Inequality
taxing any net worth more than $32 million, while Warren’s criteria was over $50 million. Conversely, the UK Wealth Tax Commission proposition was a one-off tax on net assets more than £500,000, meaning it would apply to a much higher proportion of the population. While a one-off tax on many people may be a good way of raising money to eliminate debt and cover costs incurred by the COVID- 19 pandemic, I would argue that an annual tax on the extreme rich would be the best way of raising consistent tax revenue that can go towards fighting inequality, while reducing the wealth of the extremely wealthy. In conclusion, I believe that a wealth tax has the potential to greatly reduce inequality, but only if it is well designed and enforced effectively. Firstly, the tax has to be designed in a way that will raise a significant enough amount of revenue, and minimizes administrative costs. Secondly, it must be designed and enforced in a way that reduces tax evasion, avoidance and capital flight. Finally, the additional revenue generated by the tax has to be used in a way that will effectively fight both wealth and income inequality. If these conditions are met, then it is my opinion that a wealth tax can be one of the key factors in fighting inequality.
This is an extended and edited version of an essay originally submitted to the Durham University Economics Society economics essay competition in April 2021.
Bibliography
Advani, A. Chamberlain, E. Summers, A. (2020) ‘A wealth tax for the UK’, Wealth Tax Commission Agyemang, E. (2020). One-off 5% wealth tax would raise £262bn to cover Covid costs, study finds. Financial Times, [online]. Available at: https://www.ft.com/content/36c35939-c06e-4758-8dcd-711d083f4192 [Accessed 4. Apr 2021]. Balogh, T. (1964). ‘A Note on the Wealth Tax’, The Economic Journal , vol. 74, no. 293, pp. 221-224 Breus, A. (2010). Valuing art for tax purposes. Journal of Accountancy, [online]. Available at: https://www.journalofaccountancy.com/issues/2010/jul/20092096.html [Accessed 4. Apr 2021] Kuper, S. (2020). This economist has a radical plan to solve wealth inequality . Wired, [online]. https://www.wired.co.uk/article/thomas-piketty-capital- ideology#:~:text=Piketty%20wants%20to%20slap%20wealth,were%20over%2080%20per %20cent. [Accessed 4. Apr 2021]. McDougall, M. (2021). Lessons from history: France’s wealth tax did more harm than good. Investor’s Chronicle, [online]. Available at: https://www.investorschronicle.co.uk/education/2021/02/11/lessons-from- history-france-s-wealth-tax-did-more-harm-than-good/ [Accessed 4. Apr 2021]. Mintz, Jack M. ‘The Role of Wealth Taxation in the Overall Tax System.’ Canadian Public Policy / Analyse De Politiques , vol. - 17, no. 3, 1991, pp. 248 – 263. Piketty, T. (2014). Capital in the twenty-first century . Harvard University Press (tr. A. Goldhammer) Pomperleau, K. (2019). A property tax is a wealth tax, but… Tax Foundation, [online]. https://taxfoundation.org/property-tax-wealth-tax/ [Accessed 4. Apr 2021]. Revenue Statistics: Comparative tables (2020 ) OECD Tax Statistics [online]. Available at: https://www.oecd- ilibrary.org/taxation/data/revenue-statistics/comparative-tables_data- 00262-en [Accessed 17. Feb 2020] Roman taxes (2021) [online]. Available at: https://www.unrv.com/economy/roman- taxes.php#:~:text=Tax%20farming%20was%20replaced%20by,and%20their%20income%2 Fwealth%20status. [Accessed 4. Apr 2021].
194
Made with FlippingBook interactive PDF creator