The trade union body has set out options for taxing the small number of individuals with wealth over £3 million, £5 million and £10 million
A modest wealth tax on the richest 140,000 individuals in the country could raise more than £10bn to help pay for public services, according to the Trades Union Congress (TUC).
With the country’s public services in a dire state and with the Tories repeatedly using excuses about not having enough money to invest in them, the TUC has set out a clear plan for how further money could be raised, by taxing the wealthiest 0.3% of the UK population, as it called for a “national conversation about taxing wealth”.
The trade union body has set out options for taxing the small number of individuals with wealth over £3 million, £5 million and £10 million, excluding pensions. It says that the options are illustrative examples of what a wealth tax could look like, using Spain’s existing policy as a potential model.
It proposes the following:
- A wealth threshold of £3 million with a marginal tax rate of 1.7% would yield £2.7 billion (with the tax payable on wealth above £3 million by 142,000 individuals or 0.27% of adults in the UK)
- A further wealth threshold of £5 million with a marginal tax rate of 2.1% would yield an additional £3.2 billion (with the tax payable on wealth above £5 million by 48,000 individuals or 0.09% of adults in the UK)
- A further wealth threshold of £10 million with a marginal tax rate of 3.5 % would yield an additional £4.6 billion (with the tax payable on wealth above £10 million by 17,000 individuals or 0.02% of adults in the UK).
The tax would apply as a marginal rate on wealth and assets above each threshold – in the same way income tax works. For example:
Someone with £3 million wealth would pay nothing.
Someone with £4m wealth would pay tax on £1m of their wealth – paying £17,000.
Someone with £9m would pay tax on £6m of their wealth – paying £118,000
TUC General Secretary Paul Nowak said: “It’s time to start a national conversation about how we tax wealth in this country.
“It is absurd that a nurse pays a bigger share of their income in tax than a city trader does on profits from their investment portfolio.
“That’s not only fundamentally unfair and unjust – it’s bad for our economy too.
“Our broken tax system means those at the top are hoarding wealth and getting richer and richer, while working people struggle to get by.
“That is starving our economy of spending – as it’s working people who spend their money on our high streets – and it’s starving our public services of much-needed funds.
“This research sets out potential options for getting those with the broadest shoulders to pay a fairer share.”
Basit Mahmood is editor of Left Foot Forward