Jacob Dolan, Review & Interview Editor
Throughout Labour’s 2025 Party Conference earlier this month, numerous placards and even billboards displayed the increasingly popular slogan, “Tax Wealth, Not Work.” Yet, within the walls of the Liverpool Exhibition Centre (this year’s host venue), the UK Government’s discourse on a potential wealth tax remained incoherent and, for some members, even taboo. The reluctance of Keir Starmer, the Prime Minister and leader of the Labour Party, to introduce such a policy may partly stem from the now-infamous inheritance tax applied to some UK farmers last year, which was met with strong opposition, particularly from the right with aligned media popularising protests led by celebrity farmers.
That said, support for a broader wealth tax is no longer confined to traditional left-wing circles and now cuts across both social and political lines. In September, reports indicated that 74% of former Labour voters who have since turned to Reform expressed support for a comprehensive wealth tax package targeting Britain’s top 1%, as well as banks and gambling corporations (TUC, 2025). Even more strikingly, according to Patriotic Millionaires UK (2025), 76% of UK millionaires support a tax on their own wealth if it contributes to a fairer and more stable future.
In the academic sphere, over thirty leading economists signed a petition in late July calling for the introduction of a progressive wealth tax in the UK (Tax Justice UK, 2025). Among the notable signatories were Thomas Piketty, Chair of the Paris School of Economics and Centennial Professor at the London School of Economics, and Gabriel Zucman, Chair of the EU Tax Observatory and Research Professor at both UC Berkeley and the Paris School of Economics. Their 2014 paper, Capital is Back: Wealth–Income Ratios in Rich Countries, was one of the first major contemporary works to highlight the need for a wealth tax, analysing wealth-income ratios from 1700 onwards across eight leading OECD economies, including the UK.
The wealth-income ratio (WIR) is defined as the sum of private and public wealth divided by total income (domestic and foreign), typically expressed as a percentage. It serves as a macro-level indicator for embedded inequality: a higher or rising WIR suggests that returns to pre-existing capital (wealth) are increasingly outpacing the rewards to labour (income).
In the UK, the WIR has followed a U-shaped trajectory and is now reapproaching 19th century levels of roughly 500-700%. Patrimonial capitalism dominated the Victorian era, when inherited wealth and landownership prevailed amid slow economic growth (Piketty & Zucman, 2014). This subsequently shifted after the World Wars due to capital destruction and anti-capital policies, including high taxation, which redistributed wealth and suppressed asset prices, stabilising income levels over time (Waldenström, 2021).
One of the main culprits for the recent rise of the WIR in the UK has been the sharp increase in property and financial asset values, driven by financialisation, limited land supply and chronic under-housing. House prices, a well-documented concern in the UK, rose by 160% in real terms between 1996 to 2021 (UK Collaborative Centre for Housing Evidence, 2022), while real household disposable income grew by only approximately 45% in the same period (ONS, 2025).
More broadly, much of the recent surge in UK wealth has been driven by unearned, passive gains. Without these, total household wealth in 2023 would be around £4.7 trillion lower, highlighting how asset-price inflation – rather than new saving or productive investment – has been the primary driver of the wealth boom (Resolution, 2024). This dynamic has concentrated wealth further among existing asset owners. Accordingly, the latest estimates of the WIR by the Institute for Fiscal Studies in 2022, place the ratio at around 680% and rising.
Solutions to growing inequality have become increasingly radical, with economists like Emmanuel Saez (2017), Jakob Kapeller (2021) alongside Thomas Piketty and Gabriel Zucman (2014; 2023), leapfrogging national wealth tax advocacy and now also pushing for an international scale wealth tax. This proposal faces obvious barriers, chiefly the logistical challenges of international cooperation between countries with less than favourable relations. The incentive for individual nations to defect, potentially triggering mass capital flight to said defector, would in turn cause no country to participate, represents a real-world example of the prisoner’s dilemma. Nevertheless, such calls for radical reform from leading economists signal a growing recognition that the current system is failing to address inequality in the UK and beyond.
So, what countries have a wealth tax? Among OECD members, only three currently do: Norway, Switzerland and Spain. The Switzerland model has been most successful, with its wealth tax accounting for 4.28% of total tax revenue, far higher than Norway’s 1.48% and Spain’s 0.57% (Yanatma, 2025). Notably, net foreign assets held in Swiss banks – a common vehicle for the global elite – are not directly subject to Switzerland’s wealth tax, so are not the primary source of this higher revenue.
Instead, Switzerland’s success lies in the tax design. Each of its 26 Swiss cantons – functioning similarly to US states – sets its own exemption thresholds and tax rates, allowing for regional flexibility and political acceptance, as the tax is tailored to local wealth distribution and political preference. Compared to Norway and Spain, the Swiss wealth tax generally has a wider base, covering parts of the wealthy middle-class, not just the ultra-rich. Moreover, apart from a few exemptions and by-canton differences, the tax includes further assets such as art, jewellery and securities which further boosts revenue (Marti, et al., 2023).
Recent calculations place Switzerland’s wealth-income at around 800%, higher than both Spain and Norway. Switzerland has historically had a capital-friendly approach to policymaking. While most OECD countries, including the UK, WIR dipped to 200-300% in the twentieth century, Switzerland’s remained exceptionally stable at around 500%, reflecting their consistent commitment to free-market capitalism (Baselgia & Martínez, 2025). Notably, a recent study found that in Switzerland a 0.1% reduction in the wealth-tax rate increases the top 1%’s wealth share by 0.9% within five years (Marti, et al., 2023), underlining the link between lower wealth taxation and rising inequality.
Not all aspects of the Swiss model would be well received in the UK, particularly its broad tax base, as any realistic British implementation would likely target only the ultra-wealthy.
A wealth tax may not be a silver bullet to the United Kingdom’s growing economic inequalities, but it represents a tangible – and crucially well supported – first step towards a fairer distribution of wealth. With Starmer’s 2025 Budget approaching next month and calls for a wealth tax gaining momentum, now presents an opportune moment to act, learning from European precedents, targeting the wealthiest while minimising disruption, and laying the groundwork for a more equitable tax system that addresses deep-rooted inequality and supports the concept that work pays.
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