Skip to content
CityAM
Main navigation
  • News
    • News
      • Latest Business News
      • Economics
      • Politics
      • Tech
      • Banking
      • FTSE 100 Live
      • Retail
      • Insurance
      • Legal
      • Property
      • Transport
      • Markets
    • From our partners
      • AON
      • Bayes Business School
      • Canada BIDs
      • Central London Alliance CIC
      • Destination City
      • Halkin
      • Olympia
      • Inside Saudi
      • Tottenham Hotspur Stadium
      • Santander X
      • YEAR SIX Dividend
    • Featured

      Co-Op and Next among firms launching workplace savings scheme

      Profit at Next rise 13.8 per cent in the first six months of the year

      Submit a story

      Tell us your story.

      Submit
  • Opinion
  • Sport
    • Latest Sports News
      • Sport
      • Sport Business
    • From our partners
      • The Morning Briefing: SBS x CityAM
      • Aramco Team Series
      • LIV Golf
    • Featured

      Children as young as 14 are being targeted by unregulated gambling firms on social media

      Unfortunately, without additional context from the article or details about what the image depicts, it is challenging to g...

      Submit a story

      Tell us your story.

      Submit
  • Life&Style
    • Life&Style
      • Life&Style
      • Toast the City Awards
      • The Magazine
      • Travel
      • Culture
      • Motoring
      • Wellness
      • The RED BULLETiN
      • Do it with Shared Ownership
      • Media Speak Hub
    • Featured

      Old Pulteney releases 50-year-old whisky for 200th anniversary

      Old Pulteney 50-Year-Old single malt Scotch whisky bottle with elegant packaging on display, highlighting luxury and craft...

      Submit a story

      Tell us your story.

      Submit
  • Investec
  • Events
  • Latest Paper
Tuesday 08 July 2025 5:00 am  |  Updated:  Monday 07 July 2025 6:20 pm

A wealth tax would be a disaster – and an admission of total failure

By: Christian May

Editor-in-Chief

Add as a preferred source on Google
Institutional investors are questioning the UK's fiscal credibility
Chances of a post-Budget meltdown were 'live' according to a top economics firm

Why wouldn’t Downing Street rule out a wealth tax? It isn’t difficult, you just say “we will not introduce a wealth tax” and the show moves on.

Instead, when asked about the growing clamour in Labour circles for new tax aimed squarely at the well-off, Downing Street’s spokesperson simply talked about the need for “the wealthiest in our society to pay their fair share of tax.”

I suspect the government and I are at odds over what constitutes a fair share. The top five per cent of earners (£100,000 plus) currently account for 48 per cent of revenue generated by income tax. The top one per cent (those on more than £213,000) account for 28 per cent. The idea that this group represents an under-tapped resource is laughable.

And yet, one year into a Labour government that kicked off their agenda with a £40bn tax raid we now face fiscal déjà vu; another summer dominated by speculation over which taxes will be raised in the autumn, and by how much. Ministers know how damaging that period of speculation was last summer; it led directly to depressed confidence and weak business investment.

It’s not unreasonable to expect, therefore, that if a wealth tax was off the table the Treasury would be at pains to stress as much. Instead, they sent Darren Jones to the Commons yesterday to answer an urgent question on the government’s fiscal policy, tabled by Mel Stride.

The shadow chancellor pushed the minister to rule out a wealth tax, and the minister declined to do so. Read into this what you will.

Fresh tax hikes are nailed on

Jones is a smooth operator but he did not exude confidence yesterday. Perhaps he is still traumatised from witnessing a bust-up between his two bosses; Keir Starmer and Rachel Reeves. Under a barrage of questions about future tax rises, all Jones could do was insist that these decisions will be taken in the autumn.

After last year’s mega-tax budget, the Chancellor assured us all that it was a “once in a lifetime” measure, necessary to “fix the foundations of the economy.”

As recently as a few weeks ago she was sticking to the line that she had “no intention” of coming back for more taxes, but after digging their own blackholes and with the OBR likely to downgrade growth forecasts again, fresh tax hikes are pretty much nailed on.

There are no damage-free options facing Reeves, but a wealth tax would be among the most disastrous choices she could make.

Read more

An emboldened – or desperate – new government will look to wealth taxes

Andy Burnham speaking at a Labour Party event, addressing current political issues, with a focused and determined expression.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • News
  • Opinion

Categories

  • Opinion
  • Business
  • Economics
  • Politics

People & Organisations

  • Keir Starmer
  • Labour Party
  • Rachel Reeves
  • Tax
  • Tax Hikes
  • UK economy
  • UK Government
  • wealth tax

Trending Articles

  • As it happened: FTSE 100 relief rally runs out of steam as BP and Shell weigh; Oil hits three-month low

  • Rolls-Royce shares surge as SMR unit bags multi-billion pound Swedish nuclear contract

  • London Tech Week sums up everything wrong with UK tech

  • Rathbones to suspend thousands of client account inflows after FCA probe deals £530m blow

  • KPMG’s Summer Friday half-day rollback signals deeper woes for Big Four giants

More from CityAM

  • An emboldened – or desperate – new government will look to wealth taxes

    Economics
    Andy Burnham speaking at a Labour Party event, addressing current political issues, with a focused and determined expression.
  • JP Morgan chief threatens to pull £3bn investment if Labour becomes ‘hostile to banks’

    Banking
    Jamie Dimon in a dark suit, serious expression, business setting, highlighting leadership in the financial industry
  • Gary Stevenson is predictably wrong about wealth taxes

    Opinion
    Gary Stevenson debates economist Dr Kristian Niemietz on wealth tax issues during a live event.
  • BP eyes North Sea exit as tax load bites 

    Energy
    BP is facing pressure to cut costs.
  • Wealth managers shares fall amid Starmer political storm

    Investing
    Skyline of Canada with iconic financial district buildings, highlighting UK investments and economic growth.
  • Life after Starmer: What could a new Labour prime minister mean for your money?

    Personal Finance
    Andy Burnham speaking at a Labour Party event, addressing current political issues, with a focused and determined expression.
  • ‘Economically reckless’ – Streeting calls for wealth tax ‘that works’ in pitch for leadership

    Politics
    Wes Streeting addressing media at a public event, wearing a suit and tie, with a focused expression and microphones visible
  • Governments can’t ‘tax for growth’ – they need to get out of the way

    Opinion
    Rachel Reeves delivering a speech at a business conference, highlighting economic strategies and engaging with an audience.
  • Terms & Conditions
  • Privacy Policy
  • Cookie Policy
  • News
  • Markets & Economics
  • Politics
  • Opinion
  • Life&Style
  • Personal Finance

Follow us for breaking news and latest updates

  • Facebook
  • X
  • Instagram
  • LinkedIn
Copyright 2026 CityAM Limited