Why do political parties shy away from taxing wealth in the UK when, according to this report, at least £18 billion could be raised each year if governments introduced a moderate wealth tax that would affect just 1% of the population?
Where taxes come from is increasingly an intergenerational fairness issue. This research demonstrates that governments could increase the tax take and use that money to reduce the tax bills of millions of young people and working-age adults currently over-taxed with money spare to spend on the health and social care costs of our ageing population.
- A wealth tax would reduce intergenerational unfairness in the tax system
- Total UK wealth is now seven times national income and running at approx. £15 trillion
- The median wealth of the over-65s has increased three times as much as the median wealth of 25-44 year-olds, up from 32.5% in 2007 to 45% in 2016
- Wealth is hardly taxed in the UK
- The tax system privileges those with wealth since the majority of the tax burden comes from taxes on work
- A progressive annual tax on those with wealth above £2 million at 0.8%, above £5 million at 1% and above £1 million at 1.2%, would raise between £18 billion and £23 billion
- Policymakers could use that revenue to lower the income tax rates for young people and raise the personal tax allowance to at least £13,800 with money spare to spend on health and social care for the elderly