The wealth tax that answers its own objections
Zucman's 2% minimum would touch fewer than 1,000 households and raise £10bn. The usual arguments against don't survive the design.
Nobody at HM Revenue and Customs can tell you how much tax Britain’s billionaires pay. Not roughly, not on average, not at all. The Public Accounts Committee reported last summer that HMRC does not know how many billionaires even pay tax in this country, let alone how much they contribute. The Sunday Times can find 157 of them. The tax authority cannot.
Hold that thought while considering the proposal Gabriel Zucman has spent the past two years putting in front of governments, because the two things are connected. It matters even more for the louder, more popular and considerably worse proposal that has come to dominate the British version of this debate.
Zucman’s idea is routinely described as a wealth tax, and routinely attacked as one. It is better understood as a minimum tax. Under the version he published for the UK last month with Ben Tippet of King’s College London, households worth more than £100 million would have to pay, in total tax each year, at least the equivalent of 2 per cent of their wealth. Income tax already paid counts towards the floor. Anyone already contributing at that level pays nothing extra. The tax only bites on fortunes structured so that tax barely touches them.
That structuring is not a fringe activity. The standard playbook at the very top is to hold wealth in company shares, take little formal income, and borrow against the assets to fund spending. No sale, no gain, no taxable event. In the UK the arrangement comes with a bonus: capital gains are wiped clean at death, when the next generation inherits assets at their market value. A fortune can compound for fifty years and never generate a tax bill that remotely reflects it. This is why Zucman’s research finds the very wealthiest paying effective rates far below ordinary workers, and it is why reforming capital gains tax or inheritance tax, worthwhile as both would be, cannot fix the problem. You cannot tax a taxable event that never happens. At some point you have to tax the wealth.
The Tippet and Zucman report estimates a UK version would have raised £10.4 billion in 2026, from fewer than 1,000 households, rising towards £18 billion a year by 2036 as fortunes grow. The number passes a basic smell test. The 350 richest families in Britain hold £784 billion between them, on the Rich List’s count. A full 2 per cent of that alone is nearly £16 billion, before you add the merely nine-figure fortunes below them. To get to £10 billion net, you only have to knock off the income tax these households already pay and allow for a decent amount of avoidance and departure. It is an estimate, and estimates in this territory are contested, but it is not a heroic one.
For scale, £10 billion is roughly ten times what cutting the winter fuel allowance was supposed to save, and close to a third of the projected current budget deficit. It is real money, raised from the group whose wealth has grown fastest. The richest 300 households held assets worth around 5 per cent of GDP in 1989. Today the figure is about 16 per cent.
Most people who heard the case for a wealth tax this year didn’t hear it from Zucman. They heard it from Gary Stevenson, the former trader whose Gary’s Economics channel has 1.6 million subscribers and whose proposal, a 2 per cent annual tax on everything above £10 million with no exemptions, has become the default version in British debate. A dozen Labour MPs put much the same thing to the Chancellor with a £24 billion price tag attached. YouGov finds 78 per cent of the public would back even a 1 per cent version. It polls well, it travels well on video, and it is the wrong proposal.
Start with the threshold. Dropping from £100 million to £10 million does not add a few more of the same people. It changes who the tax is about. Roughly 20,000 households sit above £10 million, and at that level you are deep into the territory of first-generation business owners whose wealth is a company, not a portfolio. These are exactly the taxpayers for whom the valuation and liquidity objections apply with full force: illiquid assets, hard to value annually, and a tax bill that has to be paid in cash the business may not generate. HMRC would face twenty times the caseload with a fraction of the certainty.
Then the design. Stevenson’s tax is an add-on, not a floor. It falls with identical weight on someone already paying millions in income tax through an ordinary salary and someone paying nothing through careful structuring. Zucman’s minimum can tell those two people apart; Stevenson’s cannot. That is not toughness. It is a blunt instrument, and it hands the opposition its best argument. The sympathetic case study, the entrepreneur taxed twice on a business she built and cannot sell, is real under Stevenson’s design and does not exist under Zucman’s.
The revenue claim is weaker too. The £24 billion figure is precisely the one Dan Neidle’s analysis at Tax Policy Associates took apart, and the no-exemptions design has the worst international record of all. A dozen OECD countries levied broad net wealth taxes in 1990. Three or four do today, and the survivors survive through the carve-outs, caps and discounts that Stevenson’s version proudly refuses. His implicit answer, that past wealth taxes failed because they were not uncompromising enough, is the reasoning of a man doubling a losing bet.
