Wealth Tax

Dear constituent,

Thank you for contacting me about a wealth tax.

I appreciate that there have been several calls for a wealth tax in the wake of the coronavirus pandemic. For example, in April 2021, the UN Secretary General, as you note, called for governments to consider “a solidarity or wealth tax” on those who have profited during the pandemic, to reduce extreme inequalities. In October 2021, meanwhile, a group of 30 UK millionaires called on the Chancellor to tax them and the wealthy more in order to tackle inequality and address crises such as the pandemic and the climate emergency.

I note the report of the Wealth Tax Commission, which recommended a one-off wealth tax in response to the impact of COVID-19. As you will know, the Commission found that such a tax, if well designed, could raise significant revenue in a fair and efficient way, be very difficult to avoid and work in practice without excessive administrative cost. At the same time, the Commission did not recommend an annual wealth tax, arguing instead that significant reforms to existing taxes such as capital gains tax and other taxes on wealth would be more effective.

The Government has rejected calls for a wealth tax. However, I hope it will give proper consideration to the findings of, and issues raised by, the Wealth Tax Commission.

More widely, I believe we must make our tax system fairer, ensuring that the burden does not fall just on the wages of working people, but that those at the top pay their fair share too. It cannot be right that successive Government Budgets have raised council tax, income tax and National Insurance contributions, while the wealthiest, those making their money from stocks, shares and property portfolios, have been left largely untouched. I can assure you that I will continue to support efforts to press the Government on this issue and ensure those with the broadest shoulders bear more of the burden.

Thank you once again for contacting me.

Peter Dowd MP