Why speak when you have won the game? McGough admits her ‘tough’ working-class past could make her more likely to feel she’s had ‘enough’ now. She left school for her first job at 16 and started her first business with her ex-husband with “two laptops and a list of contacts”. Luck and timing played a part: his RF compliance business ended up being part of a growing industry, and the ability to hire workers from the European Union contributed to his success.
Patriotic millionaires are eager to underscore the economic argument that wealth taxes could increase stability and help sustain both a healthy, educated workforce and a middle class of consumers with a disposable income. So paying more taxes might end up being good for wealthy businessmen. For McGough, however, it’s about fairness and common sense in a time of growing inequality and deteriorating public services. The richest 1% of Britons own more wealth than the poorest 70% combined. “I see it as a problem if you have so much money that you don’t need a functioning society anymore,” she says. “The country needs the super rich to pay an appropriate share of taxes.”
The million dollar question, then, is how much tax?
The group bases its proposals on research on wealth taxes and inequality, with an added dose of pragmatism: “Inheritance tax will never change,” says McGough. In the UK, the group is asking for an annual wealth tax of 1-2% on wealth over £10m, which would affect around 20,000 people but could generate up to £22bn a year , according to an analysis by the Wealth Tax Commission. at LSE and the University of Warwick. That would be almost enough to give the entire public sector a salary increase in line with inflation.
Although wealth taxes are not a new idea, many of these taxes were abolished in the 1980s and 1990s, and only four European countries – Spain, Norway, Switzerland and Belgium – collect taxes on net wealth, with levies in France and Italy on certain assets. .
Cases against a wealth tax range from “I’m already paying enough,” which McGough says he’s encountered a lot, to arguments about administrative costs, the risk of capital flight and the potential increase in evasion and fraud. tax. It was a combination of bureaucratic problems and fears of a crisis of confidence in the markets that prevented the government of Harold Wilson from introducing a wealth tax in the UK in the 1970s.
As for capital flight, it is recognized that some wealthy people may leave or move their money as a result of tax increases. But analysis by Cristobal Young, an assistant professor of sociology at Stanford University, suggests the majority would stay. While 5% of billionaires live a transnationalist lifestyle between London, Switzerland and tropical tax havens, the remaining 95% live in the country where they were born, educated or started their business.
A new class of conscious multi-millionaires – the UK branch has yet to land its first billionaire – are using their access to advocate for new wealth taxes directly to cross-party parliamentary groups, in partnership with Tax Justice UK. Events focusing on tax, investment and social mobility are planned for 2023, although the group is generally opposed to this kind of influence of wealth on politics via private lobbying and its undermining of faith in democracy. . For now, invitations to Westminster are considered a necessary evil.
Perhaps the moves are also a signal that self-interest extends beyond the business case. While some billionaires are building fancy bunkers, American members like investors Nick Hanauer and Karen Stewart are concerned about the forks and fate of Marie Antoinette and the Romanovs.
The plea of patriotic millionaires to tax the rich could be powerful precisely because it comes from the rich themselves. Researchers from King’s College London and the University of St. Gallen, Switzerland, studied the history of wealth taxes in 2021, with data since 1880 in 45 countries. They found that forces of democratization and modernization, and even the outbreak of wars, generally do not accelerate the introduction of wealth taxes. Instead, they were mainly used as an emergency tax when countries faced the shock of an economic downturn. As with McGough’s own success in business, timing could be everything.
This article first appeared in the May/June 2023 edition of WIRED UK