Wealth tax on UK’s super-rich could raise £10bn a year, Andy Burnham told

A wealth tax on the UK’s super-rich households could raise £10bn a year, according to academics who urged Andy Burnham to include the measure in his plans to “make tax fairer” and pay for better public services.The sum could be raised through a 2% minimum charge on households with more than £100m in wealth and would affect fewer than 1,000 of the richest UK households, according to the study by Gabriel Zucman, a professor of economics at the Paris School of Economics, and Ben Tippet, a lecturer in economics and wealth inequality at King’s College London.Burnham has hinted that a wealth tax could be part of his 10-year plan for the UK, though his close advisers have focused on a rise in the threshold of capital gains tax to match income tax to raise extra revenue.The new prime minister, who will lay out his tax and spending plans later on Tuesday, said recently that he wanted to avoid creating fresh divisions in society, but that he would consider how to tax people “in a fair way”.Speaking to footballer-turned-podcaster Gary Lineker last week, Burnham said: “I do believe we need a greater sense of fairness and people feeling things are being done in the right way, but at the same time I don’t want to be perceived as someone who is coming in with grudges and agendas and demonise one group.”The academics’ proposal for a wealth tax would force HMRC to calculate the accumulated wealth of the UK’s richest families, including property, private businesses and pension wealth, art, land and charitable assets over which they have control.Their report said: “The objective is not to create a broad-based wealth tax affecting millions of households but rather a focused tax on extreme wealth that can make billionaires pay the same tax rates as the rest, raise meaningful revenues and dampen runaway inequality.”Zucman, who is also an economics professor at the University of California, Berkeley and is known as “the architect of the global wealth-tax movement”, said: “Given the small numbers of households that would be taxed, the UK government could implement this quickly.”Zucman’s studies have shown that households with incomes of £100m or more have the means to avoid most current taxes on wealth, using holding companies, charitable trusts and transfers between family members.Tippet said: “The report shows that a well-designed minimum tax on the very wealthiest households is a realistic, targeted reform that would make the UK’s tax system fairer while raising substantial revenues.”He added that, because the tax is targeted at a small group, “the familiar criticisms of wealth taxes – administrative complexity, asset valuation, liquidity constraints and impacts on entrepreneurs – do not hold”.Under the plan, HMRC would calculate the wealth of rich families, piecing together their collective wealth to prevent large-scale tax avoidance. There would also be a rule forcing rich families to pay the tax for at least 10 years after they quit the UK, denying them the ability to move country to avoid it.Growing global wealth inequality has pushed ideas for higher or extra taxes up the political agenda across the globe. The New York City mayor, Zohran Mamdani, has imposed a tax on second homes and called for a broader wealth tax.skip past newsletter promotionafter newsletter promotionIn 2024, countries including Germany and Brazil said the world’s 3,000 billionaires should pay a minimum 2% tax on their fast-growing wealth to raise £250bn a year for the global fight against poverty.At the last G20 meeting of leading nations in South Africa, president Cyril Ramaphosa said intervention was needed after a report showed more than $70tn (£52tn) of inherited wealth will pass down the generations across the world over the next decade, widening inequality.Tippet, who used as a guide calculations of wealth by the Sunday Times for its annual rich list, said the collection of the data by HMRC was already under way and the tax would not be costly to collect.The report said: “Critics often point to the decline in the number of European wealth taxes since the 1990s as proof that wealth taxes do not work. However, most historical wealth taxes were fundamentally different from the proposal outlined here.“They typically had relatively low thresholds, covered large sections of the population, and/or contained extensive exemptions for particular assets, in particular private business assets.“These exemptions created avoidance opportunities, reduced revenues and generated political opposition from taxpayers who felt unfairly treated.“The lessons from these experiences are clear. Wealth taxes work best when they focus on the very wealthiest households, apply to a broad asset base and are supported by strong administrative enforcement.”