Andy Burnham and the Wealth Tax Experiment
On 28 July 2026 the esteemed organ of the British state, The Times, ran an article written by Money Reporter Alice Wright entitled ‘The failed wealth tax experiment that’s a warning to Andy Burnham’. The article sounded a stark warning to the recently anointed First Lord of the Treasury as he comes under pressure from the petty bourgeois left and the trade union bureaucracy to introduce a ‘Wealth Tax’ on households with more than £100m in wealth.
On 21 July 2026, the day after Burnham’s appointment, The Guardian published an article by Philip Inman, ‘Wealth tax on UK’s super-rich could raise £10bn a year, Andy Burnham told, which stated that a study conducted by Professor Gabriel Zucman of the Paris School of Economics and Ben Tippet, a lecturer in economics at King’s College London had revealed that the government could raise £10bn a year by levying a minimum 2% tax on the 1,000 richest households in the country.
A brief glance at the recent articles that Professor Zucman, who is also a professor of economics at the University of California, Berkeley, has either written or co-written for The Guardian reveals a pattern in that he consistently writes on the topic of taxation as a means to bridle the richest (and therefore most powerful) people in bourgeois society. Zucman has also consistently advocated for his idea of a 2% annual wealth tax, which should be applied not only in Britain but in a coordinated manner across the world.
Burnham himself has, at the time of writing, not yet openly stated that he intends to implement any sort of wealth tax, but did say in a recent interview with former footballer Gary Lineker, cited in The Guardian’s article, that “I do believe we need a greater sense of fairness and people feeling things are being done in the right way, but at the same time I don’t want to be perceived as someone who is coming in with grudges and agendas and demonise one group” [Especially not the billionaire elite!].
Popular millionaire YouTuber Gary Stevenson of Gary’s Economics, also considers an increase in taxation of the super wealthy to be the panacea for all the ills of capitalism. But while the relations of production are left untouched with the capitalists in control of the means of production and the chief levers of production, wealth will continue to flow from the poor to the rich irrespective of the taxation policy.
If Burnham was minded to introduce a wealth tax, then it could be legitimately argued that right now is as opportune a time as any to do so. His coronation as Prime Minister, replacing the hapless technocrat Keir Starmer, has managed to diffuse much of the recent anti-Labour sentiment that had built up a considerable head of steam in the period beginning almost immediately after the 2024 General Election. The once palpable sense of anger and indignation at the Labour government has largely dissipated (at least for now) and Burnham appears to have much greater latitude to implement ‘bolder’ policies than his predecessor.
Burnham has also done at least some groundwork on a possible increase in taxes on the wealthiest in society, despite a lack of any open statement to that effect. In a speech that he gave on 29 July 2026, Burnham warned that the National Health Service will ‘collapse’ unless England’s adult social care system is overhauled. He went on to say that the NHS will fail under the weight of an aging population if the frontline care system is not overhauled. Burnham also criticised England’s current social care system, which requires the most vulnerable people are forced to exhaust their life savings to pay for dementia and other long-term care. Burnham even likened the situation in England to the parasitic, profit-driven American healthcare industry. All such talk is usually a prelude to offering the cure: the hair of the privatisation dog that bit you.
Burnham has invited leaders of the Liberal Democrats and the Conservative parties to cross-party discussions on establishing common ground on social care reform, which would have assured the petty-bourgeois left and the trade union bureaucracy that he was sincere in his intentions. However, successive governments going all the way back to 1997 have repeatedly promised to save the National Health Service by reforming social care.
The Labour government of 1997-2010 promised action on long-term care, including in 2009 when Andy Burnham, the then Health Secretary, proposed a National Care Service but was forced to shelve large parts of these plans when opponents labelled them as a ‘death tax’ because it included the levy of a 10% tax on estates after death, justified by the government as spreading the considerable cost of care.
Since then, governments of all stripes have publicly proclaimed that they will fix the social care system once and for all, only to have to curtail, water down or jettison their plans completely in subsequent years.
In the case of Andy Burnham in 2026, a pivot on the tax system in England would inevitably be welcomed by the trade union bureaucracy and the petty-bourgeois left; it would, much like the repeated and empty promises by governments, going back thirty years, to reform social care, be ‘puffing’ – sales talk rather than a genuine promise which anyone with an ounce of common sense should dismiss, while at the same time Burnham would plough on with increasing military spending and continue to wage war in countries including Iran and Ukraine and anywhere else that the British ruling class deems to be putting a barrier between them and an orgy of unbridled looting.
However, if we were to assume for a moment that Burnham was sincere in his desire to reform the social care system and was indeed prepared to tax the top 1% in England in order to pay for it, could it really be done?
The Times recently warned of the folly of any taxation on wealth, giving the example of Scotland and its recent changes to tax on higher earners. According to an analysis undertaken by independent think-tank Tax Policy Associates, the Scottish government’s increase in the highest rate of income tax – a 48% rate introduced in April 2024 – could have cost Scotland £22m in lost tax revenue in its first year.
The rise in the upper rate of income tax in Scotland, levied against earnings of over £125,140 per year, has been implemented incrementally since 2018, when it was raised from 45% to 46%. In 2023 it was raised again to 47% and then raised again to 48% in 2024. At the same time, the Scottish government also introduced a 45% tax rate on earnings between £75,000 and £125,140, while the remainder of the Britain’s earners in this bracket were taxed at a rate of 40%. This meant that in Scotland there are six tax bands, while in the remainder of Britain, there are only four.
