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hi I'm here to tell you why a wealth tax
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won't work yes something is wrong the
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system has clearly failed a lot of
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people approximately 43% of the UK's
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wealth is owned by the richest 10% of
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households now I grew up in the care
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system and I spent time in an orphanage
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and I'm one of 11 children my brothers
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and sisters are all workingass so yes I
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understand the sentiment behind the
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calls for a wealth tax and I understand
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the passion with which activists like
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Gary Stevenson speak when they advocate
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higher taxes on the rich in the name of
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social justice it's easy to want to tax
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people more especially when they're
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wealthy but I've also studied economics
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and mathematics i worked for 5 years at
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the central bank in Australia and while
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my heart sympathizes my head and my
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experience tells me that a wealth tax
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simply won't work there's been talk of
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charging say 2% on fortunes above say 10
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million it sounds bold urgent and at
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first glance it sounds fair but it's the
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kind of policy that reflects how
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polarized our world has become it's the
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sort of thing Donald Trump would do if
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he were a left-wing politician it's
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emotionally satisfying but it's
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economically flawed the first problem is
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practical and concerns implementation
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it's not easy to define identify value
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and enforce a tax on wealth how much is
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a piece of art worth an unlisted
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business a farm these things don't sit
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on the stock exchange with an easy price
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tag valuing them accurately is difficult
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intrusive and expensive it would take an
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army of tax inspectors and accountants
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to even attempt it then comes the issue
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of liquidity if someone owns a farm or a
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house worth 10 million but has little
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cash flow how do they pay the tax sell
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their home their business it's not a
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theoretical problem it's a very real
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problem i was once investigated by the
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tax department my taxes were in order
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but it still cost me a fortune in fees
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that kind of disruption multiplied
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across thousands is not just inefficient
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it's destructive next is the question of
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behavior a common mistake is to
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calculate the revenue from a wealth tax
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without considering how people will
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react the wealthy are by definition
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mobile i've seen estimates that there
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are around 25,000 people in the UK with
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over 10 million with the recent changes
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to non-dom tax relief around 10,000 have
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already left it's easy to imagine
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thousands more doing the same if a
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wealth tax is introduced plenty of
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countries are opening up roots for the
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mega rich leaving the UK and when they
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go so does the tax revenue and they may
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not come back i know people wealthier
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than me who are leaving just the VAT
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they pay each year probably funds a
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handful of teachers and they don't use
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the NHS or government schools meanwhile
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countries like Portugal and Italy are
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offering tax breaks to attract the very
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people we're pushing away you don't have
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to like them but you do have to consider
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their impact on the economy once
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introduced a wealth tax won't go away
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inflation will erode thresholds and
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successive governments will be tempted
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to widen its scope we've seen the same
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happen with inheritance tax and history
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gives us plenty of warning wealth taxes
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were once common but most countries
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abandon them because they were too hard
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to implement and they raise little
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revenue spain's wealth tax brings in
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less than£500 million a year france
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tried one and saw capital flow leaving
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we should aim to be more like Singapore
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rather than like Spain now about the
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bigger picture i agree the system feels
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broken but a wealth tax won't fix the
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root causes productivity per person
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hasn't grown despite amazing
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technological advances fewer people want
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to work social media has replaced
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religion as a dominant narrative but
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while religion preached discipline and
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effort social media often glorifies easy
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living and whereas a dream for young
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people home ownership used to be the
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goal now it feels out of reach a wealth
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tax won't increase the housing stock in
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fact it may do the exact opposite that's
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a planning and supply issue not a
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taxation one if you want to reduce
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inequality let's start by being smarter
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with the money that we already spend
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politicians argue about black holes and
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unfunded commitments but the picture
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remains largely the same whoever's in
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charge everinccreasing spending with
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uncertain outcomes we need transparency
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efficiency and long-term planning so yes
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the frustration is real the inequality
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is real but a wealth tax is not the
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solution let's use our heads not our
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hearts what I'd like to see is we've all
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heard about this 20 billion pound hole
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in the finances which we found out about
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just after the election result i'd like
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an inquiry to to know where that money
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went someone's lying i want to know
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where that 20 billion went and what it
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was spent on and whether there really is
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a hole if the UK was a company we would
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be getting real-time information on our
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expenditure we wouldn't be getting a
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surprise two or three years later about
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the state of the finances the other
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thing I want to see is non-doms there's
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talk of non-doms leaving i want to see
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the information the tax department has
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the information therefore the government
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has the information how many noms are
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leaving we've just had the end of the
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tax year and what is a true estimate of
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what they used those people used to add
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to the economy i don't want to kick
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people out because I don't like them i
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want to do what's best for the economy
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so if it's good to have non-doms and
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that's why other countries are trying to
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pinch our non-doms change the policy and
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keep them here if they're not adding
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anything fine let them go but let's do
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it with information and make that
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information public and as I say the 20
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billion hole I want to know more about
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it the wealth tax is not the answer a
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change in policy and more careful
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spending that's the answer
