English Esaay
The Pitfalls
Of
A Wealth Tax
The infamous American bank robber, Willie Sutton, reputedly told a journalist who asked him why he robbed banks that it was "because that's where the money is". The same irrefutable logic would appear to be behind the case for a wealth tax.
If the Treasury is depleted, not enough tax is being brought in and ordinary families are struggling to make ends meet, those sitting on large amounts of wealth must surely be worth tapping for a bit of it?
Of course it's not as simple as this. But before considering the potential difficulties, it's worth assessing the case for a levy on wealth for the UK.
First and foremost there is a ring of natural justice about it. Taking the most from those who have the most to give seems fair. The measure also appears popular, albeit rather more so among the 95% or so of the population who would not be liable to pay it! There is undoubtedly a sense among many people, fuelled by high profile media stories about tax avoidance, that some of the wealthiest are not paying their 'fair share'. This has already contributed to putting proposals on the table for a tax reliefs cap, a general anti-abuse rule and the extension of legislation around Disclosure of Tax Avoidance Schemes. A tax on wealth, whether temporary or permanent, could be seen as a natural next step.
A related point is that most wealth is tied up in property, which has experienced huge increases in value over the last 30 years, which some might classify as unearned windfall gains, deserving of a windfall tax. Those who have bought in the last few years though, might take issue with such an assessment!
Additionally, in the debate about whether we should tax wealth or income, a shift to wealth has one big thing in its favour – significant evidence, from OECD research in particular, that taxes on land and other wealth are less damaging to growth than taxes on either personal income or corporate
Of
A Wealth Tax
The infamous American bank robber, Willie Sutton, reputedly told a journalist who asked him why he robbed banks that it was "because that's where the money is". The same irrefutable logic would appear to be behind the case for a wealth tax.
If the Treasury is depleted, not enough tax is being brought in and ordinary families are struggling to make ends meet, those sitting on large amounts of wealth must surely be worth tapping for a bit of it?
Of course it's not as simple as this. But before considering the potential difficulties, it's worth assessing the case for a levy on wealth for the UK.
First and foremost there is a ring of natural justice about it. Taking the most from those who have the most to give seems fair. The measure also appears popular, albeit rather more so among the 95% or so of the population who would not be liable to pay it! There is undoubtedly a sense among many people, fuelled by high profile media stories about tax avoidance, that some of the wealthiest are not paying their 'fair share'. This has already contributed to putting proposals on the table for a tax reliefs cap, a general anti-abuse rule and the extension of legislation around Disclosure of Tax Avoidance Schemes. A tax on wealth, whether temporary or permanent, could be seen as a natural next step.
A related point is that most wealth is tied up in property, which has experienced huge increases in value over the last 30 years, which some might classify as unearned windfall gains, deserving of a windfall tax. Those who have bought in the last few years though, might take issue with such an assessment!
Additionally, in the debate about whether we should tax wealth or income, a shift to wealth has one big thing in its favour – significant evidence, from OECD research in particular, that taxes on land and other wealth are less damaging to growth than taxes on either personal income or corporate