Tag Archives: technology

View from the US: Wealth taxes and universal income

Erin Caddell of GK Strategy’s American partner Anchor Advisors unpacks the prospect of wealth taxes on ultra-high net worth individuals and universal basic income to address heightened scrutiny of wealth inequality in the US

Stunning rise in tech wealth reignites policy debate about U.S. income inequality

The dramatic increase in market capitalization among US-based AI and other tech-related companies in recent years, encapsulated by last week’s whopper IPO for SpaceX, is reinvigorating a long-running debate about income inequality in America. Proposals for redistributive policies, such as wealth taxes and universal basic income (UBI), are gaining a new currency in US state capitals and in Washington DC.

The wealth creation of the AI boom is staggering. The SpaceX IPO made founder Elon Musk the world’s first trillionaire. Following Musk, the next nine richest Americans have a collective net worth of $1.7 trillion according to Forbes. All but one of whom (Warren Buffett) is a tech co-founder. Americans for Tax Fairness, a tax advocacy group, estimated that the net worth of America’s roughly 1,000 billionaires has increased by $1.5 trillion in 2025 to $8.2 trillion. Much of the rise is being driven by AI’s boost to tech content and infrastructure providers (as well as the tax cuts approved by President Trump and the GOP-controlled Congress last year).

The achievements of the ultra-rich in harnessing the promise of the latest technology revolution have drawn the ire of everyday Americans grappling with high inflation, increased healthcare costs and the threat of jobs being displaced by AI. This shift in public sentiment is turning on its head an old adage that Americans do not support higher taxes on the wealthy because many believe they, too, will become rich one day in the land of opportunity. A YouGov poll released in January found that 59% of Americans surveyed agreed that the government should pursue policies that narrow the gap between the rich and poor, with a majority of those Republicans surveyed agreeing that the wealth gap is a big problem. Compare this to 1939, when a Fortune magazine poll found only 35% of Americans surveyed felt wealth should be redistributed through higher taxes on the rich.

Policymakers looking for support to address income inequality can point to evidence that the gap between rich and poor is even wider now than in the Gilded Age of the late 19^th century when the technologies of the Industrial Revolution created the first cohort of the ultra-wealthy in America; and ultimately a backlash that led to the antitrust actions around the turn of the century, and later to establishment of the federal income tax in 1916.

Gabriel Zucman, a leading international scholar of wealth inequality, published a book in May with the wonderfully direct title ‘We Need to Tax Billionaires’. It found that the wealth of the top 0.0001% of the world’s richest families represented more than 16% of world GDP in 2025, up from 4% in 1910, and 3% in the mid-1980s.

The early skirmishes on the income-inequality debate are playing out in the American states, where public sentiment can be codified into policy more quickly than at the federal level. Earlier this year, the legislation in Washington state (home of Microsoft and Amazon) was passed and its governor signed a new 9.9% state tax on annual incomes above US$1 million. Massachusetts has levied a 4% surcharge on $1 million-plus earners since 2022. Colorado, Connecticut, Hawaii, Michigan, New York and Rhode Island are considering similar measures.

California, the epicenter of both the AI revolution and worries about thousands of jobs being made obsolete by it, recently submitted enough signatures to place a ‘billionaires’ tax’ on the November 2026 ballot. The measure would impose a one-time 5% tax on California residents with net worth of greater than $1bn, a move projected to raise US$100 billion to fund healthcare, education and food assistance. The initiative has already roiled the state and potentially national politics. California Governor, and likely 2028 Democratic presidential candidate Gavin Newsom, has opposed the measure, arguing it would hurt the state’s tech industry. Labor unions that initiated the proposal are considering a compromise to lower the proposed tax to 2%.

Universal basic income (UBI) is the flip side of the wealth tax. Dating back centuries, UBI intends to provide a modest but unconditional income to all citizens of a society to recognize the dignity and value of each person and to share the benefits of a nation’s bounty. The idea has gained new currency amidst renewed concern in recent years about displacement of workers by technology. Twitter founder Jack Dorsey gave $15 million to a group called the Mayors for a Guaranteed Income to divide into a series of UBI pilot programs. UBI pilots have been launched in recent years in cities including Stockton, California; Durham, North Carolina; and Baltimore, Maryland.

