A ONE-OFF wealth tax on millionaires should be considered if the government decides to raise taxes to pay for pandemic supplies and measures, according to a new report.

The new Wealth Tax Commission, set up during the first Covid-19 lockdown, has suggested a 1 per cent tax on millionaire couples.

Over a five-year period, it would raise £260 billion and would be preferable to increasing income taxes or VAT, the authors said.

The government has spent £280bn on the pandemic. Borrowing is set to soar to a peacetime high of £394bn  — 19 per cent of GDP in 2020-21.

A wealth tax would be fairest because the richest have the “broadest shoulders,” researchers on tax policy and practice, and three commissioners from the London School of Economics and the University of Warwick, said.

Their report suggested that a threshold of £1 million per household would raise £260bn over five years, which, it said, would equate to raising VAT by 6p or the basic rate of income tax by 9p.

It calculates wealth as assets worth more than £1m, including property values after any mortgage, and pension pots.

A threshold of £4m per household could raise £80bn over five years, the report adds.

Richard Murphy, a progressive tax expert who discussed the report with the authors before publication, told the Morning Star that Chancellor Rishi Sunak does not currently have to repay pandemic debts, but that a wealth tax could be an option if and when he decides to raise taxes.

However, he said that a one-off wealth tax would be complicated and time-consuming to set up. He instead suggested raising current ongoing taxes on wealthy people that have low rates.

Mr Murphy, who is the director of Tax Research UK and professor of accounting at Sheffield University, said he would not back a one-off tax as the first resort, as it could cause a sudden reduced demand for goods and services and could result in more unemployment.

He suggested taxes on earnings from investments and rents, increasing capital gains tax, and reducing “the amount of tax reliefs that we give to the wealthy” to raise an extra £50bn a year — £250bn over five years.

Last month, the Office for Tax Simplification recommended equalising rates of capital gains tax to income tax rates.

On Friday, Argentina passed a new “millionaire’s tax” on about 12,000 rich people to pay for pandemic supplies and measures.