Taxes are at record highs; satisfaction with public services at rock bottom. It’s a dichotomy familiar to us all from our own private focus groups, be that the street WhatsApp community or the bowling club.
Alongside this, wealth is rising exponentially while wages are not: from 2000 to 2025, for example, average weekly earning rose just over 100% while property prices went up by about 240%.
According to the British Social Attitudes Survey, the segment of the public who say the government should further increase taxes to spend more on health, education and welfare is at its lowest level in over a decade, at 36%.
Aditya offers me a quote from Jean-Baptiste Colbert, the minister of finances under King Louis XIV of France: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”
“This has become harder to do as the tax burden has got higher,” Aditya tells me. “And so wealth taxes have really emerged as an attractive option to people in government, and to campaigners, not just here, but around western Europe and in America too.”
What is a wealth tax and how would it work?
Most advocates, when they talk about a wealth tax, mean an annual tax on assets over a certain threshold. The Green party of England and Wales, for example, proposes an annual tax of 1% on assets above £10m and 2% on those above £1bn, estimating it could raise almost £15bn a year.
The campaign group Patriotic Millionaires – a bunch of likable sorts including Gary Lineker, Brian Eno and Val McDermid – suggests a 2% annual tax on total net wealth exceeding £10m, projecting revenue of £24bn a year. Oxfam, which is campaigning alongside them, says this rate would affect 20,000 people – about 0.04% of the UK population – and highlights polling carried out this May by YouGov, which found 76% of the public support “this fair wealth tax”.
Campaigners present this as a slam dunk – minimal hissing for maximum feather. But dig into that polling a wee bit further and you’ll find the YouGov tracker poll, which instead indicates that Britons, over the past seven years, have a baseline preference for taxing income, rather than assets. It seems that, while the public are attracted to the concept of a wealth tax, they’re pretty selective about how wealth is defined.
Why not start plucking?
Critics of a wealth tax, in the right-of-centre thinktanks and the publications that report on them, argue that taxing the same wealth every year would penalise saving and investment; that a specific wealth tax would require expensive and unwieldy new administrative apparatus to value wealth; that focusing on the super-rich to raise revenue would make the UK a less attractive place for those people to work and invest.
Aditya may not share their ideology, but he has his own reasons for being sceptical about current wealth tax campaigning, which he argues “offers apparently easy solutions, which will always affect someone else and never me”.
Crucially, he says, if you’re running the government, the money raised by an annual wealth tax doesn’t make much dent in your bills, relatively speaking. The highest estimate is less than a third of the £80bn the UK government is planning to spend on defence annually by the end of the decade. And, once a tax is in place, so the dodges begin. “The one thing that the wealthy have in droves are advisers to show you how to avoid taxes.”
“It doesn’t mean you shouldn’t do it,” he adds, “just don’t oversell it as a magic bullet.”
What’s this about a one-off wealth tax?
So with that bubble burst, Aditya points us to what he considers the most substantial piece of work done on wealth taxes in the UK to date. A couple of academics and a tax barrister came together during Covid lockdown, when the rest of us were struggling with the recipe for banana bread, to form the independent Wealth Tax Commission.
They propose a one-off wealth tax, arguing that its fairer because it targets people with the most ability to pay, is very difficult to avoid and wouldn’t distort behaviour because it’s one-time only. Accounting for behavioural responses and admin costs, they estimate this would raise a total of £260bn at a rate of 5% over £500,000 per individual, payable at 1% per year over five years.
To be clear: this would be paid by individuals whose total wealth after mortgages and other debts, and after splitting the value of shared assets such as a jointly owned family homes, exceeded the tax threshold, and only on the value of wealth above that threshold. For example, a wealth tax levied at 1% above £500,000 would require a couple to have net wealth of more than £1m before any wealth tax would be payable.
This is where Aditya gets excited: “£260bn is more than we get from income tax in a year. It would be transformative – you could put it in a sovereign wealth fund and invest in renewables. Or you could put it directly into the NHS and schools.”
It would, however, affect a very different tranche of the population – those de facto millionaires with property in desirable parts of Edinburgh or Manchester or London.
And that’s where the hissing starts up again.
Are there other ways to tax wealth?
We’ve heard it many times before over other proposed taxes on wealth: Rachel Reeves reversed her plans to end inheritance tax breaks for farmers after lobbyists drove tractors up to the doors of parliament and drowned out speeches with their horns. When Ed Miliband proposed a mansion tax on properties valued over £2m, to raise £1.2bn annually for the NHS, in his 2015 manifesto, he was eviscerated by the rightwing media, party critics and Myleene Klass, who confronted him in a TV debate, arguing the tax wouldn’t just touch the super-rich but would devastate “little grannies” who bought modest London homes that had simply skyrocketed in value over the decades.
But times change, don’t they? And Reeves was able to avoid a similar backlash when she introduced a similar council tax surcharge on properties worth £2m or more at the last budget.
The Institute for Fiscal Studies has argued consistently that, rather than introduce a new wealth tax, the government should sort out the mess of current capital and property taxes. In May, Wes Streeting received a mixed reception when he proposed equalising capital gains with income tax, as part of his brief tilt at Labour leadership, describing it as a “wealth tax that works”. And of course, HMRC could get better at collecting tax from the super-rich: its own estimates suggest that at least £2.1bn extra could be raised from closing the wealthy tax gap.
The trouble with getting more granular on wealth taxation, Aditya says, is that many of the groups affected – whether that’s farmers, lawyers or GPs in partnerships – are also very well-networked and good at making a noise about the specific unfairness of targeting them as opposed to others.
Which takes us back to the more subtle point about burden-sharing and democracy that underlies his arguments: by focusing on the billionaires in the corner, we avoid looking at the millionaires in the mirror – and having an honest conversation about what wealth is and how sophisticated those who have it are at lobbying against further taxes on it.
An annual wealth tax has so much support right now because “it’s very politically palatable”, Aditya says. “It will poll brilliantly for you, because everyone will say that won’t affect them”.
His advice is to pivot, philosophically: “Forget about the wealthy. Think about wealth.”
Protesters campaigning for a wealth tax outside parliament ahead of the budget in November 2025. Photograph: Guy Smallman/Getty Images