Yet the Scottish Fiscal Commission, in its tax policy evaluation report for the 2018-19 tax year, stated that the rise in the top rate of income tax from 45% to 46% “raised limited additional revenues, and might even have resulted in a small loss of receipts”. The Institute of Chartered Accountants of Scotland has said that Scotland’s “competitiveness, investment appeal and long-term tax base” could be under threat from its tax policies when set against those in the rest of Britain.
The question which inevitably presents itself is: Why?
Tax and Tax Avoidance
Arthur Laffer, the economist who came to prominence as a member of the Economic Policy Advisory Board under US President Ronald Reagan, theorised what became known as the ‘Laffer Curve’ – that once taxes reach a certain level, they bring in less revenue as people become ever more motivated to avoid paying them. Professor Zucman, who was mentioned earlier, has also repeatedly stated that the more wealthy a person becomes, the more opportunities they have to avoid paying tax on their income and/or assets.
It is therefore an inevitable conclusion that, when we apply the theories of Laffer and Zucman simultaneously, Scotland’s ‘progressive’ tax policies have in fact motivated people to find ways to avoid paying tax and that they have the means, the motive and the opportunities to do so. But what methods do the highest earners have to lessen their tax burden?
The first and most obvious way to reduce one’s tax footprint is to exploit schemes which offer tax relief; in effect any payment for such a scheme is deducted from earnings before income tax, meaning that the tax is deducted based on less earnings. The most obvious method is for a high earner to increase contributions to their pension scheme – known as Voluntary Additional Contributions (or AVCs), which legally allow up to £60,000 per year in earnings to go ‘untaxed’ if they are added to the pension pot.
Another growing method for reducing one’s tax burden is through ‘Salary Sacrifice’ schemes. One example of such a scheme is for employees to lease an electric car through their employer by handing over a portion of their earnings to pay for the vehicle which, like the AVC scheme outlined above, deducts the monthly payment before income tax is levied, which means that the tax is calculated on less earnings. The list of employers which offer this service is extensive and includes Royal Mail, the NHS, Transport for London and the Civil Service.
In the case of high earners in Scotland who own additional properties, the government’s introduction of legislation which allowed councils to charge second-home owners unlimited council tax was met with those second homes being registered as holiday lets, which meant that they were not liable for council tax and instead were levied business rates, which are far lower. By turning second homes into small businesses, owners can also claim tax relief on renovations and repairs to the home.
There is also scope for the richest in society to avoid tax through purchasing land and holding it in a limited company, which means that any income generated from the land (for instance in rent) is liable for Corporation Tax rather than personal income tax. Buying and renting out land is also exempt from Value Added Tax (VAT)
In simple terms, when any bourgeois government implements taxes on higher earners, those higher earners have a ready-made and government-backed loophole to slip through.
The nature of the bourgeois state
There is strong evidence which suggests that legislation designed to restrict increases in rents or council tax rises has the opposite effect – in Scotland, controls were implemented which capped rent increases to 3%. The effect of this was that more landlords increased the rents that they were charging than their counterparts in the rest of Britain: 67% of Scottish landlords raised rents compared to 58% across the remainder of the country.
Meanwhile, the government’s decision in 2017 (and again in 2023) to cap council tax rises at 5%, except in cases where the council was given special dispensation, has meant that in 2026 the average Council Tax rise for Band D homes was 4.9%. Under capitalism, setting higher tax bands, maximum rent rises, council tax rises or minimum wages inevitably leads to taxes being avoided, rents and council taxes rising at the capped rate and pay driven towards the legal minimum.
Whilst on its face a policy of taxing the highest earners in society at a higher rate than the remaining cohort of taxpayers appears laudable, there is strong evidence to suggest that state intervention, particularly in the fields of taxation and rent control, can motivate those affected to seek legal loopholes and schemes which offset at least some, if not all, of the additional burden created by such legislation.
In bourgeois society, the state presents itself as the first and last resort when the working class demands that the excesses of the richest and most powerful be curtailed. Yet the evidence from Scotland demonstrates the contradiction at the heart of this approach: while the headlines proclaim the virtue of taxes levied on the highest earners, the state simultaneously provides those same people with exit doors, out of sight of the working class and ignored by the mainstream media, through which they can escape the burden being imposed upon them. The British ruling class and its agents of government have been wrestling with this contradiction for decades and there is no sign that they will be able to reconcile it any time soon.
Besides all this, the fact remains that the biggest tax evaders are not the wealthy individuals but the multinational corporations who transfer profits made in Britain to tax havens abroad where little or no tax is payable. The result is that in Britain, Value Added Tax (VAT) – that weighs heavily on the poorest in the country – accounts for roughly 15% to 17% of total public sector receipts (raising about £180 billion). In contrast, corporation tax contributes around 8% (about £96 billion) and council tax contributes around 4% (about £51 billion), bringing their combined share to roughly 12%. Thus, VAT alone raises more revenue than corporation tax and council tax combined (see Institute of Fiscal Studies, ‘Where does the government get its money’, 8 August 2023). In other words, the world’s financial oligarchy is helping itself to such a huge proportion of the wealth generated from exploiting working people, that it leaves the latter bereft of the necessities of life. Even if the wealthiest earners paid higher taxes rather than resorting to tax avoidance strategies, the amounts raised would be insignificant by comparison with the depredations of finance capital.
Only a workers’ state will be equipped to give to workers rather than to voracious parasitic financiers the benefits they have earned and deserve, not only in their working lives, but in times of infirmity and old age.
Expropriation not taxation is the only solution for the working class in its struggle against capitalist exploitation.