#048 Once More…Tax The Fat Cats

Don’t Cut Support For Disabled People, Tax Wealth Instead

Wealth inequality in Britain (and globally) is now spiralling exponentially out of control. According to the Joseph Rowntree Foundation, the top 10% of the UK’s population owns 57% of the country’s wealth, while the bottom 50% owns less than 5%. Both the Conservative and Labour Parties have refused to make the progressive tax changes necessary to prevent and reverse the collapsing living standards and reverse the wealth transfer from working and middle class people to the very wealthy, we are seeing in society.

In January 2025 for instance, Rachel Reeves, Chancellor of the Exchequer,
changed the government’s previous policy position, outlined only a mere three months earlier in her October 2024 budget. Just weeks after meeting one of the world’s most powerful financiers, who asked her personally not to increase the tax burden on the super rich, she proudly announced she had been “listening to the concerns of the non-dom community” and that the tax change she had planned to make, to abolish non-dom status, would be softened…
https://www.opendemocracy.net/en/dark-money-investigations/rachel-reeves-non-dom-soften-blackstone-stephen-schwarzman-lobbying-meeting/

Then in March 2025, the government floated the idea of raising billions per year by tightening ‘Personal Independence Payments (PIP)’ eligibility criteria, cutting the top rate of ‘Employment and Support Allowance (ESA)’ (incapacity benefit) and cutting the ‘Limited Capability for Work and Work-Related Activity (LCWRA)’ Universal Credit rate, for those unfit for work.

Ben Jennings Guardian Cartoonist/Illustrator (2025)

Instead of making such morally questionable cuts, the government could instead focus on taxing wealth to bring in this revenue and more besides.

Here we outline and briefly explore six progressive tax changes that could, if implemented properly, vastly reduce rising wealth inequality that has become a serious problem in Britain, particularly since the 2020/2021 pandemic, since the 2008 financial crash and since the ushering in of Thatcherite Britain in the early 1980s.

1. Wealth Tax - A wealth tax on net wealth [at say 2% above £5million to start with, rising with time] would raise a significant amount of revenue each year. A tax justice report for instance estimated the UK could raise over £30billion a year from following a similar model to the 2023/2024 Spanish wealth tax.
   https://taxjustice.net/wp-content/uploads/2024/08/Taxing-extreme-wealth-What-countries-around-the-world-could-gain-from-progressive-wealth-taxes-Tax-Justice-Network-working-paper-Aug-2024.pdf
2. Inheritance Tax - Tighten up inheritance tax loopholes, particularly business and agricultural property inheritance tax reliefs that are exploited by the wealthy to avoid inheritance tax.
   https://taxjustice.uk/blog/new-uks-richest-families-got-2-billion-inheritance-tax-relief-in-2022/
3. Capital Gains Tax - Increase and align capital gains tax with the higher or additional income tax rates, 40 - 45%, rather than the 24 - 28% it is currently. This is a tax that is levied on profit of capital gains on property that is not the home of the seller, eg buying a second house and selling for a profit. Capital gains tax avoidance loopholes should be also closed to remove the unfair death uplift and by implementing an exit tax.
4. Dividends Tax - Increase and align dividend tax rates with the basic, higher and additional income tax rates. Above a small dividend tax free allowance of £500 per year (which acts like the personal allowance applying to income tax), dividends above this threshold are currently taxed markedly less than income, particularly the basic rate.
5. Stamp Duty Land Value Tax - Increase the top rate of stamp duty, affecting properties sold above £1.5million, say to 20%.
6. Frequent Flyer Levy - Taxing progressively the more someone flies in any given year so the first round-trip flight taken will be charged low or no tax then every subsequent flight is charged at an increasing rate.
   https://neweconomics.org/2024/04/sharing-the-carbon-pie-with-a-frequent-flyer-levy

If The Government Wants Growth It Should Be Taxing Wealth (Economist Richard Murphy, 2024)

Economist Gary Stevenson on Wealth Inequality (2025)