The Financial Times is predictably trying to scupper a wealth tax

The Financial Times recently posted an editorial entitled ‘Britain’s damaging flirtation with a wealth tax’, lamenting the possibility that the super rich may have to pay back a small portion of the profit they’ve extracted from workers. The idea is a 2% wealth tax on assets above £10m, raising over £20bn per year.

The FT reversed reality in its article, painting the rich as mythical superheroes called ‘wealth creators’ and arguing that a wealth tax:

means a further hit to jobs, investment and tax revenues that wealth-creators do generate.

Here’s why each of those points are hot garbage.

Wealth tax garbage one: jobs

Money is how a country can organise its labour and resources: it does not create those resources nor the labour. Workers obtain and refine those resources whether its steel or minerals, the super rich do not.

A government can easily issue currency to people for work, thereby organising labour and resources such as through a publicly-owned Green New Deal.

Investment

That same point also stands here. Except replace ‘money’ with ‘investment’. Although, the FT‘s point still doesn’t make sense from a free market perspective, since there are no laws in the UK that stop foreigners from investing in the UK stock market.

Tax revenues

The UK has many regressive taxes such as council tax and VAT that apply to the poorest at the same rate as the richest. That means the least well off 10% of the country pay 48% of their income in tax, compared to the richest 10% that pay only 39% of their income in tax.

The extent of profit extraction is why we need wealth tax

The super rich are wealth extractors because they claim rent simply for ‘owning’ shares in a company – they do not do any work for the profits and dividends obtained in such a way. As of 2023, the super rich extracted a whopping 45% of the UK’s entire national income in rent, meaning everyone could almost be twice as well off without them. For comparison, in 1948, the super rich extracted 30% – so it’s gone up quite a lot.

The FT is talking neoliberal nonsense in its editorial.

Featured image via the Canary