Today the Wealth Tax Commission, an initiative involving the LSE, has recommended a ‘one-off’ 5 per cent levy on the assets of Britain’s wealthy residents to pay for the costs of the pandemic. Two immediate problems jump out of the proposal.
First, to raise the money it would not be a one-off levy, but rather a 1 per cent tax for five years on the total wealth — property, savings, you name it — on households worth more than £1 million (the tax is estimated to hit one in six adults). Second, this five year period is estimated to raise £260 billion — close to the £280 billion the Office for Budget Responsibility says can be ‘directly attributable to the package of support’ announced since March to tackle Covid-19. But total borrowing this year is estimated to be £394 billion. This would still leave quite a significant hole in the public finances, making the wealth tax a far less convincing ‘saviour policy’.
The intentions may be good, but in practice this transfer of wealth will also reduce wealth itself
It’s no real surprise that this proposal isn’t what it says on the packaging.
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in