At least Dan has thought about a wealth tax now. However, some of these arguments against are silly. For instance, the argument "None of these proposals even acknowledge the potential for adverse economic impact." Well, have you acknowledged the potential for productive economic impact? Also the extremely wealthy who you argue will just leave, are they paying UK taxes anyway? I don't think so. As you've already said, "one in seven British billionaires now live in tax havens; others one in three." Additionally, why would fixing the current tax system not cause the same exodus?
Ultimately, I recognise some of the worries here but the argument against is really flimsy. Wanting to improve the current system isn't sexy and won't motivate the population. If you need more tax then you need a message that people can get on board with, even if it isn't your ideal plan. A wealth tax is as much messaging as it is policy, it's about where you shift the burden and the government have to place a much greater burden on the wealthiest in society.
First, the productive economic impact of raising a wealth tax mostly seems to be about redirecting government spending or allowing government to spend more because it's tax receipts go up. That strikes me as almost the same argument over inheritance tax exemptions.
Inheritance tax exemptions for family businesses were designed to allow productive businesses with high capital value to be passed on rather than sold or broken up. That has a purpose of ensuring that for so long as a business has the capacity to make money for its owners, there is no point in forcing a sale by saying that 40% of the value of it needs to be given up to the state. No business can survive a 40% value tax on death of its owner. That's the logic and reason for the exemption. A shit business, on the other hand, might as well be sold. So unless you believe there is no link between ownership of a business and it's productive value to the economy - which would surprise me - then you need that exemption. There are other reasons for dealing with inheritance tax reforms - and Dan's addressed these elsewhere. (The exemptions were abolished because the one for farming was too easy to obtain - or that farmers don't vote labour.)
Government spending going up does not magically improve productive value. Just think that if all it did was to pay people working for government more. Does that automatically improve productive value? Better infrastructure maybe. But that is not a tax decision - it's an allocation decision.
The only productive economic impact of wealth tax really affects assets that are constrained in value because of their scarcity value - aka property. That can be addressed in other ways as well - notably higher property taxes on second homes - but that has the intent of driving down capital values which is not a vote winner.
The real productive economic impact of a tax is when they have skewed results. Dan's documented these numerous times. The loss of the personal allowance, the loss of the two child benefit cap etc, which results in steep changes. Better focusing on getting rid of those. These can also by exemption. The same goes for the 98% tax on unearned income in the 1970s. People just left (or spent more money and ingenuity on avoiding tax).
Secondly, you repeat the criticism of HMRC not knowing how many billionaires there are. That's because the data on how much people are worth on an individual or family level is fundamentally unreliable. HMRC relies on movement of cash for it's information - because the value is certain - it is after all a cash amount. That's where tax is raised. In a barter economy, tax was hard to raise. So you had joys like the window tax. That worked, because it was certain (you can count windows). But resulted in property owners blocking windows. When someone dies is the only time right now that there is a process - which is necessary not just for tax but also because someone's estate is frequently divided up by value not by object - that someone's assets are valued. Hence IHT. Employing an army of valuers to value your estate every year will be expensive... Bank accounts, pensions, easy to value. How much is your house worth? How much is your car worth? How much is your furniture worth? Much harder.
Thirdly, that's because Martin Sandbu starts his article by talking about it replacing both IHT and CGT. IHT and CGT raised between them £24bn in 2023-24. So that means the switch to wealth tax using the numbers in Dan's report will raise at most £1bn more - and might result in a revenue loss of £9bn.
1. You're right that simply increasing government spending doesn’t automatically boost productivity. But this isn’t a binary question. The productive value of a wealth tax lies in its ability to enable more efficient public investment and fairer distribution of fiscal burdens. Infrastructure, education, R&D, and healthcare — all of which are publicly funded — are critical drivers of long-term productivity. These require sustainable and progressive tax sources.
Inheritance tax exemptions for businesses are a separate policy issue and can still be preserved under a wealth tax system and these aren't mutually exclusive. Exemptions can and do exist under various models, such as Norway's or Spain’s, while still taxing net wealth broadly. It’s not either/or.
Also, I never said ownership has no link to productive value, but wealth isn't always tied to productive assets. Much of it is passive and tied up in property portfolios, financial assets, or offshore trusts. There is no economic law that says these must be protected at all costs while public services are underfunded.
2. On your point about Sandbu and the revenue estimates—you're right that a replacement tax isn’t meant to vastly increase revenue on its own. But again, this misses the political and symbolic function. A wealth tax isn’t just a fiscal lever, it’s a signal about fairness and balance. Right now, people on median incomes are paying high effective tax rates while ultra-wealthy individuals often pay far less as a proportion of their total wealth.