With Trump and the GOP focused on lowering taxes rather than raising them, wealth levies and UBI programs are non-starters at the federal level now. This could change. Democrats are making income inequality a key plank in their campaign for the November midterm elections. Should Democrats win back the White House and gain control of both houses of Congress in 2028 (as Biden and his party did in 2020), they would likely consider wealth-tax proposals already circulating among party leaders. The ‘Billionaires’ Income Tax’ bill proposed in September 2025, for instance, would subject individual taxpayers with assets of greater than US$1 billion or annual income of more than $100 million a year for three consecutive years to an annual tax based on the net gain of their assets (or to deduct the losses). The bill was proposed in the Senate by Finance Committee Ranking Member Ron Wyden (D-OR), a leading voice in Democratic tax policy, and co-sponsored by 20 Democratic Senators.

While UBI has less support at the federal level than wealth taxes, UBI could also gain favor in a Democrat-controlled White House, Senate and House. In October 2025, a dozen Democratic House members led by Rep. Bonnie Watson Coleman (D-NJ) introduced the Guaranteed Income Pilot Program Act, which would provide income equivalent to rent for a two-bedroom apartment for an initial test group of 20,000 Americans. Even Musk himself has become a proponent of UBI, posting on X in April that ‘Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI’.

Individual federal income-tax rates have declined in the US from 91% in 1955 (a vestige of increases to help pay for World War II) to 37% in 2025, while capital-gains taxes have held around 25% over the past decade, according to the Peterson Foundation (see below). Not coincidentally, the entrepreneur has risen in the eyes of the American public during this period, as the ’Organization Man’ archetype of the loyal cog in the paternalistic corporation gave way to the us-against-the-world mindset of the U.S. tech industry, best symbolized by the foundings of Apple and Microsoft in the mid-1970s.

Through the commercialization of the internet in the mid-1990s, to the rise of social media 20 years later, to the acceleration of generative AI with the launch of ChatGPT in 2022, technology has become ever-more central to the U.S. economy and society. Yet the widening gap between the few at the top and the rest below seems to have driven a policy tipping point. With the federal deficit at 6% of GDP, the highest in U.S. history outside of war and the covid-19 pandemic, and individual tax receipts the largest source of federal revenue at 50%, it seems a question of when, not if U.S. policymakers will have to consider raising taxes. The ultra-wealthy are an easy target as part of such an effort. At the same time, pressure to distribute more of the benefits of the tech boom to the rank-and-file who bear its brunt also seems poised to continue to rise through increased support for UBI, as well as for higher standard deductions for federal income taxes, as multiple progressive policymakers have proposed recently.

What does this mean for US-focused investors and corporates?

We do not profess to be able to predict when or by how much tax rates on wealthy Americans will rise. But we do see several downstream effects impacting US-centric companies and their owners from the increased focus on income inequality.

First, a redistributive shift in the tax system would be positive for firms that help individuals and small businesses prepare their income taxes (yes, including those who assist wealthy people in looking for ways to pay less in tax), as well as the many companies that provide services to the tax-preparation industry itself.

Second, companies and investors should be more prepared to view their actions in the U.S. through a more populist lens and to delineate the benefits of their products and services beyond the limited traditional corporate stakeholders of shareholders, customers and employees. Take data centers. In recent years, the tech firms developing the data centers powering the AI boom, led by the multi-billionaires highlighted above, believed the substantial tax revenue they planned to bring to mostly rural or suburban communities where data centers are located would be enough to win support from local citizens. With many local governments across the political spectrum working to halt data-center construction due to concerns about resource utilization and quality of life, developers must take a more holistic approach, thinking through ways to offset the centers’ electricity and water usage; expanding efforts to reduce noise and other potential environmental impacts; and partnering with impacted communities to share in the benefits of the center’s economic activity beyond just paying a tax bill.

Third, should UBI proposals gain further support at the state or federal level, it would help providers of affordable housing, an industry already under the spotlight at the federal and state level as many regions of the U.S. deal with housing affordability issues and shortages.

Whatever the outcome of these and similar debates, income inequality and policies to address it are sure to occupy a larger place in the U.S. policy landscape in years to come.

Will the Chancellor’s ‘securonomics’ strategy drive growth in a new age of instability?

Throughout her time as Chancellor, Rachel Reeves has insisted that the government’s main objective is to facilitate economic growth. During her Mais Lecture on 17 March 2026, Reeves set out a vision for long-term economic growth, using the speech as an opportunity to highlight the ways in which the government will overcome challenges such as fiscal constraints, low productivity, and global instability.

Reeves reaffirmed her belief in ‘securonomics’, an economic strategy where the government helps individuals and businesses gain economic security by investing strategically in sectors like technology, financial services, science and infrastructure. Reeves emphasised that the government needed to play a more active role in guiding investment given the impact of the middle east conflict on the global economy. She stated that market disruptions caused by the COVID-19 pandemic, the Ukraine-Russia war, and the US-Israel war with Iran meant that ‘globalisation, as we once knew it, is dead’. As a result, the government would need to find balance between building resilient public services and facilitating private sector growth, as well as a balance between importing goods and products from other countries and bolstering domestic supply chains.

