Wealth taxes are back in fashion – but they’re still a terrible idea

Wealth taxes are back in fashion. In the United States, Senator Elizabeth Warren is proposing an ‘ultra-millionaire tax’. In the UK, there are calls for greater taxation of property from a coalition stretching from Lord Willetts, a former Conservative minister, to Owen Jones and other Corbynista activists. I say ‘back’ in fashion, because these taxes appear to be subject to a cycle of sorts – endlessly proposed, debated, then… quietly set aside.

Most of the recent UK examples have focused on property. The Tories’ ‘dementia tax’ – a phrase coined by Policy Exchange’s Will Heaven in The Spectator – is remembered all too well from the ill-fated 2017 election. Before that there was Ed Miliband’s ‘mansion tax’, proposed in 2013, which was to be targeted at homes over £2m in value. There was Nick Clegg’s one-off ‘emergency’ wealth tax proposed in August 2012, and a ‘tycoon tax’ proposed in March earlier that year with little detail – other than that it would be aimed at millionaires.