Global Household Weath now $450 trillion. A 1% annual tax would raise $4.5 trillion

 Thanks again to UBS for providing its 15th annual Global Wealth Report which you can download here.

The bottom line is simple. They calculated the networth of the world's 3.765 billion adults and found a total net worth of very nearly $450 trillion. The key figure is their pyramid of wealth figure shown here.

I've extracted the numbers in the following table that provides the total wealth value. 

 

 

As some of you will know, I have been pushing the simple idea that we could fix many of the world's greatest challenges by imposing a global annual tax on all net worth, whether held by individuals, companies or governments. 

 

The UBS data is invaluable because we can immediately see that a 1% tax would provide no less than $4.5 trillion in funds that could be used to cover the costs of dealing with a wide range of challenges. We are told that we need to find $5.5 trillion a year to fix climate change. That would nearly be covered by the 1% tax.  You would like to provide a $100 a month for every adult on the planet as a global basic income? It would be paid for almost exactly by the 1% tax. You have just ended poverty at a stroke. Actually, that $100 a month to people in the developing world might end up being used to help them fight climate change, so the two actions would go together. 

Would the people who own the assets object to having to fork out 1% of their wealth every year object? Maybe. But given that the value of their assets is increasing by around 4.5% a year, this means that they would still get to keep the other 3.5% increase in value. 

 

Remember that net wealth varies enormously with age. Most adults between 20 and 30 have very little net wealth, and so very naturally, such a tax would be paid by relatively elderly people - the ones who have often already paid off their mortgages. That seems very much fairer than making everyone pay VAT and Income tax, irrespective of whether they are wealthy or not.

The UBS report contains many other interesting details. For example, here is a figure showing which countries are in the top 25 for average wealth.

This provides a clear message for the newly elected governments in both the UK and France where I recently voted. There is a huge amount of net wealth in both countries. Multiply the average net wealth for all the adults in the UK (53.6 million), and you get something like $18.9 trillion - around £14.8 trillion.

If you do the same thing with the 54.6 million adults in France, and you get $17.96 trillion - around €16.53 trillion. 

 

So, message to Kier Starmer:  Impose a 1% tax on the net wealth of all UK adults and you would raise a very useful £148 billion a year - which relative to the £1095 billion in total receipts that the government raised in 2023 would be very useful. 

And message to whoever will be leading the next French government: Impose a 1% annual tax on net wealth for all French adults, and you could raise €165 billion in revenue, which is a substantial proportion of the €1222 billion currently raised. 

 

I must say that I think that this sort of taxation would be a good way to get rid of much of the existing tax mechanisms - based on taxing income or spending (via VAT).  France has an Impot sur la Fortune Immobilier (IFI)  - which uses a sliding scale that ranges from 0% to 1.5% using this table that you can find here.

France used to have a Wealth tax that used to apply not only to Property, but also to Financial assets. But one of the first things Emmanuel Macron did when he came to power in 2017 was to scrap it. His very wealthy friends were no doubt absolutely delighted. 

 

Given the very clear thumbs down sent to Emmanuel Macron in the recent elections, it seems to me that a very obvious thing to do would be to reimpose the Net Wealth Tax on all assets - both financial and property. But please, can we avoid having the variable rates? Just have a fixed rate of 1% for all net assets. Much simpler. And it would make life so much easier for everyone because it would be much harder to avoid the tax by shifting assets from one place to another. 

 

Of course, people will complain that wealthy French people would move their financial assets somewhere else to avoid paying taxes. But the solution to that one is hopefully simple. The 1% net wealth tax should be paid wherever you hide your wealth.

 

My suggestion would be that countries like France and the UK should introduce the 1% net wealth tax locally to demonstrate that it can be done. And then, when the United Nations decides that it would make sense to use the same idea everywhere, the French and UK governments could simply double the amount to pay both the global tax requirement, and also fund local actions.