Advertisement
Social Justice

Brits overwhelmingly back a wealth tax on the ultra-rich. Would it work in the UK?

A wealth tax could be an ‘open goal for the government’, experts say. Here are the arguments for and against introducing a tax on the ultra-rich

Brits overwhelmingly back a wealth tax on the ultra-rich, a new survey has revealed, amid speculation Labour may consider introducing one.

Two-thirds of UK voters support a 2% tax on individuals with wealth over £10 million, new YouGov polling has revealed. Advocates estimate the levy could raise £11 billion.

Support spans political lines: 88% of Labour voters back the measure, followed by 83% of Lib Dems, 61% of Conservatives, and 55% of Reform UK supporters.

Read more:

The proposal emerged as the government reels from the near-defeat of its controversial welfare cuts bill. Last-minute concessions secured the bill’s passage – but at the cost of £5.5 billion in projected savings.

While chancellor Rachel Reeves has previously ruled out a wealth tax, Downing Street has not denied growing speculation.

Advertising helps fund Big Issue’s mission to end poverty
Advertisement

“Those with the broadest shoulders should carry the largest burden,” a spokesperson said.

It is also another battleground for Labour to fight Reform UK. Farage’s recent announcement of a Britannia Card promised to give wealthy foreign residents favourable tax status for the price of a £250,000 upfront fee and then hand that cash to the poorest workers.

So would a wealth tax work? Here are the arguments for and against.

What are the advantages of a wealth tax?

A wealth tax is – as the name suggests – a tax on wealth. It’s “broad-based,” the experts at The Tax Commission say.

That means a tax on most (or all) types of assets that a person owns, rather than a levy on a specific type of asset like property. Net wealth means a person’s wealth minus any liabilities or debt.

The UK is among the most unequal countries in the OECD. The richest 10% of households own 43% of all wealth, while the poorest half own just 9%. As of 2023, the wealth of the UK’s 50 richest families exceeded that of 34.1 million people – over half the population.

Advertising helps fund Big Issue’s mission to end poverty

A wealth tax could help correct this imbalance, says Jake Atkinson from Tax Justice UK.

“Inequality has skyrocketed. We have millions on NHS waiting lists, queues for food banks, millions of children in poverty, and then at the very same time, there are very, very rich people who have massive, massive amounts of wealth, which is currently under taxed.”

“It’s an open goal for the government.”

The current tax system favours the wealthy by taxing income from assets – like dividends and capital gains – at much lower rates than income from work.

“Right now, if I buy a share of Amazon stock and then sell it for a profit a few years later, my tax on that gain is going to be at a lower rate than what an Amazon warehouse employee is going to pay on her wages,” says Tim Stumpff from Patriotic Millionaires. “That just doesn’t make any sense.”

A wealth tax alone isn’t a silver bullet, he added. Equalising capital gains tax, taxing private jets, and closing loopholes around national insurance could generate even more revenue. But a wealth tax is a strong starting point – and good for the economy, too.

Advertising helps fund Big Issue’s mission to end poverty

“If we had an NHS that worked, that didn’t have massively long waiting lists, we’d have fewer people missing work. If we had a better school system, we’d have a better educated society… If we had a public transportation system that worked, where trains aren’t getting delayed all the time up North, we’d have a much more productive economy,” Stumpff said.

“It’s a win-win for everyone.”

What are the disadvantages of a wealth tax?

Implementing a wealth tax isn’t straightforward.

“It would require the government to set up a new administrative apparatus to value wealth – and valuation would be extremely difficult for some assets, such as private businesses,” said Stuart Adam, senior economist at the Institute of Fiscal Studies.

Atkinson doesn’t dispute this – the ultra-rich often hide their assets, he warns. But the solution is simple: fund HMRC properly.

“HMRC already administer inheritance tax… they have the capacity to facilitate an asset register. We are up front that an investment in HMRC would be needed… but that would be a tiny, tiny percentage of what a wealth tax would bring in.”

Advertising helps fund Big Issue’s mission to end poverty

Nigel Green, CEO of global financial advisory group deVere Group, said “even floating the idea is dangerous” as it erodes investor confidence.

“The ultra-wealthy will leave or reorganise to reduce exposure. The tax base shrinks, investment slows, and the very people the economy depends on are replaced by a credibility gap,” said Green.

The concern that the ultra-wealthy would leave the country to avoid the tax is often cited.

Trying to raise large sums from the very rich “would make the UK a less attractive place for those people to live,” Adam warned.

But Stumpff says that fear is overblown: “You’ll hear a lot of pushback: ‘Oh, these super rich people. They’ll just leave the country.’ That’s just a lie that’s been disproven over and over and over again.”

Analysis by Arun Advani from London School of Economics found that up to 17% of the people in the wealth tax bracket would leave the country – but that the state could still raise around £10bn a year from a 1% tax on assets over £10m.

Advertising helps fund Big Issue’s mission to end poverty

Stumpff claims that other studies that warn of a “millionaire exodus,” are based on “highly unreliable and opaque methodology.” Migration rates among millionaires have remained steady at around 1% since 2013.

“The tax avoidance industry claims that all these bad things are going to happen. They never happen.”

Do you have a story to tell or opinions to share about this? Get in touch and tell us more

Real stories. Real impact. Real change. No clickbait. Just trustworthy journalism that gets to the heart of big issues in the UK and beyond. Words drive real change. If this article gave you something to think about, help us keep doing this work. Support Big Issue's journalism from £5 a month.
Advertising helps fund Big Issue’s mission to end poverty

READER-SUPPORTED SINCE 1991

Reader-supported journalism that doesn’t just report problems, it helps solve them.

Recommended for you

Read All
Premier League clubs strike new shirt sponsor deals with gambling firms despite looming ban
A composite of Premier League shirts for the 25/26 season including Sunderland, Crystal Palace, Everton, Nottingham Forest, and Aston Villa. Everton and England goalkeeper Jordan Pickford is also pictured
Football

Premier League clubs strike new shirt sponsor deals with gambling firms despite looming ban

The fight to keep two libraries in two of Liverpool's most deprived areas: 'It would be a grievous blow'
A protest sign at Dovecot Muli Activity Centre in Liverpool
Libraries

The fight to keep two libraries in two of Liverpool's most deprived areas: 'It would be a grievous blow'

Council drops bid to evict food bank from premises in child poverty hotspot: 'Our future is secure'
Food banks

Council drops bid to evict food bank from premises in child poverty hotspot: 'Our future is secure'

2,600 forgotten prisoners left to rot indefinitely under 'inhumane' sentences outlawed 12 years ago
Criminal justice

2,600 forgotten prisoners left to rot indefinitely under 'inhumane' sentences outlawed 12 years ago

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Citroën Ami: the tiny electric vehicle driving change with The Big Issue
4.

Citroën Ami: the tiny electric vehicle driving change with The Big Issue