Recently, I caught self-styled 'Inequality Economist' Gary Stevenson's Documentary, How to Get Filthy Rich on Channel 4; to say it frustrated me would be an understatement. The fundamental thesis of the documentary is that rising inequality is going to leave the grand majority of the population worse off, (which is true) and that the solution to this is a wealth tax. I've explained my concerns with a wealth tax before, but I think I'm going to go into more detail on my problems with it here, not only because it is becoming a thorn in the side of serious Left-wing economics, but also because I fear it is becoming an all-encompassing slogan that fails to present a real and nuanced vision for the economy.
To be fair to Stevenson, he does have to deal with some pretty odious people - while it is incredibly clear in the documentary the degree to which people have continued to suffer since 2008, with a particularly stark moment being his visit to the Bristol caravans, showing how the average £2000 rent in the city has left people without secure housing even when they've worked their whole lives, dividing the community over the health risks this has posed - many of his richest interviewees are seemingly uninterested; his first Interviewee and Reform party donor Bassim Haidar, essentially argues that any sufficiently hungry person can get rich, seemingly unaware that unlike him, most people who live paycheck-to-paycheck would rather be frugal and stable rather than take a risk that could cost them what little they had if it were to fail. If one thing was obvious it's that these people were not particularly curious as to changing the status quo, or how things were in the past.
But I also felt in many ways this incuriosity was also true for Stevenson himself, as the Guardian put it, he evangelises the wealth tax, implying that before Margaret Thatcher it was something Parties had a consensus on using as a method of helping the working class; but we never had a direct Wealth Tax during this period - though, one was proposed by Labour in 1974, but never implemented. He even goes as far as to talk about how other taxes were different in "the 30s after World War II" to account for this extra social spending, such as the top rate of income tax being over 90% and inheritance tax sitting around 80%. I think it's pretty hard to argue Stevenson isn't misleading the audience somewhat, and it doesn't reflect well on him for doing so.
Of course there is the counterargument I've seen some make that despite it's many flaws the documentary draws attention to the deep inequality in society. But to be honest, I think this is a weak argument; you don't need to tell people experiencing a cost-of-living crisis that they're unequal because they already know it, and the arguments of the documentary often look so poor when challenged that I think if you were using it to convince someone wealth inequality was the problem, it'd probably have the opposite effect.
What was telling for me was the scene with the Patriotic Millionaires, a group which Stevenson is a member of. This is a single-issue campaign group of millionaires (shocker) who want a Wealth Tax of 2% on wealth above £10 million. Watching this scene I made me realise quite how hollow this whole Wealth Tax thing is, fundamentally these people are hoping that if they pay a bit more in tax, they can keep their lifestyles and not have to deal with a bigger structural change that could dislodge it. It reminded me oddly of a Disraeli quote "The palace is not safe when the cottage is unhappy." and I think that comes to the crux of some of my issues with one, beyond the logistics.
At it's core the Wealth Tax is Paternalistic Conservatism, and I think that speaks to why 3/4 of millionaires are actually okay with it. This is not something that developed up from the grassroots like the Co-Operative movement, presenting a genuine alternate vision for an ethical economy, it is a plaster intended to stem the bleeding of a failed economic system, while keeping the people it benefitted in places of power. Perhaps ironically, use of power is the documentary's greatest success, it has drawn attention to Gary Stevenson and probably made him some money by directing people to his YouTube channel, giving him more influence in these discussions, for better or worse.
If you think I'm not being fair to Stevenson, then I think you should look at his maths. In the documentary he says that this Wealth Tax could raise £24 billion a year and that this could fund the NHS, but notably fails to put that figure in context; even if every single pound raised went into the NHS it would only be a 8.8% increase to what is already £294 billion worth of health spending, only slightly more than the 7.7% increase between 2024 and 2025, and if this were to be dispersed more equally across the budget for housing too or cut lower tax brackets as he suggests, it'd probably be less. It is hardly a revolution of aid for working people.
For me the documentary reached it's thematic conclusion during the interview with Dan Neidle, who is a tax lawyer with a pretty strong reputation as a bipartisan. The report by the Wealth Tax commission that Stevenson shows Neidle to back up his points is not supportive of an annual Wealth Tax and Neidle calls this out, explaining that setting one up would take at least a year of preparing systems that could monitor the wealth of about 20,000 people would be unlikely to even raise revenue until 2029 and likely reduce foreign investment. When pushed on other solutions to poverty Neidle is clear that a Land Value Tax is the potential solution, something Stevenson calls "a simple and obvious change" without really rebuking, having to use a section afterwards to explain that it wouldn't solve anything because many of the richest wouldn't pay it, which would only be true if over half of the land of Britain wasn't owned by 1% of the population, particularly ironic given the Neidle interview comes after Stevenson spoke to an inheritor of 3000 acres in Devon, and almost perfectly summing up every problem with the documentary I have brought up.
I mentioned earlier that Labour proposed the idea of a direct Wealth Tax in both their February and October 1974 Manifestos, what I withheld was why it failed; part of the issue was that the proposal itself was developed as part of a compromise to get the Trade Unions to accept even minor deflationary measures - the failure of which no doubt contributed to Thatcher adopting policies that we still feel the negative consequences of today - but what was quickly found by the Civil Service was that such a tax would severely affect investor confidence in Britain (something Neidle mentions) and cause capital flight from important institutions, such as banks, outside of the country, with a Capital Transfer Tax in order to stem cases of tax avoidance being seen as a better solution to the problem of inequality. In 1989 Denis Healey, the Chancellor at the time, would reflect on the 1974 proposal:
"Another lesson was that you should never commit yourself in Opposition to new taxes unless you have a very good idea how they will operate in practice. We had committed ourselves to a Wealth Tax: but in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle."
In rewatching the documentary to write this I found so many points that were either misrepresentations or simply incorrect that I have decided not to include them all. (Norway being a successful example of a Wealth Tax is a particularly bad one) If this documentary should be responsible for anything, it should be for killing the direct Wealth Tax as a serious idea in progressive circles.
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