Prime Highlights:

• More than 30 of the world’s top economists, including Thomas Piketty, have called for the UK government to impose a wealth tax on ultra-high net worth individuals.
• The tax would raise billions yearly and pay for public services as it tackles inequality.

Key Fact:

• The tax would be applied to assets worth over £10 million, which would impact only roughly 0.04% of individuals.
• £10–22 billion per year in revenues, as economists estimate, are being targeted to improve public finances.

Key Background:

A group of leading world economists called on Prime Minister Keir Starmer and Chancellor Rachel Reeves to make a new UK wealth tax on the richest families. It is suggested that it should tax individuals with more than £10 million and generate huge sums of money and combat grotesque inequality.

The open letter, signed by respected economists like Thomas Piketty, Jayati Ghosh, and Ha-Joon Chang, contends that the tax would raise £10 billion to £22 billion per year. The advocates state that the policy would only affect the wealthiest 0.04% of people and is thus a reasonable and equitable way to fund public services and avoid further austerity.

While the tax is seen as a progressive relief of the budget strain by campaigners and economists, opposition within the government does prevail. Chancellor Reeves has tiptoed around this, with the resistance of senior ministers like Business Secretary Jonathan Reynolds, who had found the proposal too costly and warned against administrative cost and possible capital flight. The plan was also criticized by the Institute for Fiscal Studies, where it argued that the replacement of the current taxes imposed on dividends, inheritance, and capital gains would be more effective. International experience varies.

Wealth taxes that work are found in Spain, Norway, and Switzerland, but Germany and Denmark removed them because of issues of pricing assets and enforcement. But the advocates contend that with more fiscal transparency and availability of computer programs nowadays, these constraints are overcome. The government is being urged by economists to include a consultation in the autumn budget and defend the wealth tax as necessary to render the UK economy more resilient and beat growing fiscal concerns.

Read More : Impacting Cities, Classrooms, and Crisis Response: Dr. Richard Larson’s Lifelong Mission in Innovation