Gary Lineker joins calls for wealth tax - The Latest

0:00This is The Guardian.

0:30It's really interesting to see Andy Burnham's stance on this because they do need to raise more money. The idea of something that is wrapped up in fancy wrapping and is called a wealth tax, I think that's for the birds.

0:41Nosheen Iqbal:From The Guardian's Today in Focus, this is The Latest with me, Nosheen Iqbal.

0:49Nosheen Iqbal:Gary Lineker has put his name to a letter calling for millionaires like himself to be taxed. More, I should say. Aditya Trakravorty, you're the Guardian columnist, senior economics commentator, and recently rewarded an MBE for public service. A low-flow machine. Public understanding of economics. No, it's an honour, literally. So who better to explain to us the concept of a wealth tax? Namely, let's start with why the idea of it becomes so popular again? It speaks to a huge frustration that I think is felt not just in this country, but across rich countries. In Britain, we haven't had much in the way of growth in our wages for nearly 20 years since the banking crash.

1:38It's a very highly unequal economy. We see in the news, and in fact, our news is increasingly controlled by billionaires. we're going to go on a platform which is owned by billionaires right um and um the wealth tax speaks about great frustration like what why do these people get to run our world how do we get to have more of a degree of power back and how do we get some more money back why am i being taxed all the time for all these things and it feels like my life is very hard and i can see these people at the top and their life's not hard and not only is their life not hard they're taking more and more stuff.

2:19And the wealth tax speaks to all of that.

2:21Nosheen Iqbal:And so before we get to the mechanics of how it works, there's this idea that it would raise about 15 billion pounds for the Treasury, something that Zach Polanski, leader of the Green Party, has also put forward as something that he would absolutely back. Does that sound about right? So just to be really clear, what Zach Polanski is proposing is an annual tax on people's wealth. And he's saying that would raise about 15 billion pounds. Estimates really vary. They're all over the shop on this stuff, Nesheen. We haven't had a wealth tax in this country for so long that I wouldn't take any of the figures too seriously.

2:57So yes, it could be 15 billion, it could be 10 billion, it could be more or less. I've seen independent experts come out with a figure which is closer to 10 billion. But there's no reason to believe that Zaplanski is wrong.

3:09Nosheen Iqbal:Okay, so to the question of how, what exactly would be taxed? how much how will it work what is Gary Lineker saying take more of and how would the government do it so the wealth tax that's been proposed by the likes of um Zaplansky and Gary Lineker and the economist Gary Stevenson is basically that someone comes around with a form once a year and they say so how much have you got in assets which means everything from your house to your fine art your stock portfolios maybe a collection of wines I don't know Nishine sounds very much like me of Of course, yeah. All of these things. Collection of bikes.

3:47Who knows? But the point is they say, OK, over a certain threshold, let's say£10 million, you'll pay 2 % of a levy on that. Now, what I should say is that the best and most comprehensive study of wealth taxes in this country, which was done during the COVID pandemic by a group called the Wealth Tax Commission, said that is not the way to go.

4:12Nosheen Iqbal:Right. That will raise you some money. About£10 billion was their estimate. But if you really wanted a wealth tax and you really wanted to raise cash, you go hard and you do a one time raid. So tax man all of a sudden at the stroke of midnight tonight says, OK, everyone who's got assets over a certain threshold, actually their threshold is a lot lower. It would be someone who owned a house in London, say, or Manchester. you pay a certain levy and then that's it there's no more wealth taxes ever again and they reckoned you could raise about 300 billion pounds back up i'm not sure i understand tell that to me again so the more you own the higher you pay or no no okay it's just a one-off flat rate so the key thing about the one-off thing is it really is just one time it's done at the dead of night you cannot plan for it you do not have time to get your accountants and lawyers on the line right you can't dodge it and it applies to a lot more people than the supposed billionaires and multi multi millionaires it applies to people who might think of themselves as being living perfectly ordinary if comfortable lives in cities who will have to pay a lot more but the key but the other big advantage of that they said is you could just raise so much money you could raise something close to 300 billion pounds in one go.

