Why this global wealth tax plan won’t work

The Global Justice Report from the World Inequality Database promises a great deal: climate stability, global income security, and justice through global wealth taxation. It suggests that the world could dramatically reduce inequality, raise living standards, and remain within environmental limits, all through a coordinated system of global taxes on wealth and income. That sounds attractive. It sounds ambitious. It sounds hopeful. But there is a major problem. The proposal assumes away the practical, political, legal and administrative obstacles that make its plan unworkable. In this video, I explain why a global annual wealth tax is not a realistic route to tax justice. The report assumes unprecedented worldwide cooperation between governments that often cannot agree on far simpler issues. It ignores the continuing existence of tax havens, overlooks the realities of tax competition, and pays little attention to the political power that wealth already exercises over many governments and institutions. The proposal also assumes that wealth can be easily identified, valued and taxed. In reality, wealth is often hidden behind trusts, companies and complex ownership structures that stretch across multiple jurisdictions. Even when wealth can be identified, establishing a fair value for it is frequently difficult, contentious and expensive. The report ignores these practical challenges. Most importantly, it fails to deal with the most basic issue of all: wealth is not the same as cash. Owning an asset does not necessarily provide the income needed to pay a tax charge based upon that asset’s value. Homes, private businesses, works of art and many other forms of wealth may have significant paper values while generating little or no cash flow. That creates a fundamental problem that the report does not adequately address. Tax justice matters. Wealth inequality matters. The power of the wealthy matters. But reform has to be deliverable. A tax that cannot be assessed, collected or paid is not a solution. It is make-believe economics. In this video, I explain why the Global Justice Report misunderstands the realities of taxation, valuation and wealth ownership, why its proposed wealth tax would struggle to work in practice, and why there are more realistic ways to increase tax revenues from those with the greatest ability to pay. If we want genuine tax justice, we need proposals that confront reality, not ones that assume inconvenient facts away. Take a look at the poll below:    • Post   TRANSCRIPT A transcript for this video is available at: https://www.taxresearch.org.uk IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. https://www.taxresearch.org.uk/Blog/2... HOW TO SUPPORT US Please consider donating: https://ko-fi.com/taxresearch ABOUT RICHARD MURPHY Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’. This video was edited by Thomas Murphy. RICHARD MURPHY ON BLUESKY: https://bsky.app/profile/richardjmurp... OR ON MY BLOG: http://www.taxresearch.org.uk/Blog/ HIT SUBSCRIBE & GET NOTIFICATIONS Subscribe and get notified of new videos released. INTRODUCTION:    • Welcome to my channel - Richard J Murphy -...   PLAYLISTS: The Wealth Series    • The Wealth Series   Ecenomics    • Ecenomics   Britain    • Britain   Tax    • Tax   MMT    • MMT   Money    • Money   Climate Change    • Climate Change   USA    • America and Trump   Labour    • Playlist   The Trump Administration    • Playlist   #economy labour #health #life #WealthTax #GlobalJustice #Inequality #TaxJustice #ThomasPiketty #GabrielZucman #WorldInequalityDatabase #WealthInequality #TaxPolicy #PoliticalEconomy #MMT #ModernMonetaryTheory #TaxHavens #GlobalTax #EconomicJustice #WealthConcentration #TaxReform #CapitalGainsTax #InheritanceTax #IncomeTax #PublicFinance #EconomicAnalysis #GlobalInequality #RichardMurphy #FundingTheFuture