There is a question that ought always to be asked whenever anyone proposes a new tax. Before we discuss rates, thresholds, exemptions, enforcement mechanisms, or projected revenues, we should ask a simpler question: which existing taxes are to be abolished?

This question is almost never asked. The reason is obvious. Most proposals for tax reform are not really proposals for reform. They are demands for additional revenue. They assume that government ought to spend more money and then concern themselves with where that money can most conveniently be found. The possibility that government may already spend too much is quietly excluded from discussion. The possibility that the state itself may be the problem rather than the solution is treated as eccentric or irresponsible. I reject this approach entirely.

I do not believe Britain suffers from a shortage of taxation. I do not believe the British state is starved of resources. I do not believe there exists some public service that would function perfectly if only taxpayers were forced to surrender another percentage point of their income. Indeed, I am inclined towards the opposite conclusion. The British state now consumes resources on a scale that would have astonished previous generations. It taxes earnings, savings, investments, property, consumption, inheritance, fuel, insurance, and a thousand other activities. Every year brings some new levy, some new surcharge, some new reporting requirement. At the same time, public services become steadily less impressive. Waiting lists grow. Infrastructure decays. Bureaucracies expand. Ministers announce reforms whose chief purpose appears to be the justification of further reforms. The problem is not that government lacks money. The problem is that government has too much of it.

This being said, not all taxes are equally harmful. If government insists on taking a share of national wealth, the manner in which it does so matters greatly. Some taxes discourage productive activity. Some reward unproductive behaviour. Some require an intrusive machinery of surveillance. Others can be collected with comparatively little interference in private life. A sensible discussion therefore concerns not whether taxes should exist but which taxes cause the least damage and which taxes cause the most.

For this reason, I find myself advocating a position that will probably irritate readers across the political spectrum. I would abolish income tax. I would abolish inheritance tax. In their place, I would impose a substantial annual tax on very large fortunes and supplement this with a tax on the rental value of land.

The Left will object because I propose abolishing taxes that have long been treated as sacred. The Right will object because I propose taxing accumulated wealth more heavily than it is taxed at present. Both objections miss the point. My concern is not equality. It is not redistribution. It is not social justice. My concern is the preservation of a prosperous and independent middle class.

Since the Second World War, British politics has been conducted on the assumption that the middle classes exist primarily as a source of revenue. Governments of all parties have discovered that professionals, small businessmen, skilled workers, and entrepreneurs are numerous enough to be taxed heavily and respectable enough to pay without rioting. The result has been predictable. Every year more burdens are piled on those people who generate much of the country’s productive wealth. Meanwhile, those at the very top increasingly escape.

This is a scandal. We are constantly told that we live under capitalism. We are told that free markets have produced grotesque concentrations of wealth. We are told that billionaires are the inevitable result of economic freedom. Yet the same phenomenon appears in countries with radically different economic models. Britain’s 200 wealthiest families now hold wealth equivalent to 20% of GDP, up from 6% in 1994. In France, the 500 most affluent families command 42% of national output today compared with 6% thirty-five years ago. The trend is global. In the near future, possibly before the end of the year, Elon Musk may become the first trillionaire. His fortune already exceeds the GDP of South Africa; with SpaceX’s anticipated IPO, it could climb far higher. At the turn of the millennium, Bill Gates’s wealth stood at around $60 billion — roughly one-tenth of what Musk may soon possess in today’s prices.

This suggests that something larger is occurring than the simple success of a few exceptionally talented entrepreneurs. The very rich, unless constrained by hereditary ownership of land and a sense of honour, are often a parasitic burden. Their wealth comes not from enterprise but from rents gained through the right connections, regulatory privileges, network effects, financial engineering, and decades of asset inflation driven by artificially cheap money. Traditional income tax exacerbates the problem. It falls overwhelmingly on the middle classes — doctors, engineers, solicitors, teachers, accountants, shopkeepers, and business owners — who are prevented from starting and running the small businesses that are the real wealth of a country.

The evil effects of income tax are clear. First, it requires an inquisition to collect. Telling the state how much we earn is as close to slavery as I can imagine without the iron fetters and the auctioneer’s block. The growth of money laundering regulations, beneficial ownership registers, suspicious activity reports, and the push for digital currencies is largely driven by the needs of an overly extractive income tax system. Second, it is overwhelmingly paid by the middle classes. Billionaires often enjoy effective income tax rates between zero and 2%, while average citizens in France, for example, surrender around 51% of income once consumption taxes are included, with billionaires paying roughly 13% overall. Britain follows a comparable pattern. The result is recursive dysfunction: taxing incomes more than wealth allows the ultra-rich to reinvest and compound advantages through rents and asset appreciation, widening inequality and hollowing out the middle.

A society that taxes work heavily and wealth lightly encourages the accumulation of economic power in few hands. A society that taxes wealth more heavily while leaving productive activity relatively free encourages enterprise and social mobility.

At this point, some readers will accuse me of abandoning libertarian or conservative principles. Neither accusation is correct. What I am proposing is not hostility towards wealth but hostility towards entrenched wealth. There is a profound difference between becoming rich and remaining rich. The former often requires talent, energy, and courage. The latter may require little more than ownership and connections.

This distinction was understood better by the Athenians than by many modern politicians. In classical Athens, the liturgy system (according to young Bryan Mercadente, from leitourgia, meaning “public work” or “service for the people”) required the wealthiest citizens to finance key public services and cultural activities directly from their personal fortunes. It formed one of the characteristic institutions of Athenian democracy, rooted in the idea that great private wealth was held partly by delegation from the city and carried corresponding obligations.

