boost to the public purse in the wake of the pandemic. One model mooted by the group would see a one-off tithe of 5 per cent on wealth above a threshold of £500,000 for individuals and £1 million for couples (once debts such as a mortgage had been taken into account). Such a tax could lead to Sir James Dyson, Britain’s richest person, paying more than £800 million. Advani and his team project that, in total, the tax would raise £260 billion after administration costs. Usually, the first argument against wealth taxes relates to efficacy; rich people will simply move elsewhere to avoid pay- ing. Anticipating this, however, Advani and his colleagues have proposed a model that would see anyone who had been pres- ent in the UK for four or more of the last seven years obliged to pay the tax. (Someone who had been present for just four of the last seven years would pay less tax than someone who had been present for five, and so on.) But imagine the following,

says James Quarmby, a partner at law firm Stephenson Har- wood: It is a sunny spring day. You are out for a walk and spot a beautiful flower on the other side of a lawn. You walk across the lawn to smell the flower and continue on your walk. Then, seven years later, you receive a demand for £10,000 – because it has been decided anyone who walked across the lawn in the previous seven years must pay a tax. That might seem unfair; if you had known that your behav- iour would have such a cost, you may have acted differently. ‘I have serious doubts as to whether [the proposals are] actually lawful,’ says Quarmby. ‘That looks dangerously like retrospective taxation, and that’s not allowed. That’s unconstitutional. Do we want to turn into a banana republic where we can just confiscate stuff from people because we don’t like them? Everyone would lose all respect for the UK and no one would invest anymore. Unfortunately, the country would suffer.’ France has had a wealth tax since 1989, although its scope has been significantly reduced by Emmanuel Macron. ‘There are very few wealthy families in France,’ says Quarmby. ‘The L’Oréal family stayed behind and a couple of others. Everyone else has gone to Swit- zerland, Belgium.’ He notes that under Socialist president François Hollande, youth unemployment in France reached 25 per cent. While the European Union has made efforts to ‘harmonise’ its tax system, tax competition between nations continues to exist – and continues to afford wealthy people the opportunity to avoid tax re- gimes where they feel they do not get a good deal. That’s no bad thing, according to Dr Madsen Pirie, president of the Adam Smith Institute. ‘Some people want world government,’ and a world tax sys- tem, says Pirie. ‘But I’m in favour of variety. John Stuart Mill thought

that Europe prospered because of its variety, because of its many dif- ferent governments.’ If one government made your life uncomforta- ble (in Mill’s day most likely because of your religion) notes Pirie, you had the ability to move somewhere more to your liking. The US – which could theoretically offer billionaires the choice of

paying a wealth tax or renouncing their citizenship – might be best equipped to enforce one. But surely this is at odds with the American Dream. The majority of Ameri- cans (82 per cent) – and even of Democrat voters (73 per cent) – believe it should be possible to become a billionaire, according to a 2019 survey by the Cato In- stitute, a libertarian think tank. After all, the existence of bil- lionaires does not make other people poorer; the economy is not a zero-sum game. However, says Pirie, there are three types of billionaires: kleptocrats, those who have inherited wealth, and entrepreneurs. Those in the final group (and those in the second who invest in a laudable way) can be regarded as a net-positive influence. Jeff Bezos and Elon Musk, to take two examples, have generated wealth by creating things that have improved people’s lives. What’s more, they fund impor- tant projects that range from supporting high-quality jour- nalism (Bezos has invested heavily in the Washington Post) to laying the foundations for interplanetary travel (Bezos and Musk both have space ex- ploration companies).

Philanthropy is an important part of this conversation too. Gov- ernments spend ‘according to political pressures,’ notes Pirie. This leads to budgets being stretched to cover competing concerns. ‘I don’t think that achieves as much as the tightly targeted wish of a single person,’ says Pirie. ‘The electorate probably wouldn’t fund the elimi- nation of malaria, like the Bill and Melinda Gates Foundation is.’ And while the proportion of billionaires’ wealth donated to phil- anthropic causes could be significantly higher, there are signs – such as Jeff Bezos’s recently announced $10 billion climate change fund, Bill Gates’ ‘Giving Pledge’ and a spate of donations in the response to the pandemic – that more good can come from wealth that is freely given by those who earned it. An approach that acknowledges the real-world implications of a wealth tax while emphasising the importance of genuine philanthro- py might be the most sensible and sustainable. Especially if the alter- native is rhetoric that vilifies people simply because they are wealthy and proposes sudden and radical tax changes that could destabilise whole economies. Then again, perhaps this is itself an unrealistic idea, in a world that is characterised by polarisation and culture wars more than ever before. S


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