The UK government is facing fresh pressure to introduce a wealth tax targeting the super-rich, with a new report proposing a 2% levy on assets exceeding £10 million. The proposal, outlined by the thinktank Compass, would apply to approximately 22,000 individuals—just 0.03% of the population—and could generate £24 billion annually for public services.
Compass Report Calls for Fairer Taxation
Compass, led by Neal Lawson, a key ally of Greater Manchester Mayor Andy Burnham, published the report titled Better!, arguing that the UK's tax system is "stacked in favour of the super-rich, fuelling inequality." The report claims that public services, utilities, and workers are being exploited by the wealthiest, who amass vast fortunes while paying minimal taxes.
The proposal has gained traction amid growing public support for higher taxes on the wealthy. Polling conducted by IPPR and Patriotic Millionaires UK reveals that 75% of the public and 80% of UK millionaires themselves want the wealthiest to pay more. Furthermore, respondents indicated they would be more likely to vote for a party that commits to increasing taxes on the super-rich to invest in public services.
Details of the Proposed Wealth Tax
Under the Compass plan, a 2% annual wealth tax would be levied on net assets above £10 million. This would affect roughly 22,000 individuals, raising £24 billion each year. The figure represents a significant revenue stream that could be redirected to bolster healthcare, education, and infrastructure.
The report warns that current systems are rigged to serve the rich and powerful. "The honesty of our media, the fairness of our taxes and the value of our votes are three crucial foundations for building a society where we can all flourish," it states. "But all three are currently set-up to serve the rich and powerful rather than all of us."
Public Sentiment and Political Implications
The polling data suggests widespread appetite for tax reform, even among the wealthy. With 80% of millionaires backing higher taxes on themselves, the report argues that political parties could gain electoral advantage by championing such policies. It notes that only in certain constituencies do voters hold significant sway, and those voters are often targeted by billionaire-owned media, which deflects blame for economic woes onto marginalised communities.
"While attention is diverted on blaming the least powerful, the super wealthy extract value from those same public services, utilities and workforce - amassing vast, undertaxed wealth," the report adds. "And the immense power and persuasion at their disposal is directed to killing proposals for a more equitable society, such as more progressive taxation."
Reaction and Next Steps
The proposal has yet to receive an official response from Downing Street, but it aligns with ongoing debates about wealth inequality in the UK. Campaigners argue that the £24 billion raised could transform public services, while critics warn of potential capital flight and economic disincentives.
As the Labour government considers its fiscal strategy, the Compass report adds to mounting evidence that voters are ready for bold action on wealth distribution. Whether the Treasury will adopt such a measure remains uncertain, but the pressure is mounting ahead of the next budget.