There were two main categories. Ordinary liturgies supported the city’s religious and cultural life on a recurring basis: the choregia (financing and training choruses for dramatic festivals at the Theatre of Dionysus), the gymnasiarchia (maintaining gymnasia and athletes for competitions), hestiasis (providing public feasts for one’s tribe), and others such as leading sacred embassies (architheoria). These were assigned to citizens with property above a certain threshold (around three talents or more). The extraordinary liturgies, particularly the trierarchy, were called upon as needed for defence: a wealthy man (or later groups) would equip, maintain, and often command a trireme warship for a year, at enormous personal cost — sometimes equivalent to a talent or more. This included paying the crew, fitting out the vessel, and serving personally.

Wealthy Athenians frequently complained of the burden, attempted to evade it through legal challenges or antidosis (a procedure allowing one liturgist to challenge another richer man to exchange properties if he thought the assessment unfair), or shared duties as the system evolved (e.g., syntrierarchs or symmories after military setbacks). Yet the principle held for generations: privilege brought visible, direct responsibility. Liturgists gained honour, prestige, and political influence in return — winning prizes, erecting monuments, and earning public acclaim — but the city benefited from magnificent festivals, a powerful navy, and civic cohesion without a permanent, extractive bureaucracy taxing the many. The system reached its peak in the years after the Peace of Nicias but adapted over time before gradually declining in the late fourth century BC as other financing methods emerged.

We need not adopt the full Athenian model — which had its inefficiencies and relied on a smaller, more homogeneous society — but the underlying principle is worth examining closely. Exceptional accumulations of wealth, enabled by the protections and infrastructure of a free society, should entail exceptional ongoing obligations. A modern wealth tax could echo this by requiring the super-rich to contribute directly to core public functions or general revenue, while retaining broad autonomy in their affairs. It was not confiscation or enforced equality, but a practical recognition that great fortune and great service to the polis were linked.

The modern oligarch frequently occupies a different position from the nineteenth-century industrialist tied to factories, workers, and tangible production. Today’s fortunes often derive from intellectual property, data monopolies, platforms with near-unassailable network effects, land portfolios, or financial assets that appreciate through state policies. This wealth can convert into political influence, shaping regulation to protect itself. Classical liberals like Adam Smith warned against such alliances between concentrated wealth and government. A wealth tax, paired with deregulation, counters this without punishing genuine innovation.

I know this appears to conflict with encouraging wealth creation. However, a wealth tax need not drive out the very rich if combined with a programme of deregulation that makes it easier to earn large amounts from capital gains and enterprise. Planning restrictions should be cut back. Energy policy should cease treating industry as a moral offence. Housebuilding and infrastructure should be simplified. Britain should become a country in which it is unusually easy to become rich. The very rich might be forced to hand over perhaps ten per cent of their fortunes every year, yet many would choose to live and invest here because recouping those losses is feasible in a dynamic economy.

A substantial annual wealth tax would also make inheritance tax largely unnecessary. If large fortunes contribute year after year, the state need not come down like a vulture on estates at death. This offends natural intuitions about family continuity far less. Taxing the rental value of land complements the approach. Land differs from other property: its value often arises from the community’s activities — infrastructure, population growth, economic environment — rather than the owner’s sole efforts. Capturing part of that unearned rental value is among the least damaging taxes. It does not discourage work or investment. I do not call myself a full Georgist, but I will take good suggestions wherever they arise.

Critics will raise the objection that the wealthy will simply leave. Capital is mobile. There is truth in this, but it is overstated. People weigh quality of life, rule of law, networks, culture, and stability alongside tax rates. London’s enduring appeal as a financial centre demonstrates this. Enforcement can draw on precedents like the US system of taxing citizens on global income. A targeted wealth tax on the ultra-rich, combined with deregulation, would limit flight while attracting productive capital. Most would prefer compliance in a low-friction environment over the stigma and bureaucracy of evasion.

This is not about expanding the state. Any wealth tax must accompany deep spending cuts. The state should do fewer things, and do them more competently. Functions should return to families, charities, communities, and voluntary institutions. The middle class currently finances services it often supplements privately — tutoring, healthcare, security — while facing a £100,000 tax trap and 60% marginal rates. A wealth tax on very large fortunes (perhaps above £100 million) could raise significant sums — estimates for similar proposals suggest £10-15 billion annually — sufficient to support core functions without broader increases. But the goal is not revenue for its own sake; it is a recalibration that starves harmful spending while freeing enterprise.

The real division in society is not between rich and poor but between productive citizens and rent-seekers — whether in welfare offices or in boardrooms. The middle class stands in between, paying for both welfare dependency and corporate privilege. It is squeezed by asset inflation and regulatory barriers. Destroying this class erodes the foundation of liberal democracy: independent citizens with property, skills, savings, and autonomy, who have a stake in order and liberty.

Tax the rich to free the middle class. Abolish income tax and inheritance tax. Introduce a wealth tax on the very largest fortunes and a land value tax. Pair them with radical deregulation and spending restraint. This is not anti-capitalist. It is more consistent with genuine free enterprise than the present ladder — hard to climb, comfortable once at the top. It taxes accumulated power and economic rents rather than productive effort. It reduces surveillance and restores financial privacy. It discourages permanent oligarchies while sustaining the independent middle class upon which liberty depends.

The present arrangement has had a century to prove itself. The results — a squeezed middle, decaying services, and unaccountable concentrations of wealth — are before us. It is time for a different approach: one that preserves the conditions under which free men can flourish.

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