It matters who is making the argument, because of how he makes it. Stevenson bills himself as one of the best, if not the best, inequality economists in the world. That certainty is the sales technique, and as audience-building it plainly works. But it is the wrong temperament for tax design, where what decides whether a policy survives is unglamorous: valuation, liquidity, migration, enforcement. The videos never get there. A proposal whose promoter treats every objection as propaganda for the rich is a proposal that has never been stress-tested. Zucman, by contrast, publishes his assumptions and lets Neidle shoot at them. One of these is how serious policy gets made.
There are serious objections, and Zucman's version does not escape them entirely.
The first is behavioural. The projected yield is extraordinarily concentrated, with a large share coming from a few thousand people and a material slice from perhaps ten. A handful of departures could remove billions. No developed country currently runs both a significant net wealth tax and a significant inheritance tax, and Britain would be an outlier. Outliers in tax policy pay a premium for the privilege.
The second is the residue of the valuation problem. Even at £100 million, private companies must be valued annually, and Norwegian evidence suggests owners respond by pulling dividends out of businesses that would otherwise reinvest them.
These are the strongest cards the sceptics hold, and they are not nothing.
But look at what the design already concedes to them. The £100 million threshold exists precisely so that HMRC faces under a thousand taxpayers, few enough to scrutinise individually, with administrative costs the report puts below 1 per cent of revenue. The proposal keeps households liable for up to ten years after they leave the UK, borrowing the principle Parliament has already accepted for inheritance tax under the new residence rules. Emigration stops being a fire escape and becomes a decade-long unwinding. And the valuation problem is smaller than advertised at this altitude: the same assets said to be impossible to value are valued routinely whenever their owners borrow against them. Banks manage it. HMRC can too.
The liquidity objection, meanwhile, has to survive contact with the number. Two per cent. Large diversified fortunes have historically returned three or four times that annually. This is not confiscation, or anything near it. It slows the rate at which the largest fortunes compound; it does not shrink them.
There is also a precedent the sceptics tend to skate past. When multinational companies spent decades booking profits in whichever jurisdiction taxed them least, the answer that eventually stuck was not tinkering with each country’s tax base. It was a floor: the 15 per cent global minimum corporate tax, agreed by more than 135 countries. Zucman’s proposal applies the identical logic to individuals, and the G20 was interested enough to commission his blueprint. France’s National Assembly voted one version down last autumn, 228 to 172, but that was coalition arithmetic in a hung parliament, not a verdict on workability. The French objection was political. Ours doesn’t have to be.
Here I should declare something. I don’t come at this from the left, and this is not an envy argument. It is a tax integrity argument. Every employee in Britain has their tax collected at source, with no negotiation and no room for clever structuring. A system in which that is true for nurses but optional for the wealthiest thousand households is not a functioning tax system with a gap in it. It is a voluntary regime for the people best placed to pay, run by an authority that cannot count them. If the word conservative means anything in fiscal policy, it should mean minding the integrity of institutions like that.
The behavioural risk is real, and anyone who tells you the revenue is certain is overselling. But the status quo is not a neutral baseline. It costs £10 billion a year in forgone revenue, it corrodes consent for the taxes everyone else pays, and it leaves HMRC blind at the very top of the distribution.
The greatest danger now is not that Britain rejects a wealth tax. It is that Britain tries the loud version, watches it fail the way broad wealth taxes have failed everywhere, and concludes the idea was wrong rather than the design. There is a workable floor available, costed, targeted and honest about its own risks. Britain built one for companies because the alternative had become absurd. The case for building one under personal tax is the same case, with fewer than a thousand names attached. It would be careless to let the wrong proposal spoil it.
Sources: Tippet & Zucman, “A minimum tax on the ultra-wealthy in the UK” (King’s College London / Paris School of Economics, July 2026); Public Accounts Committee report on HMRC and wealthy taxpayers (July 2025); Sunday Times Rich List 2026; Tax Policy Associates, “UK wealth tax: high risk and anti-growth” (2025); EU Tax Observatory G20 blueprint (2024); YouGov polling on wealth taxation.