#Almost a quarter of all household wealth in the UK is held by the richest 1% of the population, according to an alarming new study which reveals a historic underestimation of inequality in the country.
The study found that the richest 1% had almost £ 800 billion more than official statistics suggest, meaning inequality was much higher than previously thought. The researchers said the extra billions were a conservative estimate and could well be more.
The revelation comes as ministers call for consideration of a new wealth tax or substantial reforms to existing levies on the rich, so they can play a bigger role in helping the country cope with #Covid fallout and costs the aging of the population. #Applications for a tourist tax are also being re-launched.
#About 5% of the total wealth held by the richest households has not been taken into account by official measures, found researchers at the thinktank #Resolution #Foundation. #He discovered the missing wealth by comparing official statistics compiled by the #Bureau of #National #Statistics with data from the #Sunday #Times #Rich #List.
#He found that official data struggled to capture the assets of very wealthy households. #Factoring in the newly discovered billions has a significant impact on the share of the UK’s total wealth held by the richest 1%, increasing it by more than a quarter – from 18% to 23%.
#Inequality of wealth declined for much of the 20th century, with the proportion of wealth held by the top 10% falling from over 90% to around 50% in the 1980s. #However, the #Resolution #Foundation said that ‘it had remained stable or increased slightly over the past decades.
#Wealth has been fueled by rising asset prices since the financial crisis, such as the soaring value of homes, land or stocks, rather than active savings. #Between 76% and 93% of the gains in financial wealth since the crisis have come from the increasing value of assets such as housing.
#Chancellor #Rishi #Sunak has faced recent calls to sanction a one-time wealth tax on certain households in a move that could raise up to £ 260 billion for the post-Covid recovery.
The call came from the #Wealth #Tax #Commission, made up of leading tax experts and economists brought together by the #London #School of #Economics and the #University of #Warwick. The group said targeting such a one-off tax on the wealthiest households would be the fairest and most efficient way to raise taxes in response to the pandemic.
#In #November, a study commissioned by the #Chancellor also recommended reforming the capital gains tax by reducing the annual deduction. The move, supported by the #Independent #Office for #Tax #Simplification, would affect wealthy people with assets such as second homes.
#Even before #Covid, the #Treasury faced significant spending demands in areas such as social protection. #Health and welfare spending is expected to increase by £ 38 billion a year by 2030. The #Resolution #Foundation said wealth taxation “will need to play a bigger role in the economy over the years. 2020 ”.
“The foundation calls on the #Chancellor to embark on the biggest wealth tax reforms for a generation – in particular through the restriction of capital gains and exemptions from inheritance tax (collected several billion), and in adding an additional 1% council tax on properties worth over £ 2million (raising over £ 1bn).
#Jack #Leslie, economist at the foundation, said: “The UK has experienced a wealth boom in recent decades, which has continued even as incomes and incomes stagnate. #But official data has struggled to capture those gains, missing out on £ 800 billion in assets held by #Britain’s wealthiest households.