A wealth tax targeting the UK's super-rich households could generate £10bn per year, according to a study by economists Gabriel Zucman and Ben Tippet. The proposal, which would impose a 2% minimum charge on households with more than £100m in wealth, would affect fewer than 1,000 of the richest families in the country. The academics have urged new Prime Minister Andy Burnham to include the measure in his plans to make the tax system fairer and fund improved public services.
Burnham's stance on tax fairness
Burnham has hinted that a wealth tax could feature in his 10-year economic plan, though his close advisers have focused on raising the capital gains tax threshold to match income tax as a revenue-raising measure. Speaking to former footballer Gary Lineker on a podcast, Burnham stated: "I do believe we need a greater sense of fairness and people feeling things are being done in the right way, but at the same time I don't want to be perceived as someone who is coming in with grudges and agendas and demonise one group." The prime minister is expected to outline his tax and spending plans later on Tuesday.
Design of the wealth tax
The proposed tax would require HM Revenue and Customs (HMRC) to calculate the accumulated wealth of the UK's richest families, including property, private businesses, pension wealth, art, land, and charitable assets under their control. The academics' report states: "The objective is not to create a broad-based wealth tax affecting millions of households but rather a focused tax on extreme wealth that can make billionaires pay the same tax rates as the rest, raise meaningful revenues and dampen runaway inequality."
Gabriel Zucman, a professor at the Paris School of Economics and the University of California, Berkeley, known as "the architect of the global wealth-tax movement," said: "Given the small numbers of households that would be taxed, the UK government could implement this quickly." His research indicates that households with assets of £100m or more can avoid most current taxes through holding companies, charitable trusts, and family transfers.
Addressing common criticisms
Ben Tippet, a lecturer at King's College London, argued that the tax is realistic and targeted. He said: "The report shows that a well-designed minimum tax on the very wealthiest households is a realistic, targeted reform that would make the UK's tax system fairer while raising substantial revenues." He added that because the tax affects a small group, criticisms about administrative complexity, asset valuation, liquidity constraints, and impacts on entrepreneurs do not apply.
Under the plan, HMRC would piece together the collective wealth of rich families to prevent large-scale avoidance. A rule would force wealthy families to pay the tax for at least 10 years after leaving the UK, preventing them from moving abroad to evade it.
Global context and comparisons
Growing global wealth inequality has pushed wealth tax ideas up the political agenda. In 2024, countries including Germany and Brazil proposed that the world's 3,000 billionaires pay a minimum 2% tax on their wealth to raise £250bn annually for fighting poverty. At the last G20 meeting in South Africa, President Cyril Ramaphosa called for intervention after a report showed over $70tn (£52tn) of inherited wealth will pass down generations in the next decade, widening inequality.
The academics' report also addresses historical failures of wealth taxes, noting: "Critics often point to the decline in the number of European wealth taxes since the 1990s as proof that wealth taxes do not work. However, most historical wealth taxes were fundamentally different from the proposal outlined here. They typically had low thresholds, covered large populations, and contained extensive exemptions for assets like private businesses. These exemptions created avoidance opportunities, reduced revenues, and generated political opposition. The lessons are clear: wealth taxes work best when focused on the very wealthiest, applied to a broad asset base, and supported by strong enforcement."
