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Kanzeon's avatar

In the US wealth taxes are widespread but we call them property taxes and they are typically levied on real estate at the local level. It works just fine. People argue over whether to increase them or lower them, people argue about whether the value has been assessed correctly, but overall it just works.

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Alchemist's avatar

One further consequence of any large (over about 0.5%-1% pa) wealth tax:

People with wealth - who are mostly aged 50+ - can and will relocate to other jurisdictions. Several very habitable countries give residency for retirees. Saves the UK a bit in healthcare costs... but overall bad for public finances.

People running growing successful businesses would also have an incentive to scoot off elsewhere. So we would be mainly left with just those businesses tied strongly to the UK (eg property sector) or to uk govt money. Not great.

One area where i do diverge is i think we should scrap stamp duty and council tax and replace them with a tax on property ownership that is proportionate to value. Indexed to property values and revaluing after any major works. With suitable adjustments for single occupancy, holiday homes, probably with exemptions for some businesses (eg working farms, heritage properties open to visitors all week) etc.

Stamp duty is a brake on freeing up properties that are too big for their owners, and council tax fails to tax big properties adequately, fails to charge developers anything for sitting on land banks for decades.

Fixing this would be a big step to making housing more affordable.

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