Economic researchers have presented a proposal for implementing a wealth tax targeting the UK’s wealthiest households, suggesting the measure could generate substantial revenue while maintaining administrative feasibility. The proposal, developed by academics Gabriel Zucman of the Paris School of Economics and University of California, Berkeley, and Ben Tippet of King’s College London, would impose a 2% minimum charge on households with assets exceeding £100m. According to the study, this threshold would affect fewer than 1,000 of the richest UK households.
Prime Minister Andy Burnham has indicated that a wealth tax could form part of his 10-year economic strategy, though his advisers have alternatively focused on raising capital gains tax thresholds to align with income tax rates. Burnham recently stated his preference for implementing tax changes in a manner perceived as equitable and fair, while avoiding creating societal divisions. He plans to present his comprehensive tax and spending proposals later this week.
The researchers argue that their proposal addresses historical criticisms of wealth taxes by targeting only the most affluent segment of the population rather than implementing a broad-based system. The tax would require HM Revenue and Customs to assess accumulated wealth across property, private businesses, pension holdings, artwork, land, and charitable assets under individual control. The proposal includes provisions requiring wealthy families to continue paying the tax for at least 10 years after relocating outside the UK, thereby preventing tax avoidance through relocation.
Academics contend that limiting the tax to extreme wealth concentrations would mitigate common administrative challenges associated with broader wealth taxes. Tippet noted that HMRC already conducts wealth calculations for regulatory purposes, making implementation relatively cost-effective. The report emphasizes that previous European wealth taxes failed partly due to low thresholds affecting large populations and exemptions that created avoidance opportunities, whereas this proposal would apply to a narrow, high-wealth cohort with minimal exemptions.
Global interest in wealth taxation has intensified amid rising inequality concerns. In 2024, multiple nations supported proposals for a 2% minimum tax on billionaire wealth, while recent international discussions have highlighted concerns about inherited wealth concentration accumulating across generations.