Economists and Campaigners Call on Rachel Reeves to Introduce Wealth Tax in First Budget
Chancellor Rachel Reeves is facing renewed calls for a wealth tax, with economists, climate campaigners and high net worth individuals urging her to introduce a tax on the UK’s wealthiest citizens to help fund essential public services and accelerate the transition to zero. .
In an open letter to the chancellor, prominent economist Thomas Piketty (pictured) and Gabriel Zucman have joined 29 organisations, including Greenpeace, Oxfam, and Unite the Union, in backing the proposal, which they say could raise more than £100 billion.
The signatories argue that the wealth tax will ensure that “the wealthiest people in our society contribute their fair share during the decade promised by the government to rebuild the country.” The proposed fine targets assets rather than income and has gained momentum as the chancellor prepares up to £40 billion of fiscal stimulus, mainly through tax rises, in his budget next week.
Greenpeace’s previous proposal for a temporary wealth tax of 2.5 per cent on assets over £10 million would affect fewer than 75,000 people, and estimates suggest it could raise at least £130 billion over five years. Economists agree that a one-time wealth tax may be more effective than a recurring annual tax, as it will reduce the chances of tax evasion through asset transfers or disposals.
The letter emphasizes that significant funding is available to address the UK’s pressing social and environmental needs. It notes that the combined wealth of the UK’s 250 richest families stands at £748 billion, and highlights that the carbon footprint of the richest 0.1 per cent is almost 12 times that of the average UK citizen.
Greenpeace’s Georgia Whitaker criticized the government’s recent decisions to limit winter fuel subsidies, saying that taxing the very rich should be debated rather than cutting support for vulnerable pensioners: “How can the government think that taxing the wealth of the richest in our society is too much. more controversial than reducing winter fuel payments for poor pensioners?”
On top of these calls, the councilor has stated that he does not plan to introduce wealth tax. Next week’s budget is expected to include tax increases in areas such as capital gains, inheritance, and employer’s National Insurance, as well as possible changes to fiscal rules to allow for increased government borrowing to fund public investment.
