Is it time for a UK wealth tax? Ambitious collaborative research programme launchedThursday 2 Jul 2020
CAGE and the Institute of International Inequalities at the London School of Economics launch a new research project to determine whether a UK wealth tax would be desirable and deliverable.
Across the world, the COVID-19 pandemic has exposed growing economic inequalities and stretched public services to their limits. Governments are now faced with the challenge to rebuild public finances without exacerbating the widening cracks in the social fabric the pandemic has exposed.
Boris Johnson has assured the UK that the Government won’t return to austerity, leading many to assume that tax rises are inevitable. A new research collaboration from CAGE and the International Inequalities Institute (III) asks whether the introduction of a wealth tax could provide a solution.
Proposals for improving tax policy in the UK have so far focused on reforming existing taxes on wealth. However, other countries have begun to raise the idea of introducing a wealth tax- a new tax on ownership of wealth (net of debt). No clear blueprint of how such a tax might operate currently exists.
In an ambitious project launched today, CAGE and the III have commissioned a series of evidence papers to study each of the key issues related to implementing a wealth tax. The project will draw on a network of world-leading experts including authors from CAGE (University of Warwick), the Centre on Household Assets and Saving Management (CHASM, University of Birmingham), LSE International Inequalities Institute, the Institute for Fiscal Studies (IFS), the Institute for Government (IfG), Ipsos Mori, the Organisation for Economic Co-operation and Development (OECD), the University of Oxford, and the Resolution Foundation, as well as legal and accounting practitioners from around the world.
An initial report setting out the key research questions for the project is launched today at an online event hosted by the Institute for Fiscal Studies. Speakers include Arun Advani and Emma Chamberlain, members of the project team, and Lord Gus O’Donnell, Cabinet Secretary and Head of the Civil Service, 2005-11.
Arun Advani said ‘There is increasing debate about whether a wealth tax could help the UK rebalance the books after the COVID-19 crisis. Capital incomes (that flow from wealth) are taxed less heavily than labour incomes and there are growing calls to address this. This research project will give policy makers the evidence they need to take a decision on whether a wealth tax is right for the UK.’
Lord Gus O’Donnell said ‘This project…is being led by a team with the essential mix of skills in economics, tax law and administration, that will be needed to craft a credible proposal. They are taking advice – through a series of evidence papers – from some of the world’s leading experts on tax policy. Whatever their recommendations, these papers and the final report should be required reading for my former colleagues in HMT and HMRC.’
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The rich pay more tax than ever- much some hand over more than others. Op Ed by Arun Advani and Andy Summers, published in the Times.