{"id":71655,"date":"2023-09-06T07:32:56","date_gmt":"2023-09-06T06:32:56","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=71655"},"modified":"2023-09-06T07:32:56","modified_gmt":"2023-09-06T06:32:56","slug":"taxing-wealth-this-mornings-twitter-thread","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2023\/09\/06\/taxing-wealth-this-mornings-twitter-thread\/","title":{"rendered":"Taxing wealth: this morning’s Twitter thread"},"content":{"rendered":"

I posted this thread on Twitter<\/a> this morning to explain the launch of the Taxing Wealth Report 2024:<\/em><\/p>\n

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Everywhere you look there is reason for the UK government to spend more money. Health, schools, water, transport, housing and energy. But the government and Labour say there is no money left. That, I suggest, is simply not true. A thread\u2026..<\/p>\n

The case for more government spending is obvious. The money to pay for it comes from three sources: borrowing, money creation (or QE) and taxation. If inflation is to be controlled, tax has to be in that mix.<\/p>\n

So, if the government says there is no new money to cover the cost of spending then what it is really saying is tax is at the limit of what is possible. But it very clearly is not. There is ample room for more tax in the UK, but it would all have to be paid by the wealthy.<\/p>\n

There was more than \u00a315 trillion of wealth in the UK in 2020 according to the Office for National Statistics. That\u2019s the most recent available estimate.<\/p>\n

That wealth is broken down like this:<\/p>\n

\"\"<\/p>\n

The split of ownership of wealth in the UK is deeply unequal. It looks like this:<\/p>\n

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43.5% of total wealth is owned by the top 10% of people. The top 20% of wealth owners have 63% - or almost two-thirds \u2013 of UK wealth between them. The bottom half of the population has just 8.7% of all wealth in the UK. There is extraordinary wealth inequality in the UK.<\/p>\n

This inequality is also getting worse. Between 2011 and 2020 (the period between the global financial crisis and Covid) total national income averaged \u00a31,753 billion a year. Increases in wealth averaged \u00a3592 billion a year. Wealth increases were equivalent to one-third of national income in this period \u2013 and most of that went to not very many people.<\/p>\n

That increase in financial well-being was also massively undertaxed. On average, income was taxed at 32.9% in this period. Increases in wealth were, on the other hand, taxed at 4.1%. Less than 4% of all tax was paid on wealth even though wealth increases contributed 25% of the total increase in financial wellbeing during this period.<\/p>\n

Put this tax data together with data on who are the most likely people to own wealth and you get the following chart on the likely tax rates paid by each decile of income earners in the UK over this period:<\/p>\n

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The lowest ten per cent of income earners pay tax at 44.3% on their incomes. The wealthiest pay at 38.6%. But when increases in wealth are taken into account these rates change to 44% and 21.5%, respectively. The wealthy do as a result pay tax at half the rate of the least well-off.<\/p>\n

Overall, if the wealthiest people in the UK had paid tax at the same percentage on their incomes and increases in wealth between 2011 and 2020 as people paid on their incomes alone then \u00a3170 billion more tax could have been raised in the UK each year.<\/p>\n

In that case it is impossible to argue that there is no scope to raise new tax revenue in the UK. There very obviously is, albeit only from the wealthy.<\/p>\n

It is also impossible to say that \u201cthere is no money left\u201d as some politicians have done this summer. \u00a0There are vast amounts of money left. It\u2019s just that the wealthy have got it, and they\u2019re notoriously unkeen on sharing it.<\/p>\n

It is also untrue that there is nothing a politician can do to fund more public spending at present when it is glaringly obvious that the means to raise more tax on those with high incomes and wealth very clearly exists.<\/p>\n

How do I know all this? Because this summer I have built on this data and have identified around thirty ways to raise more tax in the UK, all of it from the wealthiest in our society. Over the next few weeks, I will be publishing all those suggestions.<\/p>\n

Don\u2019t get me wrong though. I am not saying we should raise \u00a3170 billion in new taxes. That\u2019s because I am not sure that the government could spend that much.<\/p>\n

Nor am I saying that I want a wealth tax, whether one-off, as the TUC has suggested, or annually as others propose.<\/p>\n

Wealth taxes would:<\/p>\n