Tax the rich - Why do we need wealth taxes in the UK?

A wealth tax is a tax on the total value of a person's assets over a certain amount set by the government. Assets can include cash, property or land, stocks, businesses, valuable possessions, and other forms of wealth.

The purpose of this type of tax is to generate revenue and address wealth inequality. Wealth taxes typically only affect people whose assets exceed the specified limit. This ensures it targets only the wealthiest members of society.

There are several wealth taxes already in place in the UK. Oxfam supports the following wealth tax reforms that Tax Justice UK and Patriotic Millionaires UK have set out:

1. Apply a 2% wealth tax on assets over £10 million, raising up to £24 billion a year.
2. Reform capital gains tax to raise £14 billion a year.
3. Apply National Insurance to investment income, raising up to £10.2 billion a year.
4. Close inheritance tax loopholes to raise £1.4 billion a year.
5. Close the loopholes in the new non-dom scheme to raise up to £1 billion.
6. Introduce a 4% tax on share buybacks, raising approximately £2 billion a year.

We believe that wealth taxes are crucial to tackle growing inequality between the super-rich and people living in poverty. As part of Tax Justice UK, Oxfam is pushing for more taxes on the super-rich.

We are calling for lot's a different types of taxes through coaltions and our own campaigns - taxing the rich in multiple ways helps to even the playing field.

Billionaire wealth soared three times faster in 2024 than the year before, and UK billionaire wealth rose by £35 million each day. Meanwhile one in five people in the UK live in poverty. The UK Government must ensure that excess wealth and profit in the UK are used to help create a fairer future for everyone.

The government can fight poverty and promote fairness by funding public services, social security, and a just climate transition in fair ways. This will improve living standards, support gender and racial justice, build a stronger economy, and restore the UK’s global reputation on aid and climate commitments. The cost of inaction is far greater than the cost of action.

In the UK, wealth inequality is widening, and poverty is getting worse. An estimated 14.5 million people – 22% of the UK population – live in poverty. Meanwhile the richest 1% of Britons now hold more wealth than 70% of all other Brits.

Following years of financial cutbacks, the cost-of-living crisis has hit people on low incomes the hardest, leaving them struggling to afford everyday essentials. Combine this with a devastating lack of investment in public services like healthcare, people who most need support are often unable to access it.

Yes, some do. Many high earners, taxed at the top 45% income rate plus 2% national insurance, contribute their full share with few deductions. However, others, especially those making money from capital gains (tax on profit from selling property or investments), pay much lower tax rates.

For example, in 2015-16, people earning £1 million from taxable income and capital gains paid an average tax rate of 35% — the same as someone earning £100,000. A quarter of these million-pound earners paid less than 30%, and one in ten paid just 11%, similar to the rate for someone earning £15,000.

These low tax rates aren’t due to loopholes or illegal tricks. It’s the way the system is set up. Income from investments and capital gains is taxed at lower rates than wages. A wealth tax would make this system fairer.

The reasons for global inequalities are the same as those causing poverty in the UK. Our systems prioritise letting a few people get richer over fairness and equality. This includes undervaluing work that is vital to society and the economy, like childcare and social care, which are essential for both to function.

The World Economic Forum (WEF) is an annual meeting of political and business leaders from around the globe that takes place in Davos, Switzerland.

We think it’s time those at the top paid their fair share.

Three quarters of the UK public support higher taxes on wealth, and UK millionaires are even calling for increased taxes on themselves. Think of what the extra money could fund — better healthcare, quality education and fair wages for us all.

Together, we can build a world that works for everyone. Are you in? Join the fight for a fairer future. It's time to tax the super-rich.