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The case for a progressive annual wealth tax in the UK updated

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  • Tippet, Benjamin
  • Onaran, Özlem
  • Wildauer, Rafael

Abstract

This paper analyses the revenue potential of a progressive annual net wealth tax in the UK. A progressive net wealth tax is a tax on the stock of net wealth that is designed to raise revenues primarily from the wealthiest individuals. We present a baseline progressive net wealth tax that only taxes the top 1% wealthiest individuals. Individuals with net wealth above £2.2 million (the top 1%) are taxed at a marginal rate of 1%; above £3.6 million (the top 0.5%) at a marginal rate of 2% and above £11.2 million (the top 0.1%) at a marginal rate of 4%. We estimate that in 2018-2020 this tax would have raised between £46 and 78 billion a year after administration costs. It would raise £46 billion if 50% of the tax is avoided, £69bn if 25% of the tax is avoided, and £78 billion if 15% of the tax is avoided. This is equivalent to roughly 8-12% of total tax revenues taken by the UK government in that year. This work updates a previous working paper from 2021.

Suggested Citation

  • Tippet, Benjamin & Onaran, Özlem & Wildauer, Rafael, 2024. "The case for a progressive annual wealth tax in the UK updated," Greenwich Papers in Political Economy 47322, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:47322
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    File URL: https://gala.gre.ac.uk/id/eprint/47322/20/47322%20TIPPET_The_case_for_a_progressive_annual_wealth_tax_in_the_UK_%28WORKING%20PAPER%29_2024.pdf
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    References listed on IDEAS

    as
    1. Paul Eckerstorfer & Johannes Halak & Jakob Kapeller & Bernhard Schütz & Florian Springholz & Rafael Wildauer, 2016. "Correcting for the Missing Rich: An Application to Wealth Survey Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(4), pages 605-627, December.
    2. Rafael Wildauer & Stuart Leitch & Jakob Kapeller, 2021. "A European Wealth Tax for a Fair and Green Recovery," ICAE Working Papers 129, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    3. Wildauer, Rafael & Kapeller, Jakob, 2019. "Rank Correction: A New Approach to Differential Nonresponse in Wealth Survey Data," Greenwich Papers in Political Economy 26010, University of Greenwich, Greenwich Political Economy Research Centre.
    4. Kapeller, Jakob & Leitch, Stuart & Wildauer, Rafael, 2021. "A European wealth tax for a fair and green recovery," Greenwich Papers in Political Economy 31442, University of Greenwich, Greenwich Political Economy Research Centre.
    5. Philip Vermeulen, 2018. "How Fat is the Top Tail of the Wealth Distribution?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(2), pages 357-387, June.
    6. Klass, Oren S. & Biham, Ofer & Levy, Moshe & Malcai, Ofer & Solomon, Sorin, 2006. "The Forbes 400 and the Pareto wealth distribution," Economics Letters, Elsevier, vol. 90(2), pages 290-295, February.
    7. Davies, James B. & Shorrocks, Anthony F., 2000. "The distribution of wealth," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 11, pages 605-675, Elsevier.
    8. Kapeller, Jakob & Leitch, Stuart & Wildauer, Rafael, 2021. "Policy Brief: A European Wealth Tax," Greenwich Papers in Political Economy 32134, University of Greenwich, Greenwich Political Economy Research Centre.
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