Wednesday, February 05, 2020

Time for a wealth tax

Over on The Good Society, Max Rashbrooke suggests that its time to start directly taxing wealth:

A wealth tax would be levied on net wealth – that is, the value of people’s assets once their debts have been subtracted.

Such a tax would be highly redistributive. Levied at 1% on wealth over $1 million, it would affect only the wealthiest fifth of the country. And it would generate around $6 billion a year. Even a more modest version, starting for instance at $2 million, would generate billions of dollars a year to fund public services, help those who are struggling get back on their feet, and protect the environment.

(Rashbrooke's full paper on the topic is here).

Its a good idea. Asset-rich people often pay very low rates of income tax, so this ensures they pay their fair share. It also provides an incentive for them to put that wealth to work, so it provides a return, rather than just letting it pile up like a pyramid of skulls. And, most obviously, it will help reduce inequality.

But would Labour ever do it? Sadly, given their chickenshitting over the capital gains tax, I doubt it. Instead they'll just continue mouthing platitudes about inequality and how its bad, while doing absolutely nothing to fix it.