Calls to tax the super-rich are no longer confined to fringe rallies or left-wing think tanks – they’re now firmly in the political mainstream.
According to YouGov, two-thirds of the British public, including a majority of Conservative voters, support a wealth tax on individuals with more than £10 million in assets.
It’s not hard to see why: the country faces a funding crisis, services are under strain, and the public is being asked to swallow yet more fiscal pain. The question many are asking is simple: why shouldn’t the very wealthiest shoulder more of the burden?
But as I explained in The Independent’s latest Ask Me Anything, this isn’t a straightforward issue. There are real risks: capital flight, investor nerves, and a government already struggling to convince the world that Britain is open for business.
There are also deep flaws in our existing tax system, and a shocking lack of data on who actually holds wealth in this country.
During the Q&A, I answered your questions on everything from Labour’s silence and HMRC’s blind spots to non-doms, offshore trusts and the fear that we’ll end up punishing wealth creators rather than closing genuine loopholes.
The answers may not please everyone, but this is a debate we need to have.
Q: Isn’t socialism the problem here?
Margaret Thatcher once said that the problem with socialism is that you eventually run out of other people’s money to spend. We are now well past that point. Since Blair was first elected, the political establishment has increased the overall tax burden to its highest ever level in history, and created an ever larger class of people living off welfare who do not want to do many of the jobs that need doing. The economy is now in chronic stagflation, the National Debt is escalating, and just like Stalin and the Kulaks, our political establishment is scapegoating the very people who are the wealth creators and major taxpayers.
Mark
A: It’s hard not to agree with you. We built a welfare state and the NHS when our population was smaller. Now, they remain elephants in a crowded room that no politician dares touch. Their models are no longer suitable for their intended purpose. I’m not a fan of Thatcher, but she was right here, though I’d say Tory governments are also guilty of the same populism.
Q: Wouldn’t the wealthy just shield their money from a wealth tax?
A wealth tax in the UK would likely trigger a wave of asset restructuring among the wealthy. Those who hadn’t already done so would move quickly to shield their wealth. This could include shifting ownership of property, art, shares, and other taxable assets into foreign foundations, trusts, or offshore holding companies beyond HMRC’s reach.
EmiliaPortante
A: I agree with your sentiment, but we should do far more to clamp down on tax avoidance and evasion. The UK turns a blind eye to offshore havens it’s responsible for – the Isle of Man, Channel Islands, Cayman Islands, etc. There’s a whole industry dedicated to avoiding, and sometimes evading, taxes. It makes a mockery of the government’s claims to be collecting fairly.
Q: Why complain about a 1 per cent tax rise if you’re worth £500m?
What the super-wealthy are doing is essentially making sure they have enough money to guarantee their children’s and grandchildren’s futures…why aggressively campaign against a 1 per cent tax rise when you have £500m in wealth or even £100m? You will live comfortably forever – the reason is they want their children to do the same.
ChrisMatthews
A: It’s true the rich sit atop a mountain of wealth, but they can’t be forced to distribute it — if we try, they’ll leave. If we make them believe in the UK, they’ll choose to spend, donate, and invest here. That may sound naive, but the alternative is worse.
Q: Would you personally pay a wealth tax or leave the UK?
CharlesMartel
A: It’s unlikely I’d qualify, but if I did, I’d stay – I love this country. But the concern isn’t people like me. It’s the globally mobile few that nations compete for. Other countries are falling over themselves to attract them. So should we.
Q: What about the millionaires who want to be taxed more?
Illearthstoner
A: I’m all for millionaires paying more tax – if they want to. The trouble is, far more don’t. Some are already abroad, deciding where to go next. And Britain slips down the list when they do.
Q: How do you ensure redistribution if you’re against a wealth tax?
Illearthstoner
A: We should aim to turn the trickle into something stronger – not a flood, but a solid flow. A previous Labour government said: “We love the filthy rich, provided they pay the taxes they owe.” They recognised their worth and wanted more of them.
Q: Which European countries still have a wealth tax? Do they work?
CharlesMartel
A: We should examine why so few countries have wealth taxes when, on paper, they’re an easy win. Most democracies are similarly strapped for cash, but don’t go there. Some, like Italy, are even offering incentives to attract the rich. Why?
Q: Why doesn’t HMRC know how many billionaires are in the UK?
forum
A: Yes, it’s shocking HMRC knows so little. How can they apply serious analysis with such gaps? In the US, the IRS studies the Forbes rich list and works with its compilers. We have the Sunday Times Rich List, but HMRC pays it scant regard. That’s an obvious place to start.
Q: Who’s going to value all the houses, the repositories of most people’s wealth?
GrymSdijk
A: Property experts are predicting a crash, certainly in London, should there be a wealth tax. Values at the top end will fall, and that will cascade downwards. As to who will assess the worth of a property, should there be a mansion tax, say, those estimates are already made by councils for council tax
Q: Is Labour’s silence on wealth tax a sign they are considering it?
BBenB
A: Almost certainly, yes. If they weren’t, they’d say so and end the speculation, which is already sending the wealthy abroad and discouraging investment. Their silence suggests they’re weighing it carefully.
Q: Why no action, despite the public’s support?
Jimmy
A: Because they know it would damage business and wealth creation. The richest tend to be those who own businesses and invest. A wealth tax sends a negative message to potential investors about how Britain views them.
Q: How can a democratic government reasonably resist a popular policy?
Jase
A: They can justify it because, while popular, it comes at a cost. It’s a case of the head ruling the heart. Yes, taxing the rich sounds better than cutting services, but it’s not that simple – the tax system could be made more efficient, something successive governments have failed to do.
These questions and answers were part of an ‘Ask Me Anything’ hosted by Chris Blackhurst at 6pm BST on Wednesday, 16 July. Some of the questions and answers have been edited for this article. You can read the full discussion in the comments section of the original article.
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