A 2% levy on fortunes above £100m, with no exemptions, could begin to reverse decades of rising inequality, according to economist Gabriel Zucman. His proposal, detailed in his book We Need to Tax Billionaires, has gained traction as Labour leadership contenders Andy Burnham and Wes Streeting hint at taxing the wealthy.
Research shows that while 99% of people pay 40% to 50% tax on income, billionaires pay at most 25%. The top 200 families in the UK now own the equivalent of 22% of GDP, up from 5% in 1989. Zucman argues that a simple 2% tax on assets above $100m could address this imbalance.
To prevent tax avoidance, the UK could consider a law that treats long-term residents as continuing residents for tax purposes for five to ten years after they leave. This would counter threats from the super-wealthy to move abroad.
Proponents argue that entrepreneurs benefit from state-funded infrastructure and workers' skills, and should contribute more. The tax is supported by several Nobel prize-winning economists, and could reduce the need for tax increases on the middle and professional classes.
