This of course is simply wrong.
If you make your capital available to someone else to use (in their business or as a loan to buy a house for example) you get paid (interest, dividend or rent, and/or capital growth) for taking risk with it. As the shareholders in (say) Thames Water may be about to find out, sometimes you lose your money – the opposite of capital growth. The warning on investment “products”, that the value of your investment can fall as well as rise is real.
There’s a case for worrying about equality, and a case for worrying about concentration of money (aka power) in too few hands; and it’s reasonable to ask whether the returns to capital realistically reflect the risk you are not repaid but to say returns to capital are “unearned” – that you get them for nothing – really is socialist nonsense.
@ Tanya
“Taxing extreme wealth to fund a sufficient floor for everyone is the mechanism. ”
Well it might be if there was enough “extreme wealth” to fund a sufficient floor.
Ai driven google tells me the world’s billionaires together own $10 trillion (approximately) There are (approximately) 8 billion people in the world. That means if all the money belonging to all the world’s billionaires were distributed equally among all of us we would have $1,250 each. Once its spent it’s gone: you can’t go back to the billionaires for more.
Much in definitions of course. The world’s total wealth is about $450 trillion, which if divided up equally means everyone would have about $56,250 of that capital. But I suspect the effort that would be needed to “keep everyone equal” would be pretty repressive if push came to shove and if the efforts of Stalin, Pol Pot and the rest are anything to go by.
“A better slogan, to a liberal at any rate, is “Liberte, Egalite, Fraternite” ”
I agree, but my fear is that it’s a bit like building a house. Everyone wants it to be quick, cheap and of high quality – but you only ever get two of the three. If you really mess it up you only get one or none of them.
@ Abrial Jerram
“Our focus should be on ensuring that the lowest living standards in society are sufficient for flourishing”
This is of course consistent with the aim of ensuring no one is enslaved by poverty etc
Simon McGrath,
“@Mick Taylor “in my youth some people could pay up to 98% on their income above a threshold. People talked about leaving, but few ever did. Mostly they just paid up.”
this is nonsense”
You’re right that it’s partly nonsense, but the link you give explains helpfully what was nonsense. Mick Taylor is right to say that few people left the country, wrong to say that most rich people paid up. In fact, most rich people employed clever tax avoidance experts to create and find loopholes, and thereby dodge their tax bills.
The key to taxing wealth effectively, therefore, is to find alll the tax mechanisms that are hard to dodge. It’s a fight – a rich man’s class struggle, if you will – and the rich class warriors are winning. So, throw everything at them.
Poverty isn’t the sole cause of enslavement. Trump, Musk, aristos, and tech bros also cause enslavement.
” In fact, most rich people employed clever tax avoidance experts to create and find loopholes, and thereby dodge their tax bills.”
Isn’t this justification for simplifying the tax system? How much tax is lost through system errors and avoidance?
I’d suggest 2 working groups.
One, not large, comprising a variety of people with different backgrounds (including their personal eduction) to start from scratch to work on a new tax system at the ‘broad brush’ level. Get the basic principles understood and agreed first before starting to code any of it.
The other group, larger, comprising people with a good knowledge of the existing tax system (income tax and capital gains tax) to identify and correct errors in the existing system. Do the fixes in related batches covering one area of the system and TEST them, then put the changes in production. It’s too big a job to fix in one go and would take to0 long.
@Tristan,
“…if all the money belonging to all the world’s billionaires were distributed equally among all of us we would have $1,250 each.”
A couple of points.
We can only apply a wealth tax in the UK. It’s up to everyone else to decide if they want one. A wealth tax would be levied on those with a wealth of over £10 million and not only billionaires. Although we could start with the billionaires and see how it goes.
Wealth and incomes have to be considered together. The wealthy have large unearned incomes from rents, dividends, and capital gains so there is a case for taxing unearned income at a higher rate than the earned income from those who work and create the wealth in the first place.
According to Googles AI , the UK’s GDP per capita stands at approximately $53,250 in nominal terms and around $67,550 when adjusted for Purchasing Power Parity (PPP).
So we can afford to level things out quite a bit, far more than your $1,250, removing everyone from poverty in the process without reducing economic incentives to work.
@Peter Martin
“We can only apply a wealth tax in the UK”
Obviously. The figures I gave were illustrative so as to force people to think about the actual numbers – as you are doing.
“The wealthy have large unearned incomes from rents, dividends, and capital gains”
Do you not accept the basic economic principle that capital is paid (by interest/rent/dividend and capital gain) for taking on risk, and therefore return to capital is not “unearned”? If your investment goes wrong (it happens) you lose money. If you make no interest, dividend or capital gain, the value of your money goes down (by inflation).
We are talking about a wealth tax. The UK’s total wealth is about £14 trillion against a population of about 70 million. The richest 1% might own 12.5% of that, so £35 billion a year (so no wonder people eyes light up) subject to all the usual assumptions about effective collection (questionable), people staying in the UK (they won’t), the total stock of wealth and its distribution remaining the same (they won’t).
Let’s just say that these kind of experiments in other countries haven’t worked to raise the funds predicted. One definition of foolishness is to do the same thing over and over again expecting a different outcome each time. Let’s not go there. Let’s concentrate on increasing the stock of financial, natural, social and intellectual capital and creating jobs so people can look after themselves so far as possible.
“Isn’t this (tax avoidance) justification for simplifying the tax system?”
HMRC (or at any rate, my father at the old Estate Duty Office back in the seventies!) would love to operate a simple, clear, undodgeable tax system. It is the rich lobbyists who fight to make tax complex.
Loopholes, typically, do not arise because civil servants made drafting errors. They arise because rich lobbyists created them, usually by putting forward specious arguments to suggest that simple rules are unfair, and then browbeating politicians to concede the complexity required to open up exploitable loopholes.
Academics and the like, who want to “start from scratch to work on a new tax system at the ‘broad brush’ level”, are not much help. They think they are in an academic debate. Actually, they are in a cage fight with the highly paid tax avoidance lawyers, and if they can’t develop cage-fighting skills, they will just get slaughtered.
Civil servants are better placed to learn these realities. In my old Dad’s day, they had a clear ethic of never seeking to overcharge, but never letting dodgers get away with things without a fight. I fear that standards have badly slipped since then.
It’s corrupted politicians who are ultimately to blame. That’s why so many voters now believe, intuitively, that the three old parties must now be overthrown.
What a disappointing piece, fundamentally missing what the liberal response to this should be.
Wealth taxes are socialist ideas and do not have a good track record. As illustrated by the stat regarding the “200 richest families.”
The changes over time has been the massive inflation of asset prices. What has happened is we have pushed asset price inflation (notably with little criticism if the policies that exacerbate that). The liberal response is to address what drives concentrations. The factors that cause the economic shift also create an sclerotic economy. The wealth tax is to say we are fine with that so long as the state get their cut.
I’m not sure liberalism is all about equalising wealth. But it’s certainly a large chunk of it. Reward is also important though there are greater rewards than wealth. How far is that from socialism where the wealth is in public hands? Some might argue it doesn’t matter who owns it, that it is spread out evenly.