We write as cross-party parliamentarians to ask that you implement changes to the tax system to fairly tax extreme wealth to raise funds for public benefit.
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The Rt Hon Rachel Reeves MP
Chancellor of the Exchequer
October 2024
Dear Chancellor of the Exchequer,
We write as cross-party parliamentarians to ask that you implement changes to the tax system to fairly tax extreme wealth to raise funds for public benefit.
This government has rightly acknowledged that the previous administration left the UK’s economy and public services in disarray. Austerity has plagued our constituencies and communities for over a decade, leaving vital services under-resourced and unable to adapt to emerging crises.
But there is no visible end to this crisis of underfunding. Analysis suggests that current spending plans and fiscal rules will likely lead to £18 billion of cuts to unprotected departments by 2029. In addition, through efforts to plug the financial shortfall left by the previous government, this government has already made executive decisions that place the burden of economic hardship on the most vulnerable.
We cannot afford to continue on this trajectory and, crucially, we do not need to.
In recent years, billionaire wealth has soared, increasing by almost £150 billion between 2020 and 2022. Despite this, revenue from wealth taxes has remained stagnant at around 3.4% of the UK’s GDP, proportionately only one percent higher than rates in 1965. This stands in contrast to other trends in the tax system, meaning that the richest are relatively under-taxed. This is deeply unfair and immoral: in an age of climate and economic crises, where public funds are desperately needed, it is necessary that we redress this imbalance.
The transformative potential of taxes on extreme wealth is clear, and appetite for them is growing. Governments around the world - including Norway, Italy and Brazil - are considering fiscal measures to fairly tax the super-rich. As one of the most unequal economies in the G7, the UK should follow suit.
In the upcoming Budget, we call on you to include the following changes:
Introduce an annual tax on extreme wealth. Fairly taxing extreme wealth is supported by three quarters of Britons and would generate a large stream of revenue. A wealth tax of 2% on assets over £10 million, for instance, would raise £24 billion per year.
Equalise capital gains and income tax rates. This would raise £16.7 billion per year and would rectify unfairness in the tax system, where working people are subject to proportionately higher rates of tax.
We urge you to take the bold decisions necessary to deliver the public funding that the UK desperately needs. As the first Budget of a new government, this is a key opportunity to lay the foundations for a fairer, more sustainable, and thriving economy for all.
Yours sincerely,
Adrian Co-Signed this cross-party letter initiated by Green New Deal Rising.
