Why millionaires like Gary Lineker want to pay more tax

0:02Sky News, the full story first.

0:11Gary Lineker and more than 100 other millionaires are begging to be taxed more. This is why.

0:21How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open, and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.

0:58Politicians are forever being told to listen to business leaders, entrepreneurs and wealthy investors. So this one should be pretty straightforward. More than 100 millionaires have written to the government with a clear request. Please tax us more. Some people don't want to cheat on their taxes. I'm one of them. I understand why taxation exists. I understand that we want to provide proper public transport, proper education, proper housing for everybody. And we're happy to pay taxes for that. That was Brian Eno, producer, musician and member of Patriotic Millionaires UK, a group of one percenters, including Gary Lineker and the city trader turned economic evangelist Gary Stevenson.

1:42Their proposal is a 2 % annual tax on wealth above 10 million pounds. They say that could raise£24 billion every year. It's an arrestingly simple argument. Public services need money. Ordinary workers are already paying plenty. And here is a group of millionaires bucking the trend and saying we stand ready to help. Some people have always chosen to move their money to effectively tax havens because they really don't have that social responsibility. But that doesn't mean that that's most people at all. Julia Davies is a businesswoman and founding member of the UK branch of Patriotic Millionaires.

2:19Julia, just explain the thinking behind Patriotic Millionaires. Where did the idea come from? What is your problem with those that could be easily described as filthy rich? Right. So Patriotic Millionaires started in America. You may have heard of Abigail Disney, literally a Disney princess. She's one of the members in America. And then it's been in the UK now for about four to five years. And the idea really is to try to explain to people what it means that we now have extreme wealth inequality and try to explain what extreme wealth levels are. We have no problem with people who are filthy rich.

2:54It's absolutely right that when people work hard and they take risks, that they're able to benefit from that and benefit for their family too. But it's absolutely also right that when we have wealth concentration in the hands of a relatively small number of people, that we look to that money to address the many problems that we're facing as a society. I kind of almost fell into getting involved with the organisation. I mostly try to use my time now and my money to help address overall environmental problems, the climate crisis. But I supported a campaign by Tax Justice UK and I started to read more and more about this.

3:28And when I really realised how serious the problem was, was when I read one statistic, which was that just over 35 years ago, when the Sunday Times Rich List started, public net wealth, that's total assets which we as a country own, less our liabilities, was about£340 billion. 35 years later, that had plummeted to minus£1 trillion in debt as a country. And during that same time, the 200 wealthiest families who are on that rich list, their wealth had gone up 17 times over. So there'd been this exponential growth in the wealth of a few wealthy families. And at the same time, public wealth had gone down.

4:09So we often think about inequality as a problem about poverty, but also it's about what we have as a nation. It's about public wealth. It's about all the things that we have been losing because we've not been funding public services and infrastructure properly. So a big story today is about the failures in our criminal justice system. And those failures go right across the system from prevention of trying to keep people from getting in trouble with the law right at the beginning, right up to now, unbelievably, having to let prisoners out of prison early because of a crowd. So exactly, you and 120 other millionaires have written this letter to the government.

4:48What exactly is it that you would wish to see them do to solve that long list of problems? Yeah. So we need to be looking to where the money is. So we have 10 proposals which put together would bring in much, much needed 50 billion pounds a year. The one that gets talked about a lot is the wealth tax that we propose, really moderate wealth tax. And it's really important to look at that in a little bit of detail. So our proposal is that those who have wealth above£10 million, they pay a really small proportion of tax on wealth above that£10 million. So if you've got£10 million in assets, you are sorted.

5:27You are not worrying about how you put food on the table, how you heat your homes, as many, many British people are. The wealth tax would just be 2 % on wealth above£10 million. pounds. But sometimes we focus too much on the tax that is being given and not enough on the wealth that is being retained. So just remember that if you've got 11 million pounds, you would pay 2 % on 1 million. That means of that one extra 1 million, you're keeping 980 ,000 pounds on top of your 10 million. And then you apply that to every million above that. Hopefully that makes people realise that this is not going to be causing any strain to anybody at all.

6:06But the argument from Patriotic Millionaires appears to be that wealth is undertaxed. But wealthy people are already paying capital gains tax, inheritance tax, tax on dividends, council tax, stamp duty. They're already paying a fair old wag on the basis of the amount of wealth that they have, don't they? Well, they're not really paying on wealth that they have and don't transfer during their lifetime. And we have to look at this in proportionate terms. So when you remember that just 50 of the wealthiest families in Britain now have between them more wealth than half of all British people. Well, I'm more than happy if you want to go after the top 50 families in the United Kingdom.

