Who should be paying a wealth tax?
We want to be clear: When we’re talking about a national and global wealth tax, we mean a tax on the super-rich. We’re not talking about your local doctor or business owner – we mean multi-million and billionaires. There are many models of a wealth tax on the table both in the UK and globally. What many of them share is the notion that the tax should be paid on assets of over £10 million. A new report from Greenpeace shows that a one-off 2.5 % UK wealth tax on wealth above £10 million could unlock a minimum of £130 billion for climate solutions and public services. At a global level, the Brazilian G20 Presidency commissioned a model by the EU Tax Observatory that showed that a 2% tax on 3,000 billionaires globally would generate an additional $250 billion.
Why a wealth tax? What other tax options are there?
Many of you asked us about other sorts of tax we could be campaigning for. There are lots of options on the table but we believe a wealth tax on the ultra-rich is the best way of unlocking huge amounts of money at the same time as addressing the inequality in our society – by making sure it’s the people who can afford it that are footing the bill. Right now, a few ultra-wealthy individuals and profiteering oil giants are continuing to grow richer at our expense and our governments are letting them get away with it.
What should a wealth tax be spent on?
These new taxes could raise billions of pounds that should be spent to reduce the chasm between the richest and the poorest in the world to make a fairer society where everyone can thrive.
Overseas, those most impacted by the climate crisis, in places like the Amazon, sub-saharan Africa and the Pacific Islands, are gearing up to build their own power with community-led renewable projects. As one of the biggest global polluters, the UK has a historic responsibility to pay for some of that transition, but rather than take it from the pockets of ordinary people who are also facing the cost of living crisis in the UK, that money should come from mega-rich individuals who are also the biggest polluters!
In the UK, we know some of this money must pay for the transition to affordable, renewable energy and energy efficiency at home. We want everyone to be guaranteed access to clean energy to heat their homes, and meet their basic needs without exception. What’s more, a wealth tax could unlock enough money to ensure we also have the cash to pump into public services, our NHS and much more!
How have the super-rich become super-rich?
At 350.org we believe that billionaires should not exist, and that’s because most billionaires’ wealth has been gained through exploitative and/or extractive work. Very soon we’ll be launching a report on some of the key billionaires we’re focussing on in our campaign, where you’ll get more of an insight into how their wealth was created. Keep your eyes peeled to find out more and for ways you can help us take action.
Won’t people move their money? How do we stop tax avoidance?
Tax avoidance isn’t a new thing. Whether it’s billionaires moving their money or fossil fuel companies getting tax back through loopholes on new developments. There’s no denying that tax avoidance is an issue, but in many models of wealth tax a % of avoidance is built into the expectations of what money can be gained. For example, in Greenpeace’s latest report, they’ve suggested that even with a high 42% avoidance of a wealth tax, £130 billion could still be generated in the UK across 5 years.
What’s more, the reality is that uprooting your home, business and livelihood isn’t that appealing! Right now the UK, and especially London’s financial centre, is a good place for multi-millionaires and billionaires to exist and realistically a small percentage wealth tax won’t lead to a huge departure from the UK.
Does this campaign need to be organised at a global level?
We’re pushing for both domestic wealth taxes and wealth taxes at a global level. At a global level, the Brazilian G20 Presidency has been vital in pushing this forward. They commissioned a model by the EU Tax Observatory as a basis to get countries to agree to 2% additional tax on 3,000 billionaires, which would generate $250 billion. The G20 Finance Ministers in July did not agree to taking on the model fully, but were warmer than they ever have been to taxing the super rich. Countries that are champions include Brazil and Spain. Followers include France, Mexico, Australia, and South Africa. The UK is currently on the fence and so we have a chance to push them in the right direction in the run up to the G20 Summit in Rio this November.
What is Labour’s stance on a wealth tax? Why aren’t they already doing it?
Labour have currently ruled out the type of wealth tax we’re calling for in the UK. For now, what is looking most likely for the next UK budget are wider changes to things like capital gains tax, inheritance tax and potentially tax on pensions. But none of these target the levels of extreme wealth that we feel is needed. There is growing political backing for a wealth tax in the UK. The Green Party supported the idea of a 2.5% wealth tax on the ultra-rich in their manifesto, and we’ll be looking at how we can work with those new Green MPs in our campaigning. Labour knows there is a huge deficit of money in the UK and there is a massive opportunity for us to build on the global momentum for a wealth tax and bring it to the UK context.
Thanks so much to everyone who submitted a question! We grouped them together to answer as many as possible. Submit further questions if you like and we’ll add answers to this blog post as soon as possible.
Our new “Tax Their Billions” campaign launched earlier this year calling for higher taxes on the super rich and fossil fuel companies. Get involved by signing the petition, watching the video and taking the quiz!
— Tommy for the 350 UK team
