The expected next PM has discovered a revolutionary solution to the nation’s budget crisis: a wealth tax that doesn’t actually make anyone wealthy uncomfortable. He may have to “ask for a little more,” he warned this week, before immediately clarifying that by “more” he means “slightly more, but only from people who can afford it, which is nobody, so never mind.”
The math here is exquisite. A wealth tax on the rich is politically necessary because voters keep noticing they’re broke. But a wealth tax that actually funds anything is politically impossible because the rich donate to campaigns. So the compromise is a wealth tax with so many exemptions, thresholds, and “difficult choices” built into it that by the time it passes, it will raise approximately the cost of three civil service lunches per year.
Why propose a wealth tax at all if you’re going to immediately neuter it? Because it plays in the press release. The headline reads “Labour Eyes Wealth Tax” and the financial press relaxes. The actual mechanism—a tax so narrow and carefully constructed that a competent accountant can step over it—gets buried in paragraph twelve, which is fine because nobody reads past the subheading anyway.
The next PM is not wrong that difficult choices are coming. The difficult choice is whether to actually tax wealth or simply announce you’re thinking about it very seriously while keeping the lights on with the same revenue sources that haven’t worked since 2008. He’s chosen door number two, which requires absolutely no courage and exactly the right amount of plausible deniability.