We are opposed to wealth taxes

Thomas Picketty, in his new book “Capital in the 21st century”, has stimulated public discussion on the need for an international wealth tax to remedy growing inequality. He could not be more mistaken. Although so-called wealth taxes are in operation abroad, the proposal is unworkable since it fails at the first hurdle – that of definition. What is wealth? Does it include pictures on the wall, jewellery in bedside tables or forgotten treasures in the loft? How does one value, for example, a racehorse or a painting, whose provenance may be in question – the Rembrandt that turns out to be by one of his pupils, or vice versa? And if racehorses are exempt from the wealth tax because valuation is considered too difficult, then it does not take too much imagination to predict that millionaires will invest in lots of racehorses in order to enjoy the exemption.

For the record, LVT is not a wealth tax. It is a tax on a revenue stream, its rental value.