And yes, wealth tax design matters. If badly designed, it can underperform. But that’s an argument for better design—not abandonment. France’s experience was flawed due to low thresholds and high exemptions, but countries like Spain and Norway still maintain functioning wealth taxes, with important lessons we can draw on.
3. You’re correct that HMRC currently doesn’t have perfect data on wealth, but isn’t that exactly the point? The current system deliberately avoids collecting this information, making it impossible to track inequality or enforce any form of accountability. Expanding HMRC’s capacity is a necessary step, wealth tax or not.
Valuation is always a challenge — but it’s not insurmountable. We already value assets at death (IHT), at disposal (CGT), or in divorce and bankruptcy proceedings. Financial accounts, pensions, and property are reasonably trackable. And yes, some assets are harder to value (e.g. art, collectibles), but again—this is not a new problem, and one that already exists within IHT and CGT frameworks.
4. The idea that billionaires will simply “leave” is used constantly, but rarely backed by credible data. Many already live in tax havens and still benefit from UK infrastructure, markets, and legal systems. If your fear is they’ll avoid or evade taxes—then surely that’s an argument for tighter enforcement and less porous laws, not policy paralysis.
Besides, plenty of wealthy people stay in high-tax countries (Germany, Scandinavia, Canada) because those countries offer stability, good infrastructure, and high quality of life. The UK doesn’t need to become a tax haven to be competitive — it needs to be fair.
The status quo is deeply regressive. A wealth tax won’t solve everything, but it could be an important part of a broader strategy to rebalance the tax system. It's not about punishing success—it's about ensuring a fair contribution from those with the broadest shoulders, and giving the public a sense that the system works for everyone.
Let’s not allow the perfect to be the enemy of the good.
You say some of the arguments against a wealth tax are "silly", yet your own position seems to rely more on vibes than verified evidence. Suggesting that a wealth tax could have “productive economic impact” might feel good rhetorically, but you present no modelling, data, or case study to back that up. In fact, your counterpoint to concerns about capital flight is essentially: “Well, aren’t they all avoiding tax already?” That’s not an argument for a new tax, it's an argument for fixing enforcement and a tacit admission that designing and implementing a functioning wealth tax in the UK would be immensely difficult.
You cite the Sky article, but it underlines a critical point: HMRC doesn’t even know how many billionaires are paying tax here. How, then, would it competently administer an annual, accurate, enforceable valuation of global wealth, across opaque asset structures, trusts, and jurisdictions? Wishing HMRC were more capable isn’t the same as proving it is.
And as for the Martin Sandbu article: It’s thoughtful, but it doesn’t provide a roadmap for a workable UK policy. Anecdotes from Norway or Argentina don’t constitute a blueprint. Policy transfer doesn’t work like that. You’d need sustained political capital, robust administration, and international coordination; none of which you’ve shown is actually in place.
If anything, your final point gives the game away: you admit a wealth tax is “as much messaging as it is policy”. Exactly. And until there’s a coherent plan grounded in economic reality, it remains just that: messaging. Much like the kind of messaging that got us into a tax policy mess in the first place.
1. This article claimed that because pro-wealth tax articles don't acknowledge the potential for adverse economic impact means that they are not reputable. But this article does the same thing, just the other way around.
2. Yes they are avoiding tax already. Exactly. So fixing the current tax system faces the exact same issues. So you may as well institute a wealth tax, which is progressive and taxes wealth not work.
3. The Sky article IS my point. The fact we don't know is the problem. HMRC needs to estimate personal wealth like the Inland Revenue started to do in the 70s before Thatcher and co. So, it already needs a huge increase in resources.
6. “As much messaging as it is policy”. They are equal. I didn't say it's more messaging than policy. To make big change you need public support, and this policy has support. It may not be your perfect solution but it is one that the public want and can happen, so let's work on making it as bullet proof as possible—not just disregard it for other solutions that face incredibly similar challenges, yet lack the same kind of popular public support.
A bit heavy for my surviving braincells, but I understand the broad point from the sections read on effectiveness. I am convinced and depressed by it. Restocked to remind me to read some more later and read any other comments made.
At least Dan has thought about a wealth tax now. However, some of these arguments against are silly. For instance, the argument "None of these proposals even acknowledge the potential for adverse economic impact." Well, have you acknowledged the potential for productive economic impact? Also the extremely wealthy who you argue will just leave, are they paying UK taxes anyway? I don't think so. As you've already said, "one in seven British billionaires now live in tax havens; others one in three." Additionally, why would fixing the current tax system not cause the same exodus?
