Follow us
Publications Commentary Research People Events News Resources and Videos About IFS
Home Publications Revenue and distributional modelling for a UK wealth tax

Revenue and distributional modelling for a UK wealth tax

Arun Advani, Helen Hughson and Hannah Tarrant
Journal article | Fiscal Studies Special Issue on a Wealth Tax: Time for Another Look?

In this paper, we model the revenue that could be raised from an annual and a one-off wealth tax of the design recommended by Advani, Chamberlain and Summers in the Wealth Tax Commission's Final Report (2020). We examine the distributional effects of the tax, in terms of both wealth and other characteristics. We also estimate the share of taxpayers who would face liquidity constraints in meeting their tax liability. We find that an annual wealth tax charging 0.17 per cent on wealth above £500,000 could generate £10 billion in revenue, before administrative costs. Alternatively, a one-off tax charging 4.8 per cent (effectively 0.95 per cent per year, paid over a five-year period) on wealth above the same threshold, would generate £250 billion in revenue. To put our revenue estimates into context, we present revenue estimates and costings for some commonly proposed reforms to the existing set of taxes on capital.

More on this topic

Journal article | Fiscal Studies Special Issue on a Wealth Tax: Time for Another Look?
We show that wealth inequality in the UK is high and has increased slightly over the past decade as financial asset prices have increased in the wake of the financial crisis.
Journal article | Fiscal Studies Special Issue on a Wealth Tax: Time for Another Look?
In this paper, I examine the role of a wealth tax in the context of the UK's existing taxes on wealth.
Journal article | Fiscal Studies Special Issue on a Wealth Tax: Time for Another Look?
In this paper, we review the existing empirical evidence on how individuals respond to the incentives created by a net wealth tax.