Tax the Rich?

Proposing to tax the rich is a popular trope of left leaning politics. Cue the Green Party General Election manifesto. A pledge to spend £50 billion per year on health and social care by 2030. Money to be raised by a 1% tax on assets worth £10 million or more, 2% on £1 billion+ assets. This to raise £15bn a year, but only affect 1% of households. These funds would be for the NHS.

The Henley Private Migration Report points to a net loss of 9,500 wealthy individuals from Britain in 2024, over double the 4,200 who left in 2023. Between 2017 and 2023 around 16,500 millionaires migrated from Britain. In part a reaction to Brexit, a demonstration of the fluidity of capital assets, moving away from actual or perceived threats.

What price the Green Party pledge faced with a huge financial outflow. For an indication of market reaction and the political consequences, consider the ousting of Liz Truss, a Conservative prime minister. Proposals alone are enough to crash an economy if they seem likely to be enacted to the detriment of financial assets.

Such is democracy under capitalism.

The Green Party can relax, however, as they know they can promise anything they like as they won’t be anywhere close to acting on such promises.

D.A.