A central theme of the lecture was the ‘big choices’ the government is making to shape the UK economy over the next decade. The Chancellor placed significant emphasis on securing closer ties with the EU, arguing that it was essential for future growth. She stated that a closer alignment could reduce trade barriers. Reeves acknowledged that Brexit has had a negative impact on the UK economy, a shift from previous years where she had shied away from being overtly critical of Brexit. Reeves stopped short of expressing support for rejoining the EU, instead stating that the UK could find greater alignment with Brussels on policy, while still operating outside the EU’s formal structures. If the government is successful in forming a closer relationship with the EU, she remarked, it could ease the administrative and customs costs for businesses importing from and exporting to the European Union.

While business owners will be pleased to see the Chancellor discussing reducing trade barriers with the EU, Reeves’ attempt to set out a vision for regulatory alignment with the EU may be more concerning for businesses. Reeves said that the government would be prepared to align with EU regulation where it is in the ‘national interest’ to do so, and would maintain regulatory autonomy in sectors with strategic importance for the UK. However, this ignores the post-Brexit reality – the UK and the EU are growing apart on their regulatory goals.

Recent UK governments have increasingly highlighted their ability to implement more flexible approaches to regulation than the EU as a selling point to attract global business. Reeves herself wrote to 17 regulatory bodies in January 2025 urging them to ‘tear down regulatory barriers’ and focus on opportunities to facilitate economic growth. For example, Reeves has implored the Financial Conduct Authority to reduce ‘anti-risk’ regulations and improve competitiveness in financial services sub-sectors, including consumer finance. This is a significant contrast from the EU’s approach, which is more precautionary and is unlikely to result in the reduction of detailed consumer protection rules. If the government does pursue regulatory alignment with the EU in financial services, it would need to consider the impact on regulations, such as affordability assessments and disclosure requirements. Altering these regulations could increase compliance costs for businesses and would likely upset management teams that have spent the last five years adapting to the UK’s Consumer Duty.

The Chancellor also argued that technological advancement is critical to boosting productivity, creating jobs, and positioning the UK as a global leader in emerging industries. As part of this plan, Reeves said the government will support regional growth through fiscal devolution that will empower local leaders, and will also create sector hubs in different cities. This includes establishing Leeds’ Northern Square Mile as a destination for global financial services. To support regional growth the government will create new city-level investment funds and allow regions to retain more of the tax revenues they generate, with the aim of stimulating local investment and reducing reliance on central government.

Reeves commitment to supporting technological innovation in financial services, as well as facilitating growth across the country is likely to provide opportunities to businesses in emerging financial services sub-sectors that harness AI and machine learning. Tech-focused sub-sectors, such as embedded finance, could benefit from these plans, including businesses providing payments and money transfers services, peer-to-peer lending services, and insurtech services. Investors focused on these sectors should monitor the government’s progress in establishing finance or technology sector hubs in various cities across the UK, as well as any funding announcements relating to these sectors.

The Mais Lecture reinforced a consistent economic strategy centred on stability, investment, and reform. While the lecture did not introduce any new policies, it did clarify the government’s long-term economic goals and Reeves’ commitment to ‘securonomics’. However, Reeves will need to use the coming months to share further details on the extent to which she wants key sectors within the government’s industrial strategy, such as the financial services and technology sectors, to be aligned with the EU on regulation. The Chancellor is ‘optimistic’ about the government’s ability to drive investment and growth but will need support from the business community to do so. Investors and businesses should consider potential scenarios where they can support the government to ensure that policy, funding and regulation is geared towards creating the best possible environment for growth in the UK.

If you would like to discuss the Chancellor’s growth strategy and its impact on businesses in more detail, please get in touch with joshua@gkstrategy.com.

GK & Anchor Policy Spotlight: Emerging Regulatory Markets

The next decade and beyond will be defined by global challenges ranging from climate change and food security to geopolitical instability and competition for resources. Governments around the world will be forced to address these at pace, but many of the solutions will depend on technological advances and scientific discoveries that are only just emerging.

Curiosity has always been in GK’s DNA and over the last year we have dedicated considerable time to understanding and engaging with the emerging industrial sectors of the future. Ranging from technological developments in already highly regulated sectors to the sectors that are just emerging as future economic powerhouses, GK has put them under the microscope to unpick the political, policy and regulatory opportunities and challenges on the horizon.

