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Britain rakes in more tax from wealth than any other major economy, according to a new report. The UK raises more than any other member of the 38 OECD countries, including Spain, Norway and Switzerland which have a specific wealth tax, the research by the Institute for Economic Affairs think tank found.

Meanwhile, wealth inequality is lower than the EU average with the richest 1% owning around 22% of total wealth, compared to 25% for Brussels and 35% in the US. The report calls for measures to encourage wealth creation, rather than a tax demanded by Zack Polanski's Green Party and left-wing Labour MPs, including a housebuilding boost to help more people become homeowners.

Dr Kristian Niemietz, editorial director and head of political economy at the IEA, said: "The current hype around wealth taxes is entirely vibes-based, and completely undeserved.

"Wealth taxes have been tried many times before, and no actually existing wealth tax has ever come close to delivering what its keenest supporters are promising today.

"Among economists, even those who are sympathetic to wealth taxes in principle concede that it comes with a myriad of practical problems and harmful side-effects.

"Everything wealth tax campaigners are trying can be better achieved in other ways. There are vastly superior alternatives to wealth taxes."

Leading tax expert Dan Neidle said the UK's biggest problems are "anaemic economic growth and a lack of supply of housing".

He added: "An annual wealth tax offers no solution to either, and risks actively hindering the growth we desperately need.

"This paper does an important job of shifting the debate: if we want to tackle inequality, the answer isn't an unworkable new tax; it's building homes and letting more people build wealth of their own."

Former Brexit minister Lord Frost, a senior policy fellow at the IEA, said wealth taxes are "fantasy solutions advocated by those who don't want to face up to the task of implementing an economic strategy that will genuinely make us richer and more prosperous".

He said: "What Britain needs is less spending and lower taxes, not another effort to extract even more from hard-pressed businesses and voters."

In its 2024 general election manifesto, the Green Party proposed an annual wealth tax of 1% on assets above £10 million and 2% on assets above £1 billion.

Speaking last October, Mr Polanski insisted that his party's demand for a wealth tax is "ultimately about reducing inequality".