I note that the Guardian, amongst others, reports this morning that:
An international scheme to tax the wealth of the world's 3,000 billionaires is technically feasible and could net up to $250bn (£197bn) a year in extra revenue, a new report says.
They add:
A study by the French economist Gabriel Zucman concluded that progress in finding ways to tax multinational corporations meant it was now possible to levy a global tax on individuals – even if not every country agreed to take part.
First, let me state the obvious and point out that this report by Gabriel Zucman seems to suggest that one of Gabriel Zucman's ideas might work. That does not appear to be the most resounding endorsement.
Second, the report acknowledges problems with valuing wealth. Good luck, I say, in overcoming that issue.
And third, it admits there could be problems if major countries refuse to take part in this tax. I doubt the US and China will. The issue may be technically surmountable, but lots of things are surmountable in academics' imaginations when it comes to tax, and look pretty impossible in reality.
To put it another way, why do this? Massive political capital and vast tax authority actual resource will gave to be expended to collect maybe $250 billion - or £200 billion, near enough.
In the Taxing Wealth Report I explain how the UK could raise considerably more proportionately just by modifying existing taxes with little political capital expended. So what is all this about?
Zucman is part of the new generation of tax justice campaigners for whom gestures (like supporting the UN rather than the OECD to deliver tax reform) matter much more than actually effecting change. The world could discuss Zucman's idea for twenty years and get nowhere. Or it could get on with the suggestions I have made and without fuss deliver real additional revenues, fairer tax systems and much reduced inequality.
I have always been on the side of pragmatic tax justice. The fantasists who now dominate civil society debate on this issue do the cause no favours, whilst impeding practical progress considerably. None of them paper to gave ever worked in tax. They really are not helping a cause to which I dedicated many years of work.
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Might M. Zucman and co. have a submerged purpose of protecting the wealth of the billionaires etc whose wealth they shield by diversion/distraction?
Yet it has to be done.
Taxing high earners and those with extreme wealth on their various revenues is one thing, rebalancing the actual distribution of wealth held is quite another.
If there are no ways of redistributing total assets held then we are in a position which fossilises the current extreme wealth distribution and that will limit or prevent resource reallocation. This is clearly undesirable.
It is not only the tax system that can achieve this outcome, but tax experts concentrating their minds in searching for some kind of effective overall asset taxation is really important.
The adverse effects of extreme wealth concentration are politically unacceptable to anyone who considers some degree of egalitarianism necessary for the welfare of the whole of society.
In no way does this mean pursuing absolute equality in wealth holdings by every individual, or exclusive state ownership, simply more equable overall distribution.
We know that wealth inequality has become especially pronounced since the 1980s and the accession of neoliberalism.
Wealth concentration is an unstated objective of that dogma. It creates oligarchy and plutocracy.
Democratic government is then captured by those interests. The adverse effects of the resultant plutocratic trends are well documented. Russia after 1992 is a classic example.
In the UK, Thatcher used £300 billion of collective North Sea oil revenues as tax handouts to the wealthy during the 80s. The most valid alternative option here would have been to establish a Sovereign Wealth fund comparable to that which has elevated the standard of living for all Norwegians.
Yes, we can tax revenues to mitigate the continuing capture of global assets by a very few people, as Taxing Wealth proposes, and that is an obvious first step.
However, without some means of redistributing total assets, the tiny global oligarchical group will permanently retain all that wealth, ossifying current plutocratic global government.
I’m with Ry Cooder, the famous macro-economist, on this one.
“The very things that make you rich, make me poor.”
One day, maybe
Shall we do the low hanging fruit first?
They’ll solve 80% of the issue.
In 2021 in the UK, the bottom 50% of the population held less than 5% of wealth with the top 10% owning 57%. The top 1% held 23% of all UK wealth. That concentration is still increasing.
Using systems terminology, “Taxing Wealth” tackles ‘flows’, but not ‘stocks’.
It is therefore an extremely useful though partial management tool but cannot alone manage the whole system and address structural matters.
As a result the current system will be maintained, and will remain highly pyramidal as regards overall wealth distribution. The trend to concentrating wealth will continue.
The artifice of neoliberalism absolutely intends to concentrate wealth and to create plutocracies, so to reform neoliberalism, the issue of excessive ‘stocks’ holding in terms of wealth also needs to be addressed, alongside managing revenue inequalities, in order to restore social democracy.
Machiavelli called this ‘killing the sons of Brutus” – by which he meant destroying all future potential for the restoration of tyranny, though in Medici style. Today we don’t need to assassinate the oligarchs and plutocrats, but for their own welfare and safety, we need to reduce their total headline wealth to more reasonable sums, to avoid the pitchfork brigade.
How many billions are enough ?
My argument is that the impacts of the current extreme concentrations of wealth may well be mitigated in terms of wider economic benefits to society by seeking to manage the ‘flows’ through taxation but this will not significantly alter the embedded holdings of wealth stocks – which then continues to create disproportionate ‘flows’ of revenue to a very narrow group at the top 1% level.
There actually needs to be a twin approach with the ‘flows’ being dealt with now through tax revenue reform, but an equal priority needs to be given to tackling the overall distribution of wealth ‘stocks’ to remove excesses of inequality by restructuring wealth distribution.
I don’t see this as necessarily being through personal taxation. For instance, we do need a serious and effective attempt to prevent the concealment of individual and corporate wealth as a first step in seeking more equable distribution, by identifying beneficial ownership as a legal duty. UK tax havens have yet to be brought into line. JSW’s Tobin tax would also have a welcome wider structural impact.
I’m quite happy to see as many economists as possible seek solutions to inequality issues in terms of wider ‘stocks’ distribution, but certainly take the point that ‘flows’ can be managed in the short run and that this priority must not be sacrificed on the altar of absolute redistribution in the medium term.
Forget a wealth tax. All we need is a Betting Tax, of 99% on both the investment and the winnings, designed specifically for politicians betting on elections.
That is the only way to stop this tawdry indulgence. There requires to be far more severe penalties for any who go further and indulge in ‘insider’ betting (betting when you already know the outcome of the bet; because it isn’t a bet, but a “racing certainty”).
Tony, your statistics are somewhat meaningless without context.
Around 20% of the population are under 20 years of age.
How much net wealth should we reasonably expect anyone to have at that age?
Some have quite a lot
But the reality is wealth ownership is skewed to the elderly
He may not be under the age of 20 but he didn’t make this money in 13 years!
https://people.com/duke-of-westminster-kisses-bride-olivia-henson-wedding-attended-prince-william-princess-eugenie-8656779#:~:text=Hugh%20Grosvenor%2C%20the%20Duke%20of%20Westminster%2C%20married%20Olivia,Prince%20George%27s%20godfathers%2C%20is%20reportedly%20worth%20%2412.8%20billion
@Jackie G
The figures are what they are.
They are cited to show how unequal wealth distribution actually is, in support of my general argument that, as well as taxing ‘flows’, then redistribution from assets or ‘stocks’ is also required if there is any prospect of reforming neoliberalism.
This is a global argument, and was not intended to be parochially British.
I’m not sure small defined demographic groups are relevant to a discussion of the extremely wealthy plutocratic class, who then call the shots politically and economically.
For studying general patterns of wealth distribution I’d be more inclined to start by looking first at income deciles, and spatial distribution, (but then I’m a geographer).
I did ask the question how many billions are enough.
This last week Taylor Swift donated sufficient funds to keep a Cardiff foodbank going for a whole year, and is often lauded for her charitable donations.
For context, her wealth has increased by $200m since autumn 2023, so just about six months, and she is now allegedly worth $1.3 billion.
The Final TV Debate: one word describes the whole dismal experience: moronic. Sunak is a small, unpleasantly unconvincing bully, selling the same old snake oil, with a grubby new label. He doesn’t “get it” – he hasn’t a clue.
Starmer? Was he even there?
It was grim
I might say more in the morning
Maybe you hope I don’t
There is more to say? I need to lie down in a darkened room…….
The best question, highlighted on the news (I couldn’t stomach the whole tawdry show) was from the man who asked: “Are these two the best we can get?)
Starmer annoys me when he goes on about his legal experience. As a human rights lawyer he clearly crumbled under pressure from the US over Gaza. Contrast this with another human rights lawyer, Paul Harris, who as Chair of the Hong Kong Bar Association did not crumble under far greater pressure from the Chinese government.
Here he is interviewed by Green Bean Media, where he explains, in his typically modest manner, the circumstances that lead up to him having to leave Hong Kong:
https://youtu.be/lf0HgCamfCk?feature=shared
He is now standing as a LibDem candidate in the Aldershot constituency. Unfortunately he is unlikely to be elected. But we need people like him in Parliament to hold the government to account.
Does the Guardian say how it would enforce it’s worldwide wealth tax? Gun-boats are so 19th century.