6:43But your proposal is rather broader than that, isn't it? Well, with the wealth tax, it's people with wealth above 10 million. But it does mean that we now need to look outside of just focusing on taxing income. And the longer we delay making these changes, the more problematic it becomes, because the more that we have concentration of wealth away from working people, away from the middle classes, away from people who are holding up our public sector, who are keeping our schools going, keeping our hospitals going. How many of the signatories to the letter would fall into this class, own more than £10 million worth in assets and would be contributing under this scheme?

7:19I don't know that, but our recent polling, 80 % of millionaires support a wealth tax, but 85 % of millionaires who would be covered by this wealth tax support it. So, you know, our polling shows that actually most people with wealth understand that they want to support the country that they live in. That piece of research, though, was pushed by your own organisation. I think there were around about 500, 600 respondents to it. Of that number, one has to suspect that it was a smaller fraction, that it has assets of over 10 million. I'm just wondering how representative that kind of sample size is.

7:51Why would someone who is earning that amount of money or who has assets that large wish to pay more than they already do? Because they want to live in a country that's thriving. They care about their families and friends. So why don't they? Already, you can pay as much tax as you like to HMRC. And if there was an opportunity to lead by example, then surely this would be it. Because if a couple of people do, it doesn't bring in that 50 billion that we're bringing if we bought in our 10 billion. I thought it was 85%. I thought it was 85%. We're in support of this. Of those polled, as you said, of those polled.

8:21And taxation isn't something you do voluntarily. In the Victorian era, we relied on philanthropy for setting up hospitals and looking after orphans. And if we could rely on philanthropy, it wouldn't be where we are now, where we have an NHS that's struggling. We have increasing child poverty. We have the return of Victorian era diseases like scurvy and rickets. You know, and that's shocking. So it shows you can't rely on philanthropy. Philanthropy is not democratic for a start. So yeah, I do philanthropy, but I choose where I donate that money. If we want to have well-funded criminal justice system, which means that we don't have to allow prisoners out of prison early, then we need to fund that.

9:02And anyway, we can do that essentially. And that's the democratic way of doing it. I don't mean to labour the point, but if there is this support amongst people that rich for a change like this, you're calling on the government to bring in this change. Why is no one simply leading by example? I mean, philanthropy is one thing. You could voluntarily give to the exchequer the amount of money that you would owe under the scheme that you are proposing and demonstrate that there are people out there who are willing to do it. That's a really convenient argument for all of those billionaires or multimillionaires who are pushing back against this.

9:32Tax is something that applies to everybody that comes within the remit of that tax. We don't ask working people to voluntarily pay more income tax. So if we want to bring in the 24 billion, which we estimate would come in from this wealth tax, we need to bring in that as a tax to expect that people will move their philanthropy from the causes that they're currently supporting and put that towards the government. when the government isn't stepping up and introducing that tax isn't really a viable response to this. The response to this that we actually need is for the government to have the ambition of accessing this money, which at the moment is just, it's not really serving our country well.

10:09I 100 % concede that the country is in a state right now. And frankly, there is a need for greater spending in certain areas. I suppose the problem that a lot of people have with schemes like this does come down to practicalities. For example, HMRC, not the most efficient organisation at the best of times. I mean, how would they work out whether someone is on the right or the wrong side of that 10 million in assets line? So they would do what happens right now. We ask all the tradesmen out there working, they have to fill in returns. So the thing with the wealth tax is it would apply to a relatively small number of people and it would be really worth doing it.

10:45So at the moment, HMRC dedicate an awful lot of time on the tradesmen that are basically bringing in just about enough to sort of cover their family and everything. And a lot of time and attention is directed on them. Not enough time and attention is directed on those who have lots of money who could actually be contributing more to all of this. So we already have inheritance tax where people have to do it themselves. They're required to report on the wealth of the person who's deceased. This would do the person themselves reporting on the wealth that they have. So, yes, this would take a little while to come in.