5:34Nosheen Iqbal:Wow. Now that's a sizable chunk of change. I mean, with a huge caveat that it'd be so unpopular with a grand sway of the people who aren't, as you say, they don't consider themselves to be rich, but would definitely be stung by it. That's such an interesting point, Nishine. Because my sense of how a lot of people feel, whether they're rich or poor, is they feel taxed out already. And every time a tax comes around, whether it's done by Rishi Sunak or Rachel Reeves, people go, oh, God, this again. And if you look at the figures, the tax burden, as some economists call it, is at its highest since the Second World War.

6:11So we're paying more in tax as a share of our pay packets than we have done for 80 years. Now, there is also a big problem in this country that it is completely obvious to anyone who walks around that our public services, our public infrastructure, the public realm, our parks, our nurseries, our schools, none of them in the best of repair, right? This is what having years of austerity does to you.

6:38Nosheen Iqbal:Inequality is stark. And not only is inequality stark, but the deterioration of our public realm is really, really obvious to anyone who tries to use it. So we've got to get money from somewhere. And the wealth tax people say, well, this is how you do it. I guess my kind of chief quibble of this is that they say the wealth tax is basically how you go about doing all sorts of different things. Not only do you raise a bit of money, you start to turn back the forces of inequality. You rein in the billionaires. But what else then could be done? I mean, from what I understand from passing your pieces, Aditya, that you aren't necessarily a huge fan of the wealth tax in its current proposal because you don't think it raises enough money.

7:18Nosheen Iqbal:But for a lot of people, even the symbolism of what would be seen as an act of courage by any government to try and address the disparities in wealth would be taken, you know, I'd say, you know, pretty positively. But what are the other alternatives that you would propose? A tax on wealth and a tax on the money that you make from properties and financial assets. That's all good, right? That will raise you some money. But it won't achieve all the various things that wealth tax campaigners are calling for, because for that you need to do a lot more. This is a highly unequal country. It did not just happen overnight.

7:52It happened because we sold off our public sector. We squeezed our unions. We took away working rights from people. So actually, if we continued on the same share of wealth and worker power that we had in the 70s, the average household would be something close to 10 grand a year better off. That's how far back we've gone. So if you want to reverse that, then what do you need? Well, you need to have more services back in the hands of the public sector. You need to have stronger trade unions. you need to have a better news and information ecosystem, which is not in the hands of tech oligarchs, which means more publicly owned media.

8:33And you need generally to have a shift in relations between Labour and capital back towards capital, as we used to have in our past.

8:42Nosheen Iqbal:And how confident are you, given we're about a week in of the new Prime Minister and every day there's a new announcement, how confident are you that this is something that the Burnham administration cabinet may consider?

9:09Okay.

9:38Really?

9:42Nosheen Iqbal:But it captures the imagination, doesn't it? Yes. Something called a wealth tax does capture the imagination and it does speak to a frustration that lots of people have with our politics and economics? Why is it me that's always getting taxed? Why isn't it other people? The thing is, is that if you're sat in the Treasury and imagine you're a civil servant in Treasury trying to get a budget together, well, you have these taxes already that you use on wealth. Why would you not just use those taxes which are already there and raise them, which would get you more money in, as opposed to just trying to confect a new tax, entirely new, and say, let's call that a wealth tax.

10:24For that, you need an actual popular mandate. And that was not something that the Labour Party campaigned on in 2024 in their manifesto. There's no mention of wealth tax. And so it'd be very difficult for Burnham to bring something like that in.

10:38Nosheen Iqbal:So make the taxes we have more efficient, make them pay better rather than spend fiscal capital on creating an entirely new one. But what I would love to see from Andy Burnham is I'd love to see stronger trade unions. I'd love to see more public services back in the hands of the public. And I'd love to see something done on media regulation so we have less of the will of Elon Musk and Mark Zuckerberg running things. Amazing to be seen. Aditya Chakraborty, thank you so much for your time. Thank you. That's it for today. My huge thanks again to Aditya Chakraborty, Guardian columnist and senior economics commentator.

11:12Nosheen Iqbal:Thanks for listening to this episode of The Latest. Today in Focus, we'll be back with you as usual tomorrow morning and we'll be back tomorrow night. This episode was produced by Angus Neal. The senior producer is Ryan Ramgobin. The executive producer is Zoe Hitch. And it was presented by me, Nosheen Iqbal.

11:33This is The Guardian.