As Labour’s appetite for more spending, especially on welfare, becomes ever more voracious, so its search for new tax revenues to foot the bill becomes ever more desperate. The latest wheeze is for a wealth tax, which is rapidly becoming the Labour Left’s answer to any and all spending shortfalls.

Former Labour leader Neil Kinnock is the latest party grandee to put his authority (such as it is) behind the idea, claiming on Sunday that a 2 per cent tax on assets over £10million would add an extra £10billion a year to Treasury coffers.

Others on the Left insist it could be much more, maybe £20-£30billion, depending on the tax rate and at what level of wealth it clicks in at.

These are fantasy figures, pure and simple. Many countries have dabbled in wealth taxes – but none has come close to collecting Kinnock’s £10billion, never mind forecasts two or three times higher.

In 1990, 12 rich nations had a variety of wealth taxes. The amount of tax they generated was so derisory that, 35 years later, only three countries still bother with them – and they all bring in a pittance.

You can understand the attraction of taxes on wealth. Since the Global Financial Crisis of 2008, the value of assets has soared while wages have largely stagnated. 

Put simply, the rich have got richer – sometimes a lot richer – while the living standards of the rest have stagnated. So why not tax those who’ve done well more to help those who are struggling?

It’s an alluring argument and appeals not just to the Left but to those who don’t think a wealth tax will affect them. Robbing Peter to pay Paul is always popular if your name isn’t Peter. The problem is that levying a wealth tax is anything but simple and its ability to generate fresh funds anything but clear.

A newly-elected President Macron scrapped the wealth tax in 2018 and replaced it with a simpler, more modest tax based on property values

Again and again, experience has shown there is no pot of gold at the end of the wealth tax rainbow. 

There are huge arguments over what assets to include in the wealth tax’s purview: Your primary residence? Your small business? Your works of art? The more exceptions, the more scope for avoidance. The fewer exceptions, the greater the political backlash.

There are even bigger arguments over how to value the assets to be taxed: How much is that art really worth? How do you value a business not quoted on the stock exchange?

Rich people can afford the best lawyers and accountants prepared to argue the toss ‘till the cows come home. And if they think they’re been treated unfairly, they’ll just leave, taking the taxes they already pay with them and leaving the public exchequer worse off.

That’s been the experience of wealth taxes everywhere, nowhere more so than in France, whose economy and population is pretty much the same as ours.

I’ve spent a lot of time in France over the years and seen the insidious effects of the wealth tax close up.

At first, even wealthy folk thought they could get round it. When that proved false, they became mired in its complexities. Finally, they just upped sticks and left, often for the French-speaking parts of Switzerland just across the border. Some even chose London in the days when UK taxes were regarded as reasonable.

In the decade after the year 2000, an incredible 40,000 millionaires left France, costing the French exchequer £6billion a year in lost revenue. 

Since the French wealth tax itself never brought in more than around £4billion a year – even at its height it never amounted to more than 1.5 per cent of total tax receipts – you don’t need to be an accountant to see it was hardly a revenue-generating panacea.

But that was only the half of it. The cost of collection was enormous: you can imagine just how hard wealthy French families fought over the tax authorities’ valuation of their art collections and wine cellars. It was quite the conversation at fashionable dinner parties in Paris and the Côte D’Azur for a time.

Plus, those who left for friendlier tax climes were inevitably the more entrepreneurial, the sort of folk inclined to invest their capital and ‘sweat equity’ in new ventures. 

Thus did France lose out not just on tax revenues but growth-boosting, job-creating business investment. 

Labour politicians might care to take note.

The wealth tax was often unfair too, hitting those who were asset rich but lacked the cash flow to pay the tax. Some I knew had to sell assets just to meet their tax bills.

They were not especially rich – just folks who had worked hard to build a decent business with valuable assets but only modest profits. 

They kept it going because it was a family tradition and/or because it was a crucial source of jobs in their communities. You’d think the Left might value that.

In the end, a newly-elected President Macron scrapped the wealth tax in 2018 and replaced it with a simpler, more modest tax based on property values. Few even on the Left mourned its passing.

Socialist Sweden had pretty much the same experience. Its wealth tax never brought in more than £400million a year but, between 1965 and 2007, when it was abolished, it’s estimated that Sweden lost £120billion to capital flight (a large-scale exodus of financial assets) and wealthy individuals fleeing a penal tax.

No mainstream Swedish party proposes to bring it back. Maybe Kinnock et al should speak to their comrades in the Swedish Social Democrats and French Socialists before spouting off again.

Wealthy individuals are already leaving our shores. A record 16,500 high net worth individuals, with almost £70billion in assets, are already forecast to desert Britain this year, mainly for Dubai, Italy, Switzerland and Singapore, because of the current level of tax and the prospect of more to come. A wealth tax would turn that river into a torrent.

Yachts moored in Nice. In the decade after the year 2000, an incredible 40,000 millionaires left France

The punk Left in Britain affects to be unconcerned: good riddance, it says, to the unpatriotic rich not prepared to pay just a little more of their wealth to help the rest of us.

But that is Britain’s tax base walking out the door: the top 1 per cent of income earners now account for almost 30 per cent of income tax revenues; the top 5 per cent almost 50 per cent (more than the bottom 50 per cent cent of income taxpayers combined).

Britain depends on rich taxpayers more than any other advanced economy. The more who leave, the more those left behind will have to pick up the tab, including people on modest incomes.

In a way, that would be more honest. It is one of the great lies of the British Left that we can finance ever-more generous European levels of welfare spending merely by extra taxes on the rich.

Nowhere in Europe is that true. Every European country with higher levels of welfare spending than us also has considerably higher taxes and social charges on those on average incomes.

The British Left hasn’t the guts to level with the British voter on that. But soon it might have no choice. 

If all its talk of more taxes, including a wealth tax, provokes an even bigger rush of the rich for the door, then only those on more modest incomes will be left to foot the bill for its welfarist extravagance.

Of course, bloated, high-tax welfare states are a guarantee of economic stagnation and decline, as evidence from Europe overwhelmingly illustrates. But unless that dawns on the British people pretty quick, the Left will have taken us too far down that road for a change of course to be an option.

The talk is of wealth taxes. But what is really at stake is the very future of our country.