Does the Financial Crisis Create Opportunities for Taxing Wealth? A Study of Tax Policy Debates in the United Kingdom

Abstract

Taxing wealth is an important part of tax policy debates today. The prospect though for taxing wealth seems to be bleak. But does the financial crisis create opportunities for taxing wealth? The financial crisis might change debates by acting as a shock to the tax policy process and boost political arguments for taxing wealth. This article explores whether the financial crisis has such an impact by looking at tax policy debates in the United Kingdom. The article looks at examples of three main ways of taxing wealth, namely, proposals for an inheritance tax, mansion tax and capital gains tax. This article argues that the financial crisis has an impact on political debates but that its impact is uneven. The financial crisis provides a greater boost for a mansion tax idea over inheritance tax or capital gains tax. However, political arguments for taxing wealth are refracted by other factors such as lobbying by vested interests.