This blog was published first on Social Europe. A European wealth tax could be a ‘win-win’ strategy for reducing extreme wealth inequality and funding the recovery from the pandemic. Covid-19 has swept through Europe with a devastating socio-economic effect leaving many member states struggling to recuperate. Moreover, major social challenges of recent decades—such as the… Continue reading A European wealth tax
Property taxes in the UK
For a while I wondered why the UK is the OECD country which generates the highest share of tax revenue from property taxes. The graphic below is from the OECD’s 2018 report The Role and Design of Net Wealth Taxes in the OECD (which by the way is very worth the read).
I used to interpret statistics like that as a proxy for the progressiveness of a country’s tax system since property holding is heavily concentrated in the right tail of the distribution. A closer look (and having a better understanding of the UK tax system after moving here) reveals however that the largest contributor in the case of the UK are “recurrent taxes on immovable property” and that is nothing else than Council Tax, which is paid not by the owners of the property but whoever occupies or rents it. That means simply using “taxes on property” as in the SNA/OECD classification as an indicator of how progressive a country’s tax system is, can be quite misleading.