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The case for a progressive annual wealth tax in the UK

The case for a progressive annual wealth tax in the UK

Tippet, Benjamin ORCID: 0000-0002-6345-9922, Wildauer, Rafael ORCID: 0000-0001-6395-6286 and Onaran, Özlem ORCID: 0000-0002-6345-9922 (2021) The case for a progressive annual wealth tax in the UK. [Working Paper] (Unpublished)

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Abstract

This paper analyses the revenue potential of a progressive annual net wealth tax in the UK. A progressive net wealth tax is a tax on the stock of net wealth that is designed to raise revenues primarily from the wealthiest households. We present a baseline progressive net wealth tax that only taxes the top 1% wealthiest households. Households with net wealth above £3.4 million (the top 1%) are taxed at a marginal rate of 1%; above £5.7 million (the top 0.5%) at a marginal rate of 5% and above £18.2 million (the top 0.1%) at a marginal rate of 10%. We estimate that this tax would raise roughly £70-130 billion a year after administration costs and tax avoidance/evasion: £70 billion if 50% of the tax is evaded and £130 billion if 15% of the tax is evaded. This is equivalent to roughly 9-16% of total tax revenues taken by the UK government each year.

Item Type: Working Paper
Uncontrolled Keywords: wealth inequality, wealth tax, fiscal policy
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
Faculty / School / Research Centre / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA)
Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC)
Last Modified: 20 Sep 2021 16:05
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
Selected for REF2021: None
URI: http://gala.gre.ac.uk/id/eprint/33819

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