It seems that we have lots of information available to us to implement a successful wealth tax (based on other countries) and HMRC needs to be expanded anyway: https://news.sky.com/story/hmrc-doesnt-know-how-many-billionaires-pay-tax-in-the-uk-13397238
Ultimately, I recognise some of the worries here but the argument against is really flimsy. Wanting to improve the current system isn't sexy and won't motivate the population. If you need more tax then you need a message that people can get on board with, even if it isn't your ideal plan. A wealth tax is as much messaging as it is policy, it's about where you shift the burden and the government have to place a much greater burden on the wealthiest in society.
Also Martin Sandbu discredits many of the arguments you put forward: https://www.ft.com/content/7ec2c02f-d304-419d-ad12-f1fcfcce86a0?sharetype=blocked
Hi Northy - good questions.
First, the productive economic impact of raising a wealth tax mostly seems to be about redirecting government spending or allowing government to spend more because it's tax receipts go up. That strikes me as almost the same argument over inheritance tax exemptions.
Inheritance tax exemptions for family businesses were designed to allow productive businesses with high capital value to be passed on rather than sold or broken up. That has a purpose of ensuring that for so long as a business has the capacity to make money for its owners, there is no point in forcing a sale by saying that 40% of the value of it needs to be given up to the state. No business can survive a 40% value tax on death of its owner. That's the logic and reason for the exemption. A shit business, on the other hand, might as well be sold. So unless you believe there is no link between ownership of a business and it's productive value to the economy - which would surprise me - then you need that exemption. There are other reasons for dealing with inheritance tax reforms - and Dan's addressed these elsewhere. (The exemptions were abolished because the one for farming was too easy to obtain - or that farmers don't vote labour.)
Government spending going up does not magically improve productive value. Just think that if all it did was to pay people working for government more. Does that automatically improve productive value? Better infrastructure maybe. But that is not a tax decision - it's an allocation decision.
The only productive economic impact of wealth tax really affects assets that are constrained in value because of their scarcity value - aka property. That can be addressed in other ways as well - notably higher property taxes on second homes - but that has the intent of driving down capital values which is not a vote winner.
The real productive economic impact of a tax is when they have skewed results. Dan's documented these numerous times. The loss of the personal allowance, the loss of the two child benefit cap etc, which results in steep changes. Better focusing on getting rid of those. These can also by exemption. The same goes for the 98% tax on unearned income in the 1970s. People just left (or spent more money and ingenuity on avoiding tax).
Secondly, you repeat the criticism of HMRC not knowing how many billionaires there are. That's because the data on how much people are worth on an individual or family level is fundamentally unreliable. HMRC relies on movement of cash for it's information - because the value is certain - it is after all a cash amount. That's where tax is raised. In a barter economy, tax was hard to raise. So you had joys like the window tax. That worked, because it was certain (you can count windows). But resulted in property owners blocking windows. When someone dies is the only time right now that there is a process - which is necessary not just for tax but also because someone's estate is frequently divided up by value not by object - that someone's assets are valued. Hence IHT. Employing an army of valuers to value your estate every year will be expensive... Bank accounts, pensions, easy to value. How much is your house worth? How much is your car worth? How much is your furniture worth? Much harder.
Thirdly, that's because Martin Sandbu starts his article by talking about it replacing both IHT and CGT. IHT and CGT raised between them £24bn in 2023-24. So that means the switch to wealth tax using the numbers in Dan's report will raise at most £1bn more - and might result in a revenue loss of £9bn.
1. You're right that simply increasing government spending doesn’t automatically boost productivity. But this isn’t a binary question. The productive value of a wealth tax lies in its ability to enable more efficient public investment and fairer distribution of fiscal burdens. Infrastructure, education, R&D, and healthcare — all of which are publicly funded — are critical drivers of long-term productivity. These require sustainable and progressive tax sources.
Inheritance tax exemptions for businesses are a separate policy issue and can still be preserved under a wealth tax system and these aren't mutually exclusive. Exemptions can and do exist under various models, such as Norway's or Spain’s, while still taxing net wealth broadly. It’s not either/or.
Also, I never said ownership has no link to productive value, but wealth isn't always tied to productive assets. Much of it is passive and tied up in property portfolios, financial assets, or offshore trusts. There is no economic law that says these must be protected at all costs while public services are underfunded.
