Thomas Piketty has produced a spreadsheet model which enables a rough calculation to be made of the approximate tax revenues raised from a Europe-wide wealth tax. Using Piketty’s example tax rates and thresholds gives a European total receipt €307 billion. We can make a rough approximation of the UK’s share of this revenue by looking at the UK’s GDP compared to that of Europe. This gives an estimated annual income of £25 billion.
Look at Thomas Piketty’s spreadsheet 15. Wealth tax simulation, with amendments to estimate the UK’s share in blue
- The potential tax receipt would be higher given the fact that there are proportionally more wealthy individuals in the UK than there are throughout Europe.
- The super-rich would take action to try and avoid this tax – although heavy penalties should be introduced to counter such activity.
- Thomas Piketty proposes that this be a universal tax, with a very small percentage levied all but the wealthy. This would then replace council tax, and would enable the government to collect more accurate data on wealth inequality in the UK – an essential step in managing inequality. The aim would be for those on lower incomes to be left better off than under council tax.