On Question Time last week, Zack Polanski, the Green Party leader and erstwhile boob-whisperer, declared that there is no evidence that the wealthy leave Britain because of wealth taxes. A bold claim, and a wrong one. It’s also revealing, symptomatic of a growing belief on the populist left that Britain’s problems could be solved if only we shook the ultra-rich’s pockets a little harder.

Polanski assured the audience that a wealth tax would only fall on those with more than £10 million in assets – as if this made it both morally tidy and economically painless. Unfortunately, history and basic arithmetic disagree. France tried almost exactly that, with a rate charged on individuals ranging from 0.5 per cent to 1.5 per cent on assets over €10 million (£8.7 million).

For all the rhetoric about ‘justice’, a wealth tax is less about fairness and more about theatre

The outcome was not a revenue boom, but a mass exodus of the very taxpayers it targeted. Between 2000 and 2016, some 60,000 millionaires upped sticks. The impôt de solidarité sur la fortune (ISF), or solidarity tax on wealth, contributed just two per cent of tax receipts during its lifespan.

Eric Pichet, a French economist, estimated that the ISF cost his country twice as much revenue as it generated. By 2017, Emmanuel Macron had slashed it to stem capital outflow and revive growth.

But the appetite for ‘one last raid on the rich’ has proven hard to kill. This week, the Institute for Fiscal Studies (IFS) suggested that the Chancellor Rachel Reeves could mount a one-off wealth tax to help plug the £30 billion black hole in Britain’s public finances. The IFS called such a move ‘an economically efficient way’ to raise fund.

Yet in the same breath, the think tank admitted what experience already shows: recurring wealth taxes drive out capital and leave countries poorer. It warned that the UK is now ‘increasingly reliant on a relatively small number of taxpayers for a large share of revenue’, and that these individuals are ‘more internationally mobile and........

© The Spectator