A Wealth Tax Must Be Sold As Wartime Unity – Not Elite Punishment

The recent mainstreaming of wealth taxes as a political tendency in the UK has demonstrated an appetite for solutions to inequality. Although there have been successful debates, won with logic as much as rhetoric, a tangible wealth tax policy is still in its infancy. 

The Green Party, the main policy vehicle for the Wealth Tax, is seeking between 1% and 2% of tax on assets held over £10 million per annum. Yet who exactly pays, and how they pay, remain unanswered questions. We are drawing closer to the time when steadfast answers are needed, not just electorally but in practical terms.  

Any policy begins by translating “wealth” into “financial asset”, i.e., holding control but not necessarily legal ownership over wealth, so that accountants can understand the tax in their own terms. Detractors have then usually asked – how is the state to accurately determine asset valuations at a granular level over such a quantity? 

It cannot be done accurately is the answer, although detractors must know this already. Regardless of whether it is one asset under consideration or thousands, multiple drivers can alter valuations, even on a micro-level. Valuation can be done optimally, however. 

We then move to the data. We know that roughly 22,000 people sit above the £10 million threshold identified in the UK, and 84% of them are UK-based residents. When we consider the small number (equal to the population of Staines), the identification, assessment and enforcement by HMRC and relevant agencies becomes far less of a challenge. 

We also know that mass capital flight is less of an issue than presented. Any capital flight that does take place will be initiated by a small number, and they will use murky transfers of asset control via shell company strings into offshore trusts. Others who do not wish to do so will use tax planning methods such as offsetting or gift and pension deductions to lower tax liabilities. 

These are both intensely difficult measures to combat. They are legal, if questionable, and require lots of data collection and international cooperation to respond to. Whitehall and our international partnerships as they are cannot fully support this response.

The Greens must consider the resource-constrained environment and think about how to stopper problems before they arise. Two solutions are to focus on clearer political messaging and reframing the message itself. 

I propose the former because the current populist message, invoking general ideas of “rip-off Britain” being controlled by a wealthy elite, confuses older middle classes who consider themselves part of the wealthy elite and perceive a threat. 

I propose the second solution because the current message of the wealth tax comes across as solely punitive. That explicitly punitive message will provoke diplomatic consequences and coercive responses from holders associated with OPEC, America, China, or Serious Organised Crime who fall above the threshold.

Instead, the communicated purpose needs to define clearly who will be targeted (those over the £10 million tax threshold), and to gently reframe the purpose of the tax away from “Class Warfare” to one of “National Unity”. 

The message must invoke a threatening “Other” external to the entire realm, to make paying the tax seem not merely obligatory but highly honourable. We have numerous “Others” already: Putin’s government, the CCP, or the new American oligarchy.

The message must highlight the existential consequences of failure to pay the tax. Failure to assist with a “Unity Tax” guarantees the breakdown of critical systems such as social care, disaster response, cybersecurity, counterespionage, and justice. 

The policy itself cannot be introduced in isolation. In other words, it cannot generate revenue to fund day-to-day spending, or even specific departmental capital spending. The 1916 Defence of the Realm Act was acceptable in allowing the state to requisition property, because it was explicitly for military purposes, for example. 

Given the threats faced by everyday British and Irish communities, revenue from that “Unity Tax” should be directed to support a well-communicated, correctly framed strategy of developing local resilience and prevention hubs, small businesses, and localised green-energy production facilities. 

It is easier said than done. The main challenge facing the Greens and/or Labour is the gradual transition from current messages of radical populism or “securonomics” to a message invoking the spirit of wartime unity, without causing unintended consequences.

Image: Flickr/Leonard Bentley

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