Empirical foundations for a UK wealth tax: measurement, identification and direct microsimulation

This paper evaluates a recurrent UK wealth tax by separating macroeconomic identification from direct revenue microsimulation. The historical analysis constructs a Wealth‐linked Tax Mix and a Statutory Pressure Index for 2006–7 to 2023–4, but weak‐instrument‐robust inference does not identify a sufficiently precise GDP effect. The principal analysis uses linked Wealth and Assets Survey round 8 microdata covering 15,128 Great Britain households and 32,271 persons. Observation‐level microsimulation permits asset exclusions before thresholding, re‐ranking after each design change, alternative tax units, and joint wealth–income liquidity incidence. A 1% household wealth tax above £1 million excluding private pensions generates £12.6 billion in gross statutory liability, £9.5 billion in collectible revenue before explicit administration, and approximately £9.0 billion in illustrative long‐run direct net revenue. Re‐ranking reduces the central tax revenue estimate by 41% relative to the earlier grouped comparator. Around 41,000 households face both high liability relative to income and insufficient liquid resources. The results support transparent design ranges and targeted deferral rather than a single macroeconomic forecast.