Earlier this month, the University of Strathclyde and Tax Justice UK published a new study Politicians’ Perspectives on Wealth Taxation and the Barriers to Reform in the UK - exploring politicians’ views on wealth taxation and the barriers to reform in the UK. In particular, we were looking at attitudes towards Capital Gains Tax reform, applying NICs to investment income, an annual wealth tax and Council Tax reform. 

In recent years support for wealth taxation has grown, from the public, including UK millionaires and Reform curious Labour voters, and every Budget there are calls for ambitious tax reform from across the political spectrum. Yet these rarely materialise and public support has not translated into policy change. We wanted to find out why a Labour government was struggling to implement a progressive tax agenda. 

We interviewed 30 MPs, MSPs and a Member of the Senedd, across all main political parties in the Spring and early Summer of this year, to hear perspectives on wealth taxation, the barriers to reform, political dynamics and public attitudes surrounding wealth taxation, as well as the likelihood of and potential conditions for overcoming these barriers. 

We identified six key interconnected barriers to reform: 

1. Big money lobbying & elite influence: Many politicians pointed to the influence wealthy individuals, major businesses and financial interests can exert over political decision-making. Lobbying, privileged access and warnings about investment leaving the country were all seen as factors shaping the debate around wealth taxation.
2. Party politics & democratic institutions: Politicians, particularly in the Labour party,  told us that backing policies outside the leadership's priorities can carry political costs as well as wider institutional barriers, including short electoral cycles and political polarisation making ambitious reform difficult.
3. Public opinion and the press: Many worried that the public frequently misunderstand how wealth taxes would work and who they would impact. Participants also pointed to persistent negative media narratives around tax amplified by large parts of the press with a clear agenda. 
4. Uncertainty about economic impacts: Many politicians told us they remain unsure about the economic effects of taxing wealth. Concerns ranged from lower investment and capital flight to doubts about how much money reforms would actually raise. Most people we spoke to were not certain these impacts would occur, but uncertainty was enough to instill political inaction. 
5. Questions around policy design and delivery: Questions around rates, thresholds, valuation and enforcement came up repeatedly, while competing technical approaches made it harder for support to coalesce around any single proposal. 
6. Ideological opposition: Some politicians - mostly those on the political right -  oppose reform of these taxes out of principle or ideological belief, seeing it as a threat to aspiration and economic success. 

So, what can Think Tanks and campaigners for progressive tax reform learn from these findings?

Participants who supported reform identified 4 factors that they felt were needed to make change possible:

1. A stronger evidence base, with empirical evidence, economic modelling and real world examples
2. A more positive, compelling public-facing narrative around taxing wealth, focusing more on what taxing wealth more can do and buy for society, and less on who pays 
3. An incremental, phased approach to reform was seen as  less politically risky
4. A diverse coalition of advocates with aligned asks, including and especially from supportive voices in business and the private sector

Council Tax is an area Radix and many other think tanks have argued is in need of reform, so I shall use this as a case study in what will be needed to deliver reform. 

First, a strong empirical evidence base is essential. Having a phalanx of academic studies and reams of data is insufficient to make the case for reform. The age old “It works in theory, but not in practice” is a powerful argument against change. Many OECD countries use some form of Proportional Property Tax - so a bank of case studies from those countries such as New Zealand and Ireland - showing how it is more progressive, equitable, better for growth and administratively possible is essential.  

Second, a compelling and positive public-facing narrative that accounts for the doubts the public might have and clearly articulates the benefits of reform, not pointing fingers and blame around. It’s not enough just to argue that Council Tax is 30 years out of date, or that multimillion pound homes in Westminster are often paying less than terraced homes in Hartlepool - it needs to be articulated in a way that the public understand and relate to, which delivers tangible benefits, such as lower bills for working people or better public services. 

Third, politicians told us that an incremental, phased approach would be easier than jumping to the end goal all at once. As Tax Policy Associates highlighted when considering a Land Value Tax - vast swathes of London would see their bills rise by tens of thousand, whilst many places in Northern England end up paying virtually nothing at all. Jumping to this at once would be politically and administratively impossible. A more phased approach, with caps on rises and minimum floors as advocated for by Onward, with transitional arrangements over several years would be more deliverable. 

Finally - a diverse coalition of supporters and advocates is needed. The Fairer Share campaign brings together ordinary people, civil society organisations and politicians to campaign for a more proportional property tax, but additional voices are needed too. In particular, wealthy people, business interests and those who stand to pay  more from reform are essential to making a winnable case for change. 

By bringing together these four strands - weight of evidence, a powerful public facing narrative, a practical and deliverable approach and a diverse range of advocates - turning public support into political action to achieve real structural tax reform will become possible. 

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