In this Institute of Economic Affairs podcast, Callum Price is joined by Kristian Niemietz, IEA Editorial Director, and Arun Advani, Director of the Centre for Analysis of Taxation and a former Wealth Tax Commissioner. The discussion centres on the IEA’s new paper, “Fool’s Gold: The Case Against the Wealth Tax,” covering why the idea has gone from niche curiosity to political obsession, what the evidence actually says, and why both guests conclude a wealth tax is, at best, a bad idea within the normal range of bad policy ideas.
The conversation examines the core problems with a wealth tax in practice: the valuation difficulties, the risk of capital and people leaving the country, and the fundamental contradiction at the heart of the wealth tax campaign, which simultaneously promises to cut taxes on working people, fund the NHS, finance the climate transition, and reduce inequality. Advani draws on the Wealth Tax Commission’s findings, including the estimate that a 1% tax on wealth above £10 million could raise around £10 to £12 billion, but notes that behavioural responses mean the real figure would be considerably lower. Niemietz argues the real cost of the wealth tax debate is its opportunity cost: every hour spent on a policy that will not work is an hour not spent on things that would.
The final section turns to what should be done instead. Niemietz points to the genuine drivers of falling wealth inequality in the post-war period: wider pension saving and rising home ownership. He argues that liberalising planning rules and building more homes, at the scale Britain managed in the 1930s, would do more to spread wealth than any tax on it. Advani adds that fixing the existing, poorly designed taxes on capital income and transfers would be a more productive use of political energy than building an entirely new tax from scratch.
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