This is a remarkably odd idea

So remark upon it we shall:

That would mean this tiny group hold untaxed assets equivalent to the total wealth of the poorest half of the global population.

Well, yes, as we know from the Saez and Zucman research, the bottom 50% of any wealth distribution will own very little of the total. A major reason for this being lifecycle effects. Wealth tends to concentrate in that portion of the population that has been saving for a pension, paying off the mortgage, for 40 years already. The young, those just starting out on that decades long road to financial independence, tend to have nothing. Or, in richer countries where an efficient financial system allows borrowing, debts not wealth. In such countries the bottom 20 to 30% will, collectively, own nothing at all. Just how it works out.

But it’s this which is so odd:

The global super-rich may have as much as $3.55tn hidden away from tax authorities, according to estimates by Oxfam.

The charity renewed its call for a wealth levy and urged governments to close tax loopholes as it published its latest analysis of the scale of offshore holdings.

So these very naughty people are driven by the current impositions upon their wealth to squirrel it away out of reach of being imposed upon. The solution to this is to increase the levels of impositions and thus reduce the amount of squirreling? Or is it that because some is squirreled therefore those who have not squirreled must be forced to pay more? Either way we cannot see that those are logical conclusions to the initial claim. We’d actually suggest that those are illogical.

Our actual view here is that $3.5 trillion is a tiny, tiny, fraction of the many hundrends of trillions of wealth floating around. The damage that will be done to the economy by taxing wealth, generally, more heavily will far outweigh any supposed revenue from this squirreled amount.

There is also the point that the governments of the world currently dispose of some $25 trillion annually. Increasing that by some fraction of a percentage point really isn’t going to achieve all that much now, is it? And that is, politely, to assume that everything already done with the 25 large is itself beneficial.

This is not just an odd idea it’s a bad one.

Tim Worstall