Leading economists call for a wealth tax in the UK
Over 30 economists from leading UK and international universities have written an open letter throwing their weight behind the calls for a wealth tax in the UK. With Tax Justice UK and the Independent Commission for the Reform of International Corporate Taxation (ICRICT) , we’ve given our support to make sure their message is heard loud and clear. You can read the letter in the Guardian here, and see the full text and signatories below.
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We are living in an era defined by profound challenges from extreme inequality to climate breakdown, all of which are contributing to growing fiscal demands on the state in the UK and globally.
The UK – like many advanced economies – has seen wealth concentrated in fewer and fewer hands. Data shows us that a tiny minority of people now own an outrageously imbalanced share of the country’s wealth. Fewer than 50 families own more than 30 million people in the UK, while globally the richest 1% own more than 95% of humanity.
At the same time, more people than ever are reliant on food aid in the UK and wages don’t pay enough for the majority to do much more than scrape by and survive. This disparity is economically destabilising, undermining economic growth and proving fertile ground for the dangerous rise of right-wing populism.
Currently wealth is largely untouched by taxation – creating a system in which the richest continue to grow richer, enabled and subsidised by the tax system, public services and financial systems. Tax policy – from an annual wealth tax on the super-rich to greater taxation on wealth – can reshape the distribution of resources to tackle our greatest challenges and instigate growth in the economy. This isn’t a case of uncontrollable natural forces dictating something, but political choices that can be made and remade in order to rewire the system.
A modest net wealth tax on assets over £10m could raise enormous sums of money. This would affect a small minority of people, and the tens of billions of pounds in revenue can be reinvested in healthcare, education and infrastructure, alongside tackling climate breakdown to build a stronger, more resilient economy. That only a small number of people would pay it isn’t a weakness in the policy, but a magnifying glass on the extreme inequality of wealth in the country.
In centuries gone by, critics claimed income tax was too technical or difficult to implement and administer. The same arguments are being used now about a wealth tax, while income tax has become a given. These arguments shouldn’t stop us now and history should embolden our resolve.
Lessons can be learned from how wealth taxes have been designed in other countries, while digital technology and enhancing financial transparency increase their viability. Starting at the Autumn Budget the pieces of the puzzle – from consultation to design – can be collected to allow the government to roll out a wealth tax within this parliament. This could improve people’s lives in years to come and avoid austerity for key services we all benefit from.
Keir Starmer and Rachel Reeves can build a tax system fit for the 21st century – that promotes fairness, first-class public services and good living standards for everyone. We cannot allow extreme wealth inequality to deepen while millions of people are consigned to struggle for basic quality of life.
A progressive wealth tax is a critical step forward, and one that we urge the UK government to take.
Sincerely,
Thomas Piketty, Paris School of Economics
José Antonio Ocampo, Professor, School of International and Public Affairs, Columbia University,
Jayati Ghosh, Professor of Economics, University of Massachusetts Amherst,
Professor Ha-Joon Chang, Research Professor, SOAS, University of London
Martín Guzmán, Professor, Columbia University.
Léonce Ndikumana, Professor of Economics, University of Massachusetts Amherst
Valpy Fitzgerald, Professor, University of Oxford
Ricardo Martner, former Chief of the Fiscal Affairs Unit of CEPAL/ECLAC
Dr Radhika Desai, Department of International Development, London School of Economics
Dr Benjamin Tippet, Kings College London
Rafael Wildauer, Associate Professor Economics, University of Greenwich
Dr Andrew Denis, Fellow emeritus in political economy, City St George’s, University of London
Dr Devika Dutt, King’s College London
Prof. Roberto Veneziani, Professor of Economics, Queen Mary University of London
Dr Alexander Guschanski, Associate Professor Economics, University of Greenwich
Dr. Engin Yılmaz, Associate Professor Economics, Political Economy Research Institute (Research Scholar)
Professor Jamie Morgan, Leeds Beckett University
Dr. M. Kerem Coban, SOAS, University of London
Professor Alfredo Saad Filho, Queen’s University Belfast
Professor Hulya Dagdeviren, University of Hertfordshire
Dr Riccardo D’Orsi, Lecturer in Economics, Birmingham City University
Professor Josh Ryan-Collins, UCL Institute for Innovation and Public Purpose
Professor Francisco H. G. Ferreira, International Inequalities Institute, London School of Economics
Professor Chris Holden, School for Business and Society, University of York
Professor Gary Dymski, University of Leeds
Dr. Paul Auerbach Kingston University, School of Economics
Luis Buendía, Associate Professor of Public Economics, University of León
Jose A. Pérez-Montiel, Associate professor of economics, University of the Balearic Islands
Andrew Kilmister, Senior Lecturer in Economics, Oxford Brookes University
Dr Thomas Rabensteiner, Lecturer in Economics, University of Greenwich
Dr. Joel Rabinovich, Lecturer in International Political Economy, King’s College London
Professor Susan Newman, The Open University
Assistant Professor Dr. Kerstin Hötte, KEDGE Business School
Dr Sophie van Huellen, University of Manchester
Roberto Ruiz Blum Economist, PhD Student, Coordinator, Rethinking Economics Ecuador
Prof. Sue Konzelmann, Birkbeck, University of London
