Briefing 45: Households would be better off in a more equal economy

Reducing the share of total UK income going to the richest 1% to Dutch or Danish levels & sharing the difference across the rest of the population would be worth an extra £2,500 a year to every household

The richest 1% in the UK have more than double the share of the richest 1% in Holland or Denmark.

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Explaining the data

All figures for the share of the richest 1 per cent, plus the UK’s estimated total income, are taken from the World Top Incomes Database via http://topincomes.parisschoolofeconomics.eu.

Of course, if measures were introduced to reduce the share of income going to the richest 1% in the UK, then the £1 trillion total income might also change. But the fact that the share of incomes going to the richest people is much smaller in other modern, prosperous societies like Denmark and the Netherlands  suggests that inequality is not a necessary price of economic success. In fact, research from the International Monetary Fund suggests that inequality hinders economic growth (you can read their paper at http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf). The benefits of reducing the share of UK incomes going to the top 1% maybe worth even more than £2,500 per household.

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