The case for a wealth tax to help the UK economy recover from the economic consequences of the Covid19 pandemic has always been morally strong but now the economists and tax policy experts on the Wealth Commission have made the economic and practical case and it is irrefutable and unanswerable.
The billionaires and millionaires must pay for the emergency measures and extra public spending demanded by the deadly virus not the millions who have suffered most during the last ten months and had to endure brutal austerity measures during the past decade while the rich amassed more and more personal wealth.
The Wealth Commission Report was published on late Wednesday afternoon 9th December and recommended a one-off wealth tax imposed on millionaire couples in the UK over the next 5 years to raise £260 billion in public revenue. It is in truth a very meek and mild recommendation which is hardly going to make any of the privileged targets squeak or squeal in discomfort. Personally, I would be much less restrained if I were in charge. But the light touch nature of the proposal is counterintuitively a major strength.
A 1% Wealth Tax is More Like a Tickle Than a Tax
A meagre 1% wealth tax on millionaire couples wouldn’t be noticed at all by them but would raise an enormous amount of public funds that could be spent on regenerating much needed public services and ensure NHS staff, care workers and other key public sector employees get decent and well-deserved pay rises, not further assaults on their living standards via wage freezes and/or below inflation wage rises.
The Covid19 pandemic illustrated beyond all doubt that essential workers in society are not the bankers, stockbrokers, or politicians but the nurses, carers and key workers who transported the patients to hospitals, delivered the food and medicines to every corner of the UK and staffed the supermarkets and pharmacies so the rest of us could survive.
The new normal ushered in by the Covid19 vaccines can never be a return to the squalid reality when nurses and care staff have to rely on food banks to survive in the face of salaries which are woefully inadequate.
Valuing such workers is not displayed by contrived public clapping or pathetic badge schemes but through proper and radical wage increases which reflect the real value of these workers to society as a whole.
Covid19 Bill Not Yet Final But it Will be Big
The Covid19 pandemic is not yet over so we don’t know what the final bill will be but already the amount of central government money spent has been huge.
On 25 November, the Office for Budget Responsibility, which keeps tabs on government spending, estimated that borrowing would be £394bn for the current financial year (April 2020 to April 2021).
That’s the highest figure ever seen outside wartime.
To put that into context: before the crisis, the government was expecting to borrow about £55bn for the whole financial year.
However, governments can borrow money, print money, and raise money so there is no crisis. There is no need to freeze public sector pay and implement further public service cuts. In fact, it is economic illiteracy to cut public spending during periods of economic downturns as reductions in the spending power of the public make matters worse, not better.
What is so attractive about the Wealth Commission Report is the credibility attached to it. This is a body of over fifty economic experts in tax policy and practice. They have examined the potential ruses and loopholes and been clear on who the tax will be applied to.
This is not a bunch of well-intentioned dafties. They have done the sums and researched the proposal. It will work and when the Boris blue Tories and Starmer’s red Tories refuse to champion it, they will be exposed as the millionaire lackeys and apologists they are. This proposal should be embraced by all who believe in social justice. It is hardly revolutionary, but it is necessary and urgent.
Mild Wealth Tax Would Generate £260 Billion More in Revenue
Generating an extra £260 billion in revenues from the most comfortable and privileged in society is morally justified and economically sensible. Such a largesse over the next five years can pay for the long-overdue pay rises in the NHS and care work sector and erase entirely the usual Tory mantra to justify austerity. The millionaires, not the millions should and must pay for the Covid-19 pandemic.
Under the design recommended by the Commission, a one-off wealth tax would:
- Be paid by any UK resident (including ‘non-doms’ and recent emigrants) with personal wealth above a set threshold.
- Include all assets such as main homes and pension pots, as well as business and financial wealth, but minus any debts such as mortgages.
- Be payable in instalments over five years.
The fairness, efficiency and effectiveness of the proposal are also addressed:
“The Commission concludes that a one-off wealth tax would be:
- Fair. Wealth provides an opportunity, security and spending power. Those with the most wealth have the ‘broadest shoulders’ to afford an additional contribution to society in times of crisis.
- Efficient. Unlike taxes on work or spending, a one-off wealth tax would not discourage economic activity. The administrative costs would also be small as a proportion of the revenue raised.
- Very difficult to avoid. A one-off wealth tax could not be avoided by emigrating or moving money offshore. In fact, if well designed, it would be very difficult to avoid the tax legally”.
Dr Andy Summers, associate professor at the London School of Economics said:
“A one-off wealth tax would work, raise significant revenue, and be fairer and more efficient than the alternatives”.
While Rebecca Gowland from Oxfam said:
“It is morally repugnant to allow the poorest people to continue to pay the price for the crisis when it is clear that a fair tax on the richest could make such a difference”.
Please Sign the Parliament Wealth Tax Petition Today
I agree entirely with the above sentiment and that is why I have established a public petition via the UK Parliament website. When it reaches 10,000 signatures the government will have to respond formally to the petition while 100,000 signatures would compel the parliament to debate the proposal. The petition is simple and concise:
“Implement urgently a 1% wealth tax on millionaire couples over the next 5 years”.
Please sign it here and show your support for a socially just society that cares more for the millions than for the millionaires, and is willing to implement a wealth tax to ensure the broadest shoulders bear the burden of paying for the Covid19 pandemic. Without wealth redistribution, a better and fairer society will be impossible to deliver. A 1% wealth tax is only a small measure, but it could deliver a big bounty and prevent further cuts to public services.