800 billion pounds of private wealth have been ignored by official estimates, says the think tank, in the midst of demands for wealth tax to finance Covid recovery
According to a shocking new report showing a historical underestimation of inequality in the world, nearly a quarter of all household wealth in the UK is owned by the wealthiest 1 percent of the population. The study found that the top 1 percent own nearly 800 billion pounds more wealth than official figures indicate, suggesting inequality is much greater than previously assumed.
The researchers said it was a conservative estimate of the extra billions and may well be more. The revelation comes in the midst of demands for ministers to consider a new wealth tax or major improvements to current levies on the affluent so that they play a greater role in helping the nation cope with the covid fallout and the expense of an aging population.
According to researchers at the Resolution Foundation think tank, about 5 percent of the overall income of the wealthiest households is not captured by official measurements.
By comparing official statistics from the Office for National Statistics with data from the Sunday Times Rich List, the Resolution Foundation think tank discovered the missing wealth and discovered that official data fails to capture the wealth of very rich households. Accounting for the newly discovered billions had a huge effect on the proportion of total wealth owned by the top 1 percent in the UK, increasing by more than a quarter – from 18 percent to 23 percent. Wealth disparity decreased over most of the 20th century, with the proportion of wealth held by the wealthiest 10 percent dropping from more than 90 percent throughout the 1980s to around 50 percent. After the financial crisis, wealth has been generated not by active savings, but by increasing asset prices, such as rising real estate prices, land or stocks.
After the recession, between 76% and 93% of financial wealth increases have come from the increasing valuation of assets such as land. The Chancellor of the Exchequer, Rishi Sunak, recently faced calls to introduce a one-off wealth tax on certain households that could raise up to £ 260 billion for recovery after the crisis. The call came from the Wealth Tax Commission, consisting of leading tax experts and leading tax experts. In response to the pandemic, the group said that targeting such a tax on the richest households would be the fairest and most appropriate way to increase taxes. A report commissioned by the chancellor in November also proposed changing the capital gains tax by lowering the annual allowance. This move would affect rich people with properties such as second homes, sponsored by the independent Office of Tax Simplification. Even before Covid, in fields such as social care, the Treasury faced substantial budget demands. It is estimated that health and social care spending will increase by £ 38 billion a year by 2030. “The Resolution Foundation said that “wealth taxation needs to play a greater role in the economy over the 2020s.” “The Foundation encourages the Chancellor to enact the biggest changes in a century in wealth taxation, including the elimination of capital gains and inheritance tax reliefs (which together raise billions) and the introduction of a 1% council tax surcharge on property worth more than £
But official data has failed to capture these gains, and 800 billion pounds of assets owned by the richest households in the United Kingdom remain missing.