Most people would choose greater equality over greater wealth for the UK – but ultra progressive taxation is opposed
A new book by French economist Thomas Piketty on inequality and wealth, Capital in the 21st Century, has received huge attention on both sides of the Atlantic and is claimed by some to have “transformed our economic discourse”. Mr Piketty is speaking in London today.
A new YouGov survey finds that the ‘Inequality Moment’ may indeed have reached Britain, as 56% would like to see a more equal distribution, even if it reduces the total amount of wealth, and only 17% would choose greater overall wealth even if it leads to greater inequality.
Conservatives are the only demographic who do not favour equality by a majority, but even then they are almost split (33% equality, 39% wealth).
This is in marked contrast to a parallel study carried out by YouGov America, which revealed that in that country only 39% prioritise equality, while 31% prefer more wealth. In the US, unlike in Britain, older people are considerably more likely to opt for greater wealth.
According to Mr Piketty, while economic growth is set to slow, the return on capital is not. Capital, and its inheritance, is becoming more profitable than income, and this is leading to growing inequalities.
No stomach for 80% tax on super rich
The only way of curtailing the growing gap, according to Thomas Piketty, is for much higher income taxes on the very rich together with global taxes on their assets and higher inheritance taxes. We tested these policies and found that, despite the desire for greater equality, the measures are not at all as popular.
While a super rate of 60% income tax on incomes over £120,000 is supported by 45-35%, the higher proposal of 80% for incomes over £300,000 a year, is opposed by 44-38%.
Meanwhile, only 20% want to see the current 40% inheritance tax on estates worth £325,000 or more increased. 38% say it should actually be reduced and 28% think it should be kept about the same.
And people are divided on a progressive global asset tax on the total wealth people own (rather than just their overall income) of up to 10% for those worth up to 10 million Euro. 34% support and 36% oppose, while 30% don’t know. This is even the case in the imaginary scenario that every country in the world agreed to do the same.
In the mid 20th century the UK had income taxes of up to and beyond 90%, and inequality was temporarily low. But to Piketty this was a blip produced by the need for war, by the power of organised labour and technological innovation. Now labour is too weak, technological innovation is too slow and the power of capital is too great for the Keynesian era to return, he suggests.