The Garrulous Jay – Patronising Millionares UK

Last week an open letter to new Prime Minister, Andy Burnham, from a group called Patriotic Millionaires UK made the headlines. Its message was simple: “tax us more”.

The letter could not be clearer: “We want you to tax us. We can afford it”.

As a headline-grabber it’s a pretty good letter, and it also provides potentially convenient cover for the introduction of a wealth tax in John Healey’s first Budget. But the details contain spurious data, unfounded assumptions and some pretty patronising language.

Take, for example, the statement, “We’re not talking about higher taxes on those who get up and go to work for their income every day, but on the very richest whose income is derived from the wealth they hold.”

It’s hard to know where to start with this… Would it be the idea that those who have made significant wealth stop working? Or are they suggesting that above a certain level of wealth the rich no longer get paid for the work they do?

Then there’s the reference to putting to work, “the extreme wealth sitting idle in the hands of a few”. All of this is unquantified in the letter. And where do they think this wealth is “sitting”? If it’s in a bank it’s being lent to businesses and borrowers. If it’s invested it may also be supporting businesses in the UK.

The final assertion is that “there are a few people left with outdated economic thinking and few others desperate to hold onto every penny they can. But they are a minority”.

If it’s the “few” that we’re focusing on let’s take a look at the survey on which many of these statements are based. This had a sample size of 501 individuals…in total. Estimates vary for the number of households in the UK with net wealth (excluding the home) over £1 million, but the ONS figure is 3.9 to 4.0 million.

Apparently, the 0.01% sample size is justified by “the small section of society that has been targeted”. And the letter itself had a total of 120 signatories. So that’s 120 people claiming to represent roughly 4 million households, based on a survey of 501 respondents.

But what is even more perplexing is that these tax-us-more advocates don’t even match up with the survey respondents or those they seek to see taxed.

The survey included just 67 respondents with wealth over £10 million: those that Patriotic Millionaires UK say should pay a 2% wealth tax on assets above this threshold. Again just 0.2% of the estimated 32,000 households in this group, and 13% of survey respondents.

I have one observation and one recommendation based on this letter.

The observation: it is already possible to voluntarily pay more ‘tax’ through either the HM Treasury Voluntary Payments Process, or the National Debt Relief Movement if you’d prefer to reduce the National Debt… What are you waiting for folks?

The recommendation: call their bluff, Mr Burnham. Say you’re considering a 10% wealth tax on assets above £5 million and see how many of the signatories are still “proud to pay”. On second thoughts…