Maybe Gary Linekar should stick to football.

Today Gary Linekar asked Barnham to tax him and other millionaires more.

He has suggested a 2% wealth tax. ie paying 2% tax on your overall wealth each year if you have wealth more than £10Million.

So Gary's network worth is widely reported as £30 Million.  He no longer receives the £1.35Million salary from the tax payer funded BBC.

So he would be paying an additional £600,000 tax each year. Since leaving the BBC it looks like most of his "income" is into companies which he either owns or has control of and it is unclear whether he has any income from these companies.

So let's assume he was still at the BBC earning £1.35Million. He would take home £727,286 after tax so he would be paying an additional £600,000 in tax so his net income would be a modest £127,286.

Now maybe he is OK with this. There is nothing stopping him paying £600k additional voluntary tax each year.  

If his income sources dry up then it won't be long before his net wealth declines.

The problem is wealth tax is a tax on your assets not your income or earnings.  Got a £10 Million house - then you pay £600k tax each year.  Got £10M in the bank?  Let's assume you get 4.5% interest on the cash deposit so you will earn £450k in interest before tax which you will pay 45% tax so £202,500 yax and will lose £600k from your cash pile each year. The cash pile will be  £9.6M next year not £10M. 

 It's confiscation really.

I also have a problem with the concept of mandatory wealth tax introduction.  Once it becomes established then greedy politicians will be tempted to reduce the threshold from £10M to £5M then £5M to £2M and keep lowering it until everyone pays.  The threshold will also be frozen so fiscal drag pulls everyone into confiscation over the decades.  

Now maybe it can be written into law that the threshold is linked to CPI and the rate of taxation is fixed at 2% and that any policitian who tries to change it is guilty of treason but I suspect that will never happen.

So back to this demand to be taxed more.

There are about 15,000 people in the UK with a wealth of £10M or more. Patriotic Millionaires UK claim this wealth tax could raise £24 Billion per year. 

So let's do the maths £10M@2% x 15,000 = £200,000 x 15,000 = £3 Billion.

So in order for this to raise £24 Billion it really means the Billionaires are paying the lion's share.

There are 350 people in the UK with a wealth of more than £340M and just 157 people with a wealth of £1Billion or more. 

So let's go round the loop again - there are say 14,000 people with wealth more than £10M, 193 people with wealth of £340M and 157 people with wealth of £1Billion. 

So the first group taxed will raise £2.8Billion,  the second group would raise £1.3Billion and the final group of 157 would raise £3.14 Billion (£20M each in extra tax per year) so a total of £7.5 Billion.

The claim this tax would raise £24 Billion per year is wildly optimistic. 

Now I suspect that a proportion of these Billionaires will simply relocate to Italy - £20M in addiitonal tax per year on top  of the £30 Billion in tax this group already pay is not insignificant - it's a 10% increase.

In the scheme of things Gary Linekar is a minnow tax payer.

Now let's put this into context.  This wealth tax could raise realistically £7 Billion per year not the £24Billion.

In the 3 days in office Barnham has promised

£850M cost of reducing VAT on electric bills

£940M of extra Defence funding per year over next 5 years

£3700M  to raise the personal allowance by £500

£500M to cap bus fares at £2M

£100M to cut pub business rate tax

So he has promised £6 Billion in spending which are unfunded in just 3 days.  He needs this £7 Billion wealth tax now...Assuming he keeps making these unfunded promises at a rate of £2Billion per day then pretty much everyone will need to pay these wealth taxes.

Gary - please just stick to football and set a good example and pay £500k in voluntary tax right now.