11:18Something that we could do straight away is we could equalise capital gains tax with income tax and bring in a few other reforms that we're talking about. And that would bring in an extra 12 billion, we estimate, a year. And it would really make things an awful lot fairer. There are people that are working as hard as they can and they are paying higher rates of taxation on their work, on their labour, than people pay on income that they get from their wealth. That doesn't seem reasonable in any way to me. And it's a really simple fix that we could sort out right now. But for those rich individuals for whom the majority of their kind of assets come from private business, we are in essence talking about giving a valuation on every individual private business that falls within this category on the 31st of March every year.

11:59You're previously a business owner yourself. Did you know how much your firm was worth on March the 31st every year? Yeah, and there will be some tricky areas. I don't deny that. But let's not just allow us focusing on slightly more tricky areas. Let's just remember there are a lot of easier ones than that. There's all those mansions in London. There's all those great big landed estates. There's lots and lots of wealth which is in stocks and shares, which can be valued. We can do this. Of course, there's going to be some areas that are going to need some significant thought. And we do need to think about how we continue to encourage people to invest in those businesses, which we need within the UK.

12:32I could have a good chat to you about some areas which I think we need to focus on there. But the fact that there are some things that are going to require a little bit of thinking about shouldn't stop us from looking at this. The fantastic thing is we can do this. We can do something about it. The wealth is here within the UK and we need to stop being hesitant about this. And we need to start just making sure that wealthy people, really wealthy people, they know what's expected of them. And we stop giving them a free pass, which we don't give to small to medium sized businesses or working people.

13:01But isn't part of the reason for the hesitancy entirely practical that schemes like this have been tried in other countries and on the whole have not worked in the way in which they were supposed to? Can you point to an international example where this has actually gone well? There are countries where this is still going on. There are countries where some things weren't done as well as they could, but that's brilliant because it means we can learn from that. I think that something that has got to accompany these changes would be an exit tax. And that's absolutely completely fair. If somebody has made a lot of money in this country and then chooses, once they've got that money, to move it out of the country so that they're not then contributing to the country who enabled them to generate that wealth, I think it's absolutely right that there should be some kind of levelling out tax at that point in time.

13:43Isn't that just an admission that introducing a wealth tax of 2 % on assets above 10 million will force people into seriously thinking about taking their wealth out of the country? Well, that's the wrong terminology. Asking people to contribute to public services and infrastructure is not forcing anyone to do anything. That's a choice that some people make. Some people have always made that choice. Some people have always chosen to move their money to effectively tax havens because they really don't have that social responsibility. But that doesn't mean that that's most people at all. Uphoning doesn't back that up.

14:14Clearly, this is a policy where we need to look at the international examples. We need to look at the means by which we would stop people from transferring assets to children, putting things into trust, however they would wish to avoid kind of falling foul of this. So with respect, I'm wondering if this letter that has been written to the government is genuinely in pursuit of this policy and this policy now, or if it's a bit of a flag raising exercise. You bring some attention to this topic, get people talking about it, and perhaps some way down the line, we might find a government who'd be interested.

14:48I, for one, feel a real responsibility for my country, for my kids, my friends and my family, that we do try and tackle this. And I think we need to start really pulling together as a country and thinking about what we need to do, because things are going to get a lot worse unless we do that. And it's the really frustrating thing is that they could be so much better. Julie, can I end just by being, you may think I've been cynical all the way through this interview, but end by being just a tad cynical. What is the real purpose behind the wealth tax, the 2 % tax? Is it genuinely about raising money to improve public services?

15:23Or isn't, let's be honest, part of it, at least part of it about reducing extreme wealth in this country? I don't have any problem with saying that would be a great aim, but unfortunately, the proposal that we have wouldn't do that. We absolutely should be trying to address reducing extreme wealth concentration because it's undemocratic. It really is perverting our democratic process because those with those extreme levels of wealth have extreme access to the ears of those people who are making decisions in our country. You're speaking to me right now, you know. Yeah, but this is really, really serious thing that we need to think about.

15:57We have people who have more wealth than small countries. It is a serious problem, but a 2 % wealth tax is not going to address that. We need to be talking about those things as a society, about is that right? Is that what we want? I think we should stop treating it as socially acceptable to not want to contribute to the country which enabled you to make your wealth. Julia Davis, it's been a pleasure talking to you. Thanks for your time. Thank you. That is your lot for today What do you make of this intervention by Gary Lineker and others? Do you want them to pay more tax? Would you be willing to pay just that little bit more to get public services back on track?

16:32Let me know why at sky.uk We're back tomorrow

16:47How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.