2. On your point about Sandbu and the revenue estimates—you're right that a replacement tax isn’t meant to vastly increase revenue on its own. But again, this misses the political and symbolic function. A wealth tax isn’t just a fiscal lever, it’s a signal about fairness and balance. Right now, people on median incomes are paying high effective tax rates while ultra-wealthy individuals often pay far less as a proportion of their total wealth.
And yes, wealth tax design matters. If badly designed, it can underperform. But that’s an argument for better design—not abandonment. France’s experience was flawed due to low thresholds and high exemptions, but countries like Spain and Norway still maintain functioning wealth taxes, with important lessons we can draw on.
3. You’re correct that HMRC currently doesn’t have perfect data on wealth, but isn’t that exactly the point? The current system deliberately avoids collecting this information, making it impossible to track inequality or enforce any form of accountability. Expanding HMRC’s capacity is a necessary step, wealth tax or not.
Valuation is always a challenge — but it’s not insurmountable. We already value assets at death (IHT), at disposal (CGT), or in divorce and bankruptcy proceedings. Financial accounts, pensions, and property are reasonably trackable. And yes, some assets are harder to value (e.g. art, collectibles), but again—this is not a new problem, and one that already exists within IHT and CGT frameworks.
4. The idea that billionaires will simply “leave” is used constantly, but rarely backed by credible data. Many already live in tax havens and still benefit from UK infrastructure, markets, and legal systems. If your fear is they’ll avoid or evade taxes—then surely that’s an argument for tighter enforcement and less porous laws, not policy paralysis.
Besides, plenty of wealthy people stay in high-tax countries (Germany, Scandinavia, Canada) because those countries offer stability, good infrastructure, and high quality of life. The UK doesn’t need to become a tax haven to be competitive — it needs to be fair.
The status quo is deeply regressive. A wealth tax won’t solve everything, but it could be an important part of a broader strategy to rebalance the tax system. It's not about punishing success—it's about ensuring a fair contribution from those with the broadest shoulders, and giving the public a sense that the system works for everyone.
Let’s not allow the perfect to be the enemy of the good.
You say some of the arguments against a wealth tax are "silly", yet your own position seems to rely more on vibes than verified evidence. Suggesting that a wealth tax could have “productive economic impact” might feel good rhetorically, but you present no modelling, data, or case study to back that up. In fact, your counterpoint to concerns about capital flight is essentially: “Well, aren’t they all avoiding tax already?” That’s not an argument for a new tax, it's an argument for fixing enforcement and a tacit admission that designing and implementing a functioning wealth tax in the UK would be immensely difficult.
You cite the Sky article, but it underlines a critical point: HMRC doesn’t even know how many billionaires are paying tax here. How, then, would it competently administer an annual, accurate, enforceable valuation of global wealth, across opaque asset structures, trusts, and jurisdictions? Wishing HMRC were more capable isn’t the same as proving it is.
And as for the Martin Sandbu article: It’s thoughtful, but it doesn’t provide a roadmap for a workable UK policy. Anecdotes from Norway or Argentina don’t constitute a blueprint. Policy transfer doesn’t work like that. You’d need sustained political capital, robust administration, and international coordination; none of which you’ve shown is actually in place.
If anything, your final point gives the game away: you admit a wealth tax is “as much messaging as it is policy”. Exactly. And until there’s a coherent plan grounded in economic reality, it remains just that: messaging. Much like the kind of messaging that got us into a tax policy mess in the first place.
Ok:
1. This article claimed that because pro-wealth tax articles don't acknowledge the potential for adverse economic impact means that they are not reputable. But this article does the same thing, just the other way around.
2. Yes they are avoiding tax already. Exactly. So fixing the current tax system faces the exact same issues. So you may as well institute a wealth tax, which is progressive and taxes wealth not work.
3. The Sky article IS my point. The fact we don't know is the problem. HMRC needs to estimate personal wealth like the Inland Revenue started to do in the 70s before Thatcher and co. So, it already needs a huge increase in resources.
4. Sandbu is deconstructing the very myths pushed by this article. You can go elsewhere to find the blueprint you want: https://taxjustice.uk/blog/how-to-raise-60-billion-for-public-services-our-ten-tax-reforms/
6. “As much messaging as it is policy”. They are equal. I didn't say it's more messaging than policy. To make big change you need public support, and this policy has support. It may not be your perfect solution but it is one that the public want and can happen, so let's work on making it as bullet proof as possible—not just disregard it for other solutions that face incredibly similar challenges, yet lack the same kind of popular public support.
A bit heavy for my surviving braincells, but I understand the broad point from the sections read on effectiveness. I am convinced and depressed by it. Restocked to remind me to read some more later and read any other comments made.