Sir Humphrey might suggest....

With special thanks to the creators of Yes, Minister and Yes, Prime Minster: Antony Jay & Jonathan Lynn and full acknowledgements to BBC TV

For those that can remember the 80s, what if Sir Humphrey Appleby was still at the Treasury and could give the current Prime Minister a briefing on the inevitability of a wealth tax shift while making it sound both prudent and politically irresistible.

Sir Humphrey:

Prime Minister, if I may be permitted to venture a modest observation on the fiscal conundrum presently vexing Her Majesty’s Treasury, it is this: the current system of raising revenue relies disproportionately on taxing income, which — as you will be aware — is something the vast majority of voters would prefer to keep. Conversely, wealth — being more abstract, less visible in its accrual, and, one might add, rather more concentrated in the hands of those with the means to avoid drawing attention to it — represents a hitherto insufficiently tapped reservoir of fiscal opportunity.

Now, I do appreciate that the term “wealth tax” can induce a certain, shall we say, operatic response from the editorial pages of the more excitable press. However, if framed as a “modernisation of the revenue base” or a “realignment of fiscal fairness,” we could sidestep the unhelpful imagery of grasping bureaucrats rifling through the jewel boxes of the landed gentry. Instead, the policy could be presented as a prudent rebalancing: reducing the burden on earned income — the fruit of hard work — while modestly increasing contributions from unearned accumulations, the fruit, if you will, of time and compound interest.

The genius of this approach, Prime Minister, is twofold. First, it allows you to announce a tax cut (on income) — which is universally popular — and second, it enables you to claim the moral high ground by ensuring “those most able to contribute do so commensurately with their means.” Meanwhile, the economically literate will note that this stimulates enterprise and productivity whilst mildly discouraging the unproductive hoarding of idle capital.

Of course, implementation would require the utmost delicacy. The wealthy, though few in number, are long of memory and deep of pocket — both of which can be mobilised against any perceived injustice. Thus, the measure must be accompanied by soothing assurances, ample transitional arrangements, and preferably a respectable international precedent. If, for example, the French, the Canadians, or even the Australians could be persuaded to introduce something similar simultaneously, we could describe the whole exercise as “aligning with global best practice” rather than “plundering the silver.”

In short, Prime Minister, the proposal is simplicity itself: reduce taxes on what people do (earn, work, produce) and increase them slightly on what people merely have. Present it as the forward-looking reform of a modern, fair, and efficient economy, and you will be applauded by the industrious many, whilst the indignant few will, in the fullness of time, adapt — as they always do.

Prime Minister:

Hmm, I like the sound of that, Sir Humphrey, prepare a proposal for the Cabinet immediately