Rich List 2021: results will renew debate on wealth tax in Britain

Analysis: times are changing as IMF says wealth taxes must rise to pay for pandemic costs and Joe Biden says trickle-down economics don’t work

The 2021 Sunday Times Rich List will renew debate over how to prevent Britain’s position as one of the most unequal societies in the developed world from getting worse.

Those who argue for a wealth tax would usually face a withering response from the major international bodies that analyse the effects of taxation on economic growth. In previous decades a neoliberal consensus demanded wealth creators be given free rein, while everyone should accept that the extraordinary lifestyles of the super-rich was the price of innovation and decently paid jobs for the rest. In the 1990s the Clinton and Blair administrations felt unable to confront the proselytisers for trickle-down economics.

Times have changed. The Organisation for Economic Co-operation and Development, the Paris-based club of mostly rich nations, was once an honorary member of the neoliberal club alongside the International Monetary Fund.

Since the 2008 financial crash it has argued that wealth taxes need to rise unless governments are prepared to forgo sustainable economic success. It repeated the warning earlier this month, predicting that social unrest would erupt unless the rich were made to pay more.

Last year the IMF dropped its long-held opposition and said wealth taxes need to rise to pay for the costs of fighting the pandemic. And then in March, President Biden said that trickle-down economics didn’t work as he laid out plans for higher income taxes on those earning more than $400,000 (£282,000) and a 43.4% capital gains charge on taxpayers with incomes over $1m.

In the UK, capital gains tax is 20% regardless of the taxpayer’s income, unless they are selling a property other than their own home, in which case it is 28%. Inheritance tax is charged at 40%, but there are large loopholes for those with assets in trusts and £1m of property can be passed on tax free.

No wonder there are demands in the UK for higher wealth taxes. So far the Johnson administration has been deaf to those calls.


Phillip Inman

The GuardianTramp

Related Content

Article image
Hundreds join growing list of Britain's ultra-rich
Fortunes of already wealthy people grow much faster than that of general population

Rupert Neate Wealth correspondent

18, Oct, 2018 @4:31 PM

Article image
Millionaires petition Rishi Sunak to introduce wealth tax
Open letter demands that recovery from pandemic is not paid for by ‘care workers, street cleaners and teachers’

Rupert Neate Wealth correspondent

24, Oct, 2021 @11:01 PM

Article image
Has the time come for a wealth tax in the UK? | Richard Partington
Taxing the rich will address inequality and secure the welfare state’s future. It’s a Tory peer’s call, and he’s right

Richard Partington

04, Mar, 2018 @12:45 PM

Article image
Economic cost of Covid crisis prompts call for one-off UK wealth tax
Tax experts and economists outline ‘fairest, most efficient’ way to repair public finances and quickly raise £260bn

Richard Partington Economics correspondent

09, Dec, 2020 @12:01 AM

Article image
IMF: higher taxes for rich will cut inequality without hitting growth
Analysis supports tax strategy of Jeremy Corbyn’s Labour in UK – and undermines that of Donald Trump in US

Larry Elliott and Heather Stewart

11, Oct, 2017 @1:30 PM

Article image
IMF boss says raise taxes on the rich to tackle inequality
Kristalina Georgieva calls for rethink of economic policies to better help those left behind

Larry Elliott Economics editor

07, Jan, 2020 @5:36 PM

Article image
World's witnessing a new Gilded Age as billionaires’ wealth swells to $6tn
Not since the time of the Carnegies, Rockefellers and Vanderbilts at the turn of the 20th century was so much owned by so few

Rupert Neate Wealth correspondent

26, Oct, 2017 @3:48 PM

Article image
Fit for an oligarch: school for the super-rich opens in London's Mayfair
Eaton Square upper school offers neoclassical classrooms in a Grade 1-listed building and fees to suit London’s bankers and aristocrats

Rupert Neate Wealth correspondent

21, Jul, 2017 @1:03 PM

Article image
What will be in Rishi Sunak's 2021 budget?
Expect measures to help economic recovery but watch out for capital gains tax and other tax rises

Phillip Inman and Richard Partington

27, Feb, 2021 @6:00 AM

Article image
Make UK super-rich pay one-off wealth tax, says Fabian Society
Labour MP Dan Jarvis backs call for levy on richest 0.1% to help cut deficit and protect public services

Phillip Inman Economics correspondent

12, Jun, 2016 @3:47 PM