I think some of the people that support the Occupy LSE and Robin Hood Tax campaigns have a slightly warped view of wealth in the UK. There is very little work done to explain actual wealth but the Office for National Statistics did do some work recently. They did a survey called “Wealth in Great Britain, 2006/8”.
The survey covered the period July 2006 to June 2008. Over the two-year period the Wealth and Assets Survey achieved a sample size of 30,595 private households. Grossed to the population, this represents 24,580,000 households.
The report underlined what some of us already knew. Wealth in Britain is not dominated by the yachts and mansions of the super rich. It is dominated by regular people’s houses (39% of wealth) and regular people’s pension funds (39% of wealth).
The Robin Hood Tax will only further diminish pensions by increasing the frictional costs associated with holding all asset classes. Pension funds do entirely reasonable things such as balancing their funds to track indices and maintain a spread of investments across different sectors. They change the mix of assets in a person’s pension pot as they age from relatively high risk, high return asset classes such as equities to lower risk, lower return asset classes such as bonds. All of these transactions would be taxed by the Robin Hood Tax increasing pension charges and depressing pension returns further still.
The Robin Hood Tax will also make mainstream products such a fixed rate mortgage more expensive. Underlying these products will be a derivative which allows the building society or bank to lay off the risk of offering a fixed rate.
The Robin Hood Tax will steal from regular people.