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Rachel Reeves has set November 26 as the date for her next Budget — and working-class people are bracing for yet another squeeze on them, while the rich are yet again left alone.

With the Chancellor’s “non-negotiable” fiscal rules still in place, the ordinary public risks paying the price for sluggish growth and rising borrowing costs while the super-rich continue to go scot-free.

But there is a fairer, smarter alternative: taxing the returns on wealth rather than the wages and lives of ordinary people.

Reeves herself has said the UK economy “isn’t broken,” but “is not working well enough for working people.”

Bills are high, wages have stagnated, and public services are under strain.

Yet Labour’s election manifesto promised not to raise taxes on “working people,” including VAT, National Insurance, and income tax.

Last year, Reeves’ minimum wage increase combined with higher employer National Insurance Contributions opened a can of worms, sparking a backlash from multiple quarters and highlighting the tensions built into today’s economy*.

So the Budget is likely to focus on either cutting spending, raising revenue in ways that hit ordinary citizens, or a mix of both.

Economists are warning that, with sluggish growth and inflation ticking upward, some combination of tax hikes and spending restraint is inevitable if Reeves is to meet her self-imposed “non-negotiable” borrowing rules.

The problem is stark: the UK is one of the richest countries on Earth, yet millions of people feel poorer than ever. Why? Because wealth is concentrated at the top.

It has been said that 10 per cent of people now control 57 per cent of all private wealth. Asset prices, from housing to stocks, have ballooned, enriching those who already had wealth while leaving the rest of us behind.

This isn’t just a matter of fairness — it’s a question of stability. Research shows that societies with extreme inequality suffer worse health outcomes, higher crime, lower trust, and slower economic growth.

That is the context in which ordinary wages have stagnated while wealth has been treated as if it were sacrosanct.

Yes – a traditional wealth tax falls short

On the surface, a wealth tax — a direct levy on net worth — seems an elegant solution: ask the richest to contribute a little more, and you could generate significant revenue.

But history tells us that wealth taxes rarely work in practice, for multiple reasons:

• Valuation problems: complex assets like businesses, art, or land are difficult and expensive to value.

• Administrative costs: collecting a wealth tax is resource-intensive.

• Avoidance and flight: the wealthiest know how to move money offshore or shelter it in legal structures.

• Liquidity issues: asset-rich but cash-poor individuals may be forced to sell at the wrong time.

These practical and political challenges mean that a full-scale wealth tax is often more aspirational than effective. But that doesn’t mean we’re powerless — it means we need smarter, more targeted approaches.

Taxing capital returns: a fairer alternative

Instead of chasing net worth directly, a far more effective approach is to tax the returns on capital: income from dividends, interest, rent, and capital gains.

Currently, income from work is taxed far more heavily than income from wealth — a backward and inequitable system that benefits landlords, investors, and hedge fund managers over nurses, teachers, and other working people.

Here’s how this could work in practice:

Equalise Capital Gains Tax with income tax: currently, capital gains often benefit from lower rates than income tax. Aligning these rates would raise roughly £12 billion annually.

Introduce a surcharge on investment income: applying a 15 per cent surcharge on dividends, interest, and rent — with protections for modest savers — could raise another £18 billion.

Reform pension tax relief: capping relief at the basic rate for high earners could raise £14.5 billion, reducing the disproportionate benefits currently enjoyed by the wealthiest.

VAT on financial services: Many financial services are used mainly by wealthy households; taxing them could add around £8.7 billion.

Progressive property taxes: instead of tinkering with Council Tax bands, a fairer approach would be to scrap Council Tax entirely and replace it with a progressive wealth-based property tax – as Vox Political has proposed previously.

Together, these reforms could generate tens of billions of pounds annually, provide funds for public services, and begin to address the structural inequalities that have left the majority behind.

Will the wealthy flee? NO!

Some argue that taxing capital returns will drive the wealthy to flee the UK. This is nonsense.

Most wealthy individuals benefit from the infrastructure, stability, and institutions that make countries like the UK attractive in the first place.

Those who leave are unlikely to take with them the innovation and jobs that ordinary citizens rely on – and they can’t take assets like property.

Moreover, if someone’s loyalty lies solely with their bank account, perhaps their departure isn’t such a loss.

These proposals are not radical.

They are about fairness.

They are about taxing all income — from work or wealth — at appropriate rates.

They are about nudging the economy toward productive investment rather than idle accumulation.

Why it matters now

With Reeves’s November Budget, the government has a clear choice. It can continue the status quo — squeezing ordinary people to satisfy arbitrary fiscal rules — or it can finally act to rebalance the system in a way that is both practical and just.

The tools to tax wealth effectively already exist. What is missing – as ever – is the political will.

Citizens can help provide that push. Writing to MPs, asking them to support reforms that tax capital like work, can make a difference.

Contact your MP via TheyWorkForYou.com takes minutes – and if enough of us speak up, it could force this issue onto the political agenda.

Vox Political‘s verdict

The question isn’t whether the UK can afford to tax the rich – it’s whether we can afford not to.

Rachel Reeves’s Budget could be an opportunity to begin repairing a system that has failed working people for decades.

By taxing capital returns fairly, she can fund vital public services, reduce inequality, and create a more sustainable economy — all without hitting ordinary workers for the sake of self-imposed fiscal rules.

November 26 is the day the government will decide whether to pick the pockets of the poor – or ask the rich to pay their due.

With pressure from citizens, we can ensure her choice is the right one.

The wealthy must contribute their fair share — because in one of the richest countries on Earth, everyone else has already been paying too much for far too long.

*Some employers responded defiantly, passing the costs onto consumers or cutting staff to protect profit margins. Reports suggest that two-thirds of top retailers raised prices, while around a quarter reduced headcount, and over half cut paid hours or overtime to manage the new financial pressures. This shows how some businesses prioritise profits over the well-being of their employees.

Other businesses weren’t acting out of greed; they were squeezed by suddenly higher overheads. Small and medium-sized enterprises operating on tight margins faced tough decisions: trimming hours, freezing hiring, or scaling back operations. Analysis from the Federation of Small Businesses emphasised that many of its members struggled to absorb the changes, revealing just how vulnerable SMEs are to policy shifts.

And then there were firms that simply couldn’t afford the changes at all. Labour-intensive sectors, in particular, faced unsustainable cost increases. The Institute for Fiscal Studies estimated that tens of thousands of low-paid workers could see job losses or reduced hours as a direct consequence of the combined rise in National Insurance and minimum wage.

Across all these cases, there’s a common thread: many low-wage workers still rely on Universal Credit to make ends meet. In effect, taxpayers are propping up wages that are too low to live on, while employers shift costs and complaints up the chain. The controversy over Reeves’ double measure wasn’t just about policy missteps; it exposed a fundamentally distorted economy in which ordinary people are paying — directly or indirectly — to sustain an uneven system.

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