What If the Rich Aren’t the Problem — But Our Financial Education Is?

What If the Rich Aren’t the Problem — But Our Financial Education Is?

The UK does not have a wealth problem.
It has a structural and educational one.

Once again, the idea of a wealth tax is being floated as a solution to inequality. The message is familiar. The richest should pay more to close the gap between those who have and those who do not.

At first glance, this feels reasonable. Living costs are rising, wages feel stagnant, and homeownership is slipping further out of reach. Something clearly is not working.

But wealth taxes address a symptom, not the system.

Before assuming that concentrated wealth is the root cause, it is worth asking whether we are solving the right problem at all.

The existence of wealth is not what creates inequality. The way opportunity, incentives, taxation, and financial education are structured does.

That distinction matters.

Wealth is often portrayed as something extracted from society rather than built within it. In reality, much of today’s wealth was created through innovation, risk-taking, and business formation. Founders built companies that employ thousands. Investors funded ideas that reshaped entire industries. Entrepreneurs created ecosystems that support jobs, tax revenue, and economic growth.

These are not abstract benefits. They are measurable contributors to GDP, employment, and long-term economic resilience.

The issue is not that wealth exists. It is that we struggle to channel it productively and consistently within the domestic economy.

This is where wealth taxes are often misunderstood.

High-net-worth individuals are globally mobile. Capital moves faster than policy. Countries like the UK are not operating in isolation. They are competing with jurisdictions such as Dubai, Switzerland, Singapore, and Portugal, all of which actively court capital with favourable tax structures and regulatory certainty.

When taxation becomes punitive rather than strategic, wealth does not disappear. It relocates.

And when it relocates, the consequences are rarely discussed honestly.

In the UK, the top earners contribute a disproportionate share of total tax receipts. Income tax, capital gains tax, stamp duty, corporation tax, VAT, and employment taxes from the businesses they run all compound into a significant revenue base. When even a small percentage of that group leaves, the impact is not symbolic. It is fiscal.

The shortfall does not vanish. It is absorbed elsewhere through higher taxes on the middle class, reduced public services, or increased government borrowing.

This is why wealth taxes, when treated as a moral solution rather than an economic tool, often fail. They feel corrective in the short term but weaken the system over time.

Housing is a good example of how this misdiagnosis plays out.

The UK’s housing crisis is real, but it is not caused by wealthy individuals buying prime property. It is driven by population growth outpacing supply, restrictive planning laws, underinvestment in social housing, and incentives that encourage speculation over utilisation.

Blaming wealth avoids confronting these structural failures.

Smarter solutions already exist. Taxing long-term vacant properties in high-demand areas. Reforming planning laws to unlock development. Incentivising builders to create affordable housing at scale. These policies activate capital rather than punish its existence.

The deeper issue underneath all of this is rarely addressed.

The UK has a financial literacy problem.

Most people were never taught how money works. Not in school. Not at university. Not in the workplace. Concepts such as inflation, compounding, asset diversification, and long-term planning remain poorly understood across income levels.

As a result, it is entirely possible to earn a strong salary and still feel financially insecure. This is not just about tax brackets. It is about behaviour, structure, and decision-making without a framework.

Worryingly, this lack of understanding extends to policy design. Schemes like Help to Buy were introduced to improve affordability but instead inflated prices by increasing demand without increasing supply. That was not a failure of intention. It was a failure of financial understanding.

You cannot build a resilient economy if neither households nor policymakers fully understand how capital behaves.

Raising taxes without addressing education is like pouring water into a leaking bucket. The problem is not the amount going in. It is what escapes unnoticed.

A more durable approach is unglamorous but effective. Embed financial education early. Normalise long-term planning. Reward reinvestment, innovation, and domestic contribution. Design tax systems that discourage unproductive hoarding without penalising productive risk-taking.

Wealth inequality is a real issue. But it is not solved by treating success as the enemy.

A fairer economy is built by giving more people access to the knowledge, tools, and systems that allow wealth to be created, preserved, and reinvested over time.

The question is not whether the rich should contribute. They already do.

The question is whether we are building a system that multiplies wealth sustainably, or one that slowly drives it away while leaving the underlying problems untouched.

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Max Gerstein
Financial Adviser
Helping professionals and business owners protect what they’ve built, grow it intelligently, and make long-term financial decisions with clarity and confidence.