So much for wealth taxes.
The number of countries imposing a wealth tax has dwindled. Just over three decades ago in 1990, 12 countries had one. Today, only Norway, Spain, and Switzerland remain and the yields in these countries are low while the deterrents are high.
Emmanuel Macron ditched France’s wealth tax just over five years ago following
an exodus of billionaires to destinations including the UK.
According to the OECD, countries have ditched them because they cost too much to administer, distort investment decisions and punish people who are asset-rich but cash-poor. The people it’s designed to target can also leave if they want to.
In short, wealth taxes don’t really raise much cash.
The closest the UK came
to introducing an explicit wealth tax one was in the mid-1970s inflation strike that led to mass strike action.
Denis Healey, then-Labour chancellor, wrote in his memoirs: “We had committed ourselves to a wealth tax; but in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle.”