The Letter Was Sincere
On July 23, 120 millionaires signed an open letter to the new prime minister. They titled it “Proud to Pay.” Gary Lineker signed it. Brian Eno signed it. Musicians, founders, and former executives signed it. The letter asked the government to raise taxes on the very wealthy - a group that includes the signatories themselves.
The sincerity is not in doubt, and it should not be mocked. The letter argues that wealth is undertaxed relative to work, that the richest should carry more of the national load, and that the country they are proud of needs the revenue. The signatories told the Mirror that “millionaires are a patriotic bunch - we love this country and we want it to succeed.”
That is a defensible position, sincerely held. Let us take them at their word. If the only question were whether the signatories mean what they say, the debate would end here.
The interesting question is not whether they mean it. The interesting question is what they did next. And what they did next is the subject of this article.
The Facility Already Exists
Here is a fact most people do not know. HM Treasury already accepts voluntary payments. The mechanism is official, public, and old. The government’s own guidance explains, in plain terms, how any member of the public or any business may make a voluntary contribution to the state. You do not need to be a millionaire. You do not need a lawyer. You do not need permission. In the USA a similar facility exists for voluntary contributions.
The process takes minutes. A person who believes they should pay more than the law demands can simply do it. No press release is required. No signatures are needed. No campaign must be launched. The money goes where the letter says it should go, and it arrives today instead of whenever a tax law might arrive.
This is the “compared to what?” question, and it is the most powerful question available here. When someone says “tax us more,” the honest response is not an argument. It is an invitation. The facility exists. The mechanism has worked for years. The only thing missing was the checks.
So the 120 signatories faced a real choice on July 23. They could have written 120 checks to the Treasury that morning. The Treasury would have accepted every one of them. Instead, they wrote a letter asking the government to compel payment from everyone like them.
That choice is information. In economics we call it revealed preference. What people do with their own money tells you more than what they say in public. The letter says one thing. The choice of a letter over a check says another.
The Check Is the Test
Let us be precise about what the signatories did not do, because precision matters here.
They did not refuse to pay more. They did not deny that the country needs revenue. They did not ask for loopholes or exemptions. They asked the state to compel payment from a class of people that includes themselves.
Compulsion is the key word. A voluntary payment costs the signatories their own money, today. A wealth tax costs other people their money, through the state. The first is a gift. The second is compulsion.
The distinction is not cynical. It is human. People prefer policies that feel fair to gifts that cost them personally, even when the policy would cost them more in the end. A wealth tax would take more from a millionaire over time than a voluntary check would take today. Yet the letter was easier to sign than the check was to write.
Notice the difference in effort. The letter took weeks to organize. Signatures had to be gathered. A launch had to be coordinated. The press had to be briefed. The check takes minutes. When a group of wealthy people chooses the harder path that costs them nothing over the easier path that costs them something, the choice tells you what the letter is actually for.
The Political Economy of the Letter
This is where Public Choice Theory earns its keep. The framework, which won James Buchanan the Nobel Prize, applies the logic of incentives to politics itself. Politicians are not angels. They respond to incentives exactly like everyone else.
Consider the government’s position. It is carrying about 63 billion pounds of spending plans - pledges on defense, housing, social care, and more, costed at up to 63 billion pounds by 2030. Its revenue base is being squeezed by an energy shock that the Bank of England says is only the beginning.
A government in that position needs something. Not money, precisely - money can be borrowed, and the rules around borrowing are negotiable. What it needs is a mandate. It needs to be able to say “the country wants the rich to pay more” and hold up evidence.
A letter from 120 millionaires is exactly that evidence. It is cheaper than a tax base. It cost the Treasury nothing. It arrived pre-signed, pre-argued, and pre-covered by the press. The poll that followed found almost four in five backing a wealth tax on the super-rich.
This is the concentrated-benefit, diffuse-cost structure we traced against California’s Proposition 40. The political payoff of promising to tax the very rich is immediate and visible. The costs - capital that leaves, investment that never arrives, revenue that quietly fails to materialize - are delayed and diffuse. They never show up in a press release. We have documented the track record in “California’s Wealth Tax”: France repealed its wealth tax, Sweden abandoned its own, and the revenue projections that sold the idea rarely survived contact with the tax base.
The letter helps the government capture the concentrated benefit. The signatories provide the mandate; the government provides the tax; the costs arrive later, spread across everyone. Nobody has to be dishonest for this to work. Everyone is simply responding to the incentives in front of them.
The Squeeze Has a Calendar
The incentives are not abstract this time. They have dates on them.
On July 31, the chancellor confirmed the budget for October 28 and promised, in POLITICO’s telling, to build it on fiscal discipline. Count the days from today: 84. Between now and then, the government must reconcile 63 billion pounds of plans with a household budget that is shrinking.
The direction of travel is already visible in the government’s own moves on tax structure. On July 30, the prime minister announced that England’s mayors would keep a share of the income tax collected in their regions - the first time city-region mayors have had such a share. The taxes already exist. The question is who gets to spend them, and the answer is being rearranged. When a government starts moving revenue around, it is because revenue is the live question.
Underneath all of it is the energy shock we examined in “The Second Inflation Wave”. The price cap rose 13 percent on July 1, taking the typical annual bill to about £1,862. The Bank of England held rates at 3.75 percent on July 30 and warned that the conflict in the Middle East will push inflation up again later this year. The good news of July was a reprieve, not a permanent change.
Put the pieces together. A government with 63 billion pounds of plans. A revenue squeeze from an energy shock that is only beginning. A budget 84 days away. And a letter from 120 wealthy people saying “tax us more” - without writing a check.
The letter is not the solution to the government’s problem. It is the opening bid in an argument about who will pay for the 63 billion. The signatories have already told us, by their choice of a letter over a check, which side of that argument they want to be on. And the wealth the letter points at is the wealth that, as “The Usefulness of Billionaires” showed, funds the long-horizon, high-risk investments that governments do not (and should not) make - the capital whose quiet departure is the diffuse cost that never makes the press release.
The Lens
None of this is a verdict on the signatories. Their letter was sincere, and sincerity deserves respect. The people who signed it believe they are doing right. In the letter, they are.
But the letter is not the last word. It is the first word in a negotiation about who pays for the 63 billion, and the negotiation has a deadline: October 28, 84 days from today.
Next time someone says “we can afford it,” ask one question: why are they writing a letter instead of a check? The letter is the policy. The check is the price. And only one of them was ever on the table.
This is the third in a series on Public Choice Theory. Start here: Public Choice Theory: Why Government Doesn’t Fix What Government Breaks →