Revenue and Distributional Modelling for a UK Wealth Tax, 2020-2021

Advani, Hughson and Tarrant (2021) model the revenue that could be raised from an annual and a one-off wealth tax of the design recommended by Advani, Chamberlain and Summers in the Wealth Tax Commission’s Final Report (2020). This deposit contains the code required to replicate the revenue modelling and distributional analysis. The modelling draws on data from the Wealth and Assets Survey, supplemented with the Sunday Times Rich List, which we use to implement a Pareto correction for the under-coverage of wealth at the top.<p>Around the world, the unprecedented public spending required to tackle COVID-19 will inevitably be followed by a debate about how to rebuild public finances. At the same time, politicians in many countries are already facing far-reaching questions from their electorates about the widening cracks in the social fabric that this pandemic has exposed, as prior inequalities become amplified and public services are stretched to their limits. These simultaneous shocks to national politics inevitably encourage people to 'think big' on tax policy.

Even before the current crisis there were widespread calls for reforms to the taxation of wealth in the UK. These proposals have so far focused on reforming existing taxes. However, other countries have begun to raise the idea of introducing a 'wealth tax'-a new tax on ownership of wealth (net of debt). COVID-19 has rapidly pushed this idea higher up political agendas around the world, but existing studies fall a long way short of providing policymakers with a comprehensive blueprint for whether and how to introduce a wealth tax.

Critics point to a number of legitimate issues that would need to be addressed. Would it be fair, and would the public support it? Is this type of tax justified from an economic perspective? How would you stop the wealthiest from hiding their assets? Will they all simply leave? How can you value some assets? What happens to people who own lots of wealth, but have little income with which to pay a wealth tax? And if wealth taxes are such a good idea, why have many countries abandoned them?

These are important questions, without straightforward answers. The UK government last considered a wealth tax in the mid-1970s. This was also the last time that academics and policymakers in the UK thought seriously about how such a tax could be implemented. Over the past half century, much has changed in the mobility of people, the structure of our tax system, the availability of data, and the scope for digital solutions and coordination between tax authorities. Old plans therefore cannot be pulled 'off the shelf'.

This project will evaluate whether a wealth tax for the UK would be desirable and deliverable. We will address the following three main research questions:

(1) Is a wealth tax justified in principle, on economic or other grounds?
(2) How should a wealth tax be designed, including definition of the tax base and solutions to administrative challenges such as valuation and liquidity?
(3) What would be the revenue and distributional effects of a wealth tax in the UK, for a variety of design options and at specified rates/thresholds?

To answer these questions, we will draw on a network of world-leading exports on tax policy from across academia, policy spheres, and legal practice. We will examine international experience, synthesising a large body of existing research originating in countries that already have (or have had) a wealth tax. We will add to these resources through novel research that draws on adjacent fields and disciplines to craft new solutions to the practical problems faced in delivering a wealth tax. We will also review common objections to a wealth tax.

These new insights will be published in a series of 'evidence papers' made available directly to the public and policymakers. We will also publish a final report that states key recommendations for government and (if appropriate) delivers a 'ready to legislate' design for a wealth tax. We will not recommend specific rates or thresholds for the tax. Instead, we will create an online 'tax simulator' so that policymakers and members of the public can model the revenue and distributional effects of different options. We will also work with international partners to inform debates about wealth taxes in other countries.</p>

Advani、Hughson与Tarrant（2021）针对Advani、Chamberlain及Summers在财富税委员会（Wealth Tax Commission）2020年最终报告中建议的年度及一次性财富税设计，对其可能产生的收入进行了建模。本数据集包含复现收入建模与分布分析所需的代码。该建模基于《财富与资产调查》（Wealth and Assets Survey）的数据，并辅以《星期日泰晤士报》富豪榜（Sunday Times Rich List）的数据，我们利用后者对顶层财富覆盖不足的问题实施帕累托修正（Pareto correction）。

在全球范围内，应对COVID-19所需的史无前例的公共支出之后，不可避免地会引发关于如何重建公共财政的辩论。与此同时，许多国家的政客已面临选民提出的深远问题——这场疫情暴露了社会结构中日益扩大的裂痕，先前的不平等现象加剧，公共服务也已不堪重负。这些对国家政治的同步冲击，不可避免地促使人们在税收政策上“大胆思考”。

甚至在当前危机之前，英国就已广泛呼吁对财富征税制度进行改革。迄今为止，这些提议主要集中在改革现有税种上。然而，其他国家已开始提出引入“财富税”的想法——这是一种针对财富所有权（扣除债务后的净值）的新税种。COVID-19迅速将这一想法推上全球政治议程的前列，但现有研究远未为政策制定者提供关于是否及如何引入财富税的全面蓝图。

批评者指出了若干需要解决的合理问题：这是否公平，公众是否会支持？从经济角度看，这种税是否合理？如何阻止最富有的人隐藏资产？他们是否会纷纷离开？如何对某些资产进行估值？拥有大量财富但收入微薄、无力支付财富税的人会怎样？如果财富税是个好主意，为何许多国家已放弃它？

这些都是重要问题，却没有简单的答案。英国政府上一次考虑财富税是在20世纪70年代中期，这也是英国学术界和政策制定者最后一次认真思考如何实施此类税收。在过去半个世纪里，人口流动性、税收体系结构、数据可获得性以及数字解决方案的范围和税务机关之间的协调都发生了巨大变化。因此，旧计划已无法直接“照搬使用”。

本项目将评估针对英国的财富税是否可取且可行。我们将解决以下三个主要研究问题：（1）从经济或其他角度看，财富税在原则上是否合理？（2）财富税应如何设计，包括税基的定义以及估值和流动性等行政挑战的解决方案？（3）对于各种设计方案及特定税率/起征点，英国财富税将产生怎样的收入和分布效应？

为回答这些问题，我们将利用来自学术界、政策领域和法律实务界的全球顶尖税收政策专家网络。我们将考察国际经验，综合分析来自已实施（或曾实施）财富税国家的大量现有研究。我们将通过新颖的研究补充这些资源，该研究借鉴相邻领域和学科，为实施财富税所面临的实际问题制定新解决方案。我们还将审查对财富税的常见反对意见。

这些新见解将发表在一系列“证据文件”中，直接向公众和政策制定者开放。我们还将发布一份最终报告，其中包含对政府的主要建议，并（如合适）提供“可直接立法”的财富税设计方案。我们不会推荐该税的具体税率或起征点，而是将创建一个在线“税收模拟器”，以便政策制定者和公众能够模拟不同方案的收入和分布效应。我们还将与国际合作伙伴合作，为其他国家关于财富税的辩论提供信息。