Let’s talk about wealth taxes. Not income tax. Not inheritance tax. I’m talking about a levy on total net assets, including things like property, investments, luxury items, and savings.
The idea sounds simple enough: tax the accumulated assets of the wealthiest people, not just what they earn each year. In theory, it’s a way to tackle inequality and raise funds for things like healthcare, education, or climate action.
The UK already taxes wealth in some ways, through capital gains, inheritance tax, and council tax. But a formal wealth tax would be something new. And it’s an idea that’s picking up steam.
If we’re going to talk about this seriously, we must go beyond the headlines and dig into what it would take to make something like this work in the UK, and whether it’s worth the trouble.
The Case For It
A typical proposal focuses on a modest wealth tax targeted at the ultra-rich, individuals with more than £10 million in assets. It might apply a 1 or 2 % tax annually on anything above that threshold, according to some estimates, that could raise around $31 billion a year in the UK.
That’s a huge number on paper. But here’s the thing: that figure is based on models and assumptions. In reality, enforcement won’t be perfect, and some wealth will inevitably be hidden, undervalued, or moved out of reach.
Still, even if the actual amount raised falls short, it could go a long way in helping fund things like the NHS, affordable housing, education, or climate infrastructure.
The appeal is clear. The UK has seen a sharp rise in wealth concentration. In 1990, there were just 15 billionaires. By 2023, that number had grown to 171, with each holding an average of £4 billion. At the same time, more households are struggling to cover essentials, and frontline services are under enormous strain.
There’s also a widespread feeling that the system is tilted. Working people are taxed on every paycheck, while large fortunes can sit mostly untouched. A wealth tax feels like a way to rebalance things, even slightly. And polling suggests the public agrees. Around three-quarters of people support a small tax on wealth above £10 million.
Some supporters also see a role for a wealth tax in tackling climate change. By targeting high-carbon luxury assets, such as yachts or private jets, it could shift incentives while generating funding for green infrastructure.
Of course, it’s not all straightforward.
A wealth tax sounds simple until you try to design one. One challenge is how you define and measure wealth. Unlike income, which is relatively straightforward to track, some assets, like property or stocks, have a clear market price. Others, like rare art or shares in a private company, are far trickier. That opens the door to disputes, loopholes, and avoidance, not to mention the cost of actually enforcing it all.
Designing a tax that can fairly and efficiently capture that without being gamed by lawyers and accountants would be no small task.
Would the Wealthy Really Leave?
There’s a fear, or at least the threat, of a wealth exodus. If the government imposes a new tax on the ultra-wealthy, could they just leave? Some headlines already claim that thousands of millionaires fled the UK in 2024. But when you dig into the numbers, the supposed “exodus” was just 0.3 % of those with over £1 million in assets. That’s not nothing, but it’s hardly a flood.
What’s more, the evidence from other countries suggests that tax alone is rarely the reason wealthy people choose where to live. Lifestyle, security, education, and family tend to weigh more heavily. In places like Scandinavia, similar taxes led to minimal departures, and those countries still have thriving economies.
That said, it would be naive to think there’s no risk at all. Even if just a few very wealthy individuals leave, their departure could have ripple effects. Not necessarily in tax revenue, but in investment, job creation, and philanthropy. In a connected global economy, money can move faster than any tax authority can keep up with. If enforcement costs spiral, or if people find legal ways around the rules, the tax could end up raising far less than expected.
So where does that leave us?
A UK wealth tax is possible. But it wouldn’t be easy, quick, or clean. That’s why any wealth tax would need to be well-designed, with clear rules and good enforcement. Most importantly, it would need to be realistic about how wealth works, how it moves, and how creative people can be when they want to avoid taxes.
Still, the gap between rich and poor continues to grow, and public services are under enormous strain. In that context, asking those with extreme wealth to contribute a little more doesn’t seem unreasonable. Done right, it could be a tool to help rebalance the system, even if it’s not a fix-all.