This report is an introduction of that thinking to you. We know our investment community is keen to understand the risks and opportunities in these spaces to stay ahead of competitors in origination strategies, and most importantly, to invest for the future. With the decades of combined experience that informs our counsel, we pride ourselves on seeing the things that others don’t. Our team of consultants in the UK, Europe and the US is uniquely positioned to give a truly global perspective on understanding and growing the future sectors of the global economy.

The Warm Homes Plan and the government’s green agenda

GK’s Hugo Tuckett examines the government’s publication of its Warm Homes Plan and what it means for the government’s green agenda

January 2026 saw the publication of the government’s long-awaited Warm Homes Plan. The plan, which is backed by £15 billion of funding and was originally due for publication in 2025, represents the sum of the measures that the government believes will deliver on its commitment to lower household energy bills by £300 over the course of this parliament (2024-29). It is also one of the government’s most entrenched policies, dating back to Labour’s time in opposition when Shadow Chancellor of the Exchequer Rachel Reeves announced in 2021 that a future Labour government would deliver billions of pounds worth of new funding to support upgrades to the UK’s green infrastructure.

The Warm Homes Plan seeks to deliver a significant expansion of solar panels and heat pumps, marking a departure from previous efforts to improve the insulation of homes. Despite its original billing to improve households’ energy efficiency, the final publication of the plan sets out the energy secretary Ed Miliband’s ambition to deliver a ‘rooftop revolution’ and includes a range of measures designed to support a much greater uptake of solar panels. This has led to some concern amongst charity and industry groups who have warned that shifting to clean heat and electricity generation (including heat pumps and solar panels) before dealing with the scale of draughty homes is only going to lead to an increase in bills in the short term. It does though demonstrate the government’s shift in approach from seeking to reduce household energy consumption to increasing energy generation from renewable sources.

Ministers are eager for households to adopt a range of green measures to substantially lower bills and, in some cases, deliver ‘zero-bill’ households. The government’s thesis is that investing in the roll out of new technologies now, including heat pumps, will drive down costs further in the medium-to-long term. It also becomes much cheaper and more efficient to use a heat pump when combined with battery storage systems and solar panels. Critics will say that the government should be thinking much more radically about how it plans to rebalance the levies on energy, so that it can bring down the cost of electricity for all if it really wants to see people make the shift from gas to electricity. Aside from the government reiterating its decision to remove £150 worth of levies from energy bills through the abolition of the Energy Company Obligation (ECO), this plan does not tackle that more intractable problem.

The funding included in the plan is predominantly aimed at low-income households, but there is some financial support available to all homes. The plan will administer £4.4 billion in grants to low income households and social landlords. This will include fully funded upgrade schemes, including solar and heat pumps, depending on the assessment of the building. It will also establish a £5.3 billion Warm Homes Fund which will be available to all households. This includes £2 billion in low-and-no-interest consumer loans and £2.7 billion for innovative finance products in the home upgrade system. The government aims to upgrade five million homes by 2030 and lift one million homes out of fuel poverty through the plan, which will be overseen by a new government body, the Warm Homes Agency.

The publication of the plan is a significant moment for the government and for energy secretary Ed Miliband. Despite previous climbdowns on the amount of funding that would be made available to support the government’s green agenda, Miliband has deftly navigated both HM Treasury and the Cabinet to retain a sizeable portion of funding to deliver on his ambitions in the sector when other departments are experiencing real-terms cuts. As the 2029 general election approaches, there will be real pressure on the Department for Energy Security and Net Zero to deliver on the ambitions of the plan, which sits in an area of public policy where the government will be hoping to draw a clear dividing line with Reform UK. The government has spent a lot of its first 18 months in power talking up its efforts to boost the UK’s green credentials and lower household energy bills – now it’s all about delivery.

Cleared for take-off? The policies shaping the UK drone industry

The government has set itself the ambitious goal for becoming the fastest growing economy in the G7. This lofty ambition sits at the heart of the government’s agenda and is central to its industrial strategy – a 10-year plan to increase business investment in the industries of the future. The drones sector has been identified as a frontier industry, with the government clearing a flightpath for the UK to be a world leader in drone innovation and technologies.

Driving this move is the extraordinary economic potential of drones. A recent PwC report states that the sector could contribute £45 billion to the UK economy and support 650,000 jobs by 2030. Further analysis undertaken by Frazer-Nash consultancy for the government suggests that with public support and a shared strategy and ambition between government and industry, the sector could have contributed £103 billion by 2050. Together, these findings demonstrate how collaboration between government and industry can lead to a thriving drones sector which can drive growth and innovation across the UK.

Regulatory challenges

For this growth to be unlocked, the government must work to address regulatory challenges that constrain innovation. Across government, companies face a range of overlapping