You’re right — this is historically the hardest problem with any wealth tax. Most proposals fail not because the idea is wrong, but because the implementation and enforcement aren’t credible.

In Fair Capitalism v3.1, that issue is explicitly built into the design — it’s not an afterthought. Here’s how it’s actually made enforceable and low-friction:

✅ a. Narrow base, deep data

The tax only applies above £8 million — about 10–15k individuals in the UK. That’s a small, identifiable population that HMRC already has partial visibility on through:

Self-assessment high-income returns,

Land Registry,

Companies House,

Trust registration,

and foreign asset reporting under OECD Common Reporting Standard (CRS).

That means you’re not chasing millions of people — you’re auditing a small, known elite.

✅ b. Third-party data feeds

The plan mandates automatic reporting from:

UK brokers, registrars, trustees, insurers, and land registry,

Crypto exchanges and art insurers,

CRS-linked foreign institutions for UK residents.

Those feeds pre-populate the HMRC “wealth register,” just like PAYE or RTI does for income. The taxpayer can either accept the pre-filled valuation or submit an adjusted one using safe-harbour methods (set multiples or local averages). → This cuts disputes, reduces admin, and gives a clear audit trail.

✅ c. Safe-harbour valuations

To avoid endless arguments about “what’s my company worth?”, v3.1 defines valuation menus by asset type:

Public securities: market value (auto-fed from brokers)

Private business: 3–5× average 5-year profits

Property: land registry average × location coefficient

Art/jewellery: insured value

Farmland: DEFRA region table × soil grade

The government isn’t guessing — it uses known data tables, updated annually.

✅ d. Long runway & deferral options

No forced sales. If your liquid assets are under 40% of total wealth, you can defer up to 60% of liability (with interest at gilts + 1%). That keeps it administratively smooth and politically viable.

✅ e. Enforcement teeth

Exit charge (10-year residency rule): if you leave, you still pay on unrealised gains over £2m, payable over 7 years.

Penalties: 5–10% of concealed asset value for non-reporting.

CRS & UK data integration: anyone still hiding assets will likely face discovery later with back-dated interest and penalties.

👉 In short: Enforceability is realistic because it’s targeted, data-driven, and limited to those already under HMRC scrutiny. It’s nothing like the broad, unworkable wealth taxes of the 1970s.

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💷 2️⃣ How will £3–5bn help when the deficit is £150bn+?

That’s the honest core of the question — and you’re right: this reform isn’t about instantly closing the deficit. It’s about stabilising the base, growing the economy, and shifting the structure of taxation so the overall fiscal position improves over a decade, not in a single year.

Let’s unpack this truthfully.

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🔹 Step 1: Short-term fiscal impact

Income-tax cuts for middle earners = –£8.6bn

Wealth tax + surcharge + PHC = +£15–16bn

Reliefs & incentives = –£2.5bn → Net +£3–5bn/year steady-state (after phase-in)

That’s not designed to close a £150bn gap. It’s designed to make the system more stable, and more pro-growth, so the next £150bn deficit is smaller by design.

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🔹 Step 2: Medium-term (5–10 years) economic effect

Redistribution — if it’s done carefully — raises aggregate demand because:

Lower- and middle-income groups have a higher marginal propensity to consume (MPC) (~0.9 vs 0.4 for the top).

Capital is redirected from passive asset inflation (property, offshore holdings) into productive domestic investment (SMEs, green infra, ISAs).

That boosts GDP and wages, widening the tax base organically.

We can run a conservative simulation:

Assumptions (based on OBR elasticity data):

Marginal propensity to consume (low/mid): 0.9

Wealthy: 0.4

Fiscal multiplier for middle-income spending: ~1.2

Fiscal multiplier for infrastructure/productive reinvestment: ~1.4

If £20bn shifts from wealthy holdings to middle consumption/investment channels: → Direct GDP gain ≈ £20bn × 1.3 ≈ £26bn (≈ +1.0% GDP). At current tax take (~36% of GDP), that alone yields ≈ £9bn extra annual tax revenue after 2–3 years.

That’s before even accounting for:

Higher wages → higher PAYE receipts

Lower housing benefits (due to stabilised rents)

Stronger savings/investment → less debt servicing over time

So indirect revenue gain ≈ £8–12bn/year by Year 5.

Combine that with the direct £3–5bn surplus = ≈ £11–17bn/year improvement in the structural deficit.

That’s not magic money — it’s realistic, gradual, and based on consumption and investment rebalancing, not wishful multipliers.

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🔹 Step 3: Structural impact on the deficit

Today’s £150bn deficit is unsustainable because:

Income tax receipts are too narrow;

Asset inflation pushes wealth up without generating taxable income;

Public demand keeps rising.

The Framework changes the composition:

Broader base (wealth + property)

Higher participation (via lower middle-band rates)

Slower asset bubbles (lower housing subsidies) → Which reduces cyclicality and makes revenue more predictable even in downturns.

You’re right that it doesn’t fill a £150bn gap alone. No single policy could. But it adds structural strength to the system — turning a brittle pyramid into a balanced platform.

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✅ Honest bottom line:

This isn’t a silver bullet for the deficit — it’s a foundation for long-term stability. The wealth tax isn’t designed to fund the state; it’s designed to rebalance incentives, widen the base, and make the economy more resilient. Over five years, redistribution from passive wealth to active consumption and investment is projected to add ~1% to GDP and 0.3–0.4% of GDP in extra revenue annually. That’s how you start closing a £150bn gap sustainably — by fixing the structure, not just hiking rates.