Babelfish launches Peoplenomics: four people-first policies, modelled by NIESR and CEBR, that could add £36bn to UK GDP and cut inflation. Put people first.
Capital Gains Tax Reform and a Wealth Tax Could Raise £36bn
A wealth tax and capital gains reform could raise £36bn. With 50 UK families owning as much as half the country, the Chancellor must be bold this Budget.
Chancellor, don't be afraid to win ...target extreme wealth!
Most UK polls on tax will tell you the same thing - there is overwhelming public support for taxing the super-rich.
Opponents to the notion will tell you "people always vote for taxes that don't affect them" but, given the impact that the UK economy is having on normal people, it's hardly surprising people think they're already being squeezed enough.
Wage growth has stagnated and you can no longer work your way up the economic ladder; the cost of living is kneecapping most families with energy, food, and housing bills (the basics) all on the terrifying rise; tax contributions have increased for millions as thresholds continue to be frozen despite inflation and everything costing us more; debt as a management plan is an increasingly common option for many, and the stress of all this is having a major impact on our national emotional state.
We have been told we need to work together through these hard times and sunshine is in touching distance, but it's the people already on sunloungers parroting these lines. Since the late 1970s the UK has been offered nothing new - policy-makers and economists have forgotten how to think beyond exhausted ideas that are now over half a century old.
What neoliberalism promised, it most certainly has not delivered – money does not trickle down; capital unguarded and unregulated does not make everyone richer. But it does make a few richer.
If this newly formed government is to succeed it needs to mean it when it talks about bold change because there's no time left for a bits-and-pieces and "cross our fingers things will be all okay" approach. Our new Chancellor needs to tax extreme wealth if he wants to create a country that can thrive.
This Budget needs to introduce the pathway to an annual wealth tax as well as wholesale reform of capital gains, equalising rates with income, introducing a settling-up fee, and an investment allowance that lets business and entrepreneurs thrive. These policies are not a panacea but they would be a bloody good start.
We don't pretend that a 2% tax on those with more than £10million will magically reduce inequality. The millionaires I work with tell me that the return on investment means their wealth would continue to rise even with the introduction of a 2% wealth tax on £10million+ (makes me wonder what all the fuss is about). Nor will reforming capital gains, as outlined by the brilliant work of Centax, be the lone solution to fiscal fairness. But together they could do two important things: generate around £36billion for our national coffers and, more importantly, indicate that this government is serious about putting people first and designing tax policy that considers fairness and tackles inequality.
These ideas are not the only ones out there - so many brilliant brains are proposing ideas that can help rebalance our economy.
A long list of policies developed by Tax Justice UK covers 10 different ways we can raise revenue while also making for a fairer tax system, one that ensures wealth pays properly. Policies such as these could also help us find ways to cut costs - maybe even taxes - for those on lower incomes. There's just no common sense left if we settle for an economy that generates 63% of its tax revenue from income and consumption but only 4% from capital. We have an ageing population and with the rise of AI face the threat of fewer and fewer jobs, while 50 families own the same wealth as half the country.
Our public wealth shrank from £337billion in 1989 to MINUS £1trillion in 2023.
There is only one sensible future for taxation and that is to tax wealth more and better. But enough talking; we look to our Chancellor to do it. Delivering a wealth tax and reform of capital gains would be a fabulous start to winning us a better economy and a better country, the one many of us have been contributing our fair share towards for years.
This kind of bold change might feel like a risk but it's the kind of risk that's worth taking because there is so much we can all win from it.
Chancellor, I look forward to your ambition. I look forward to us - all of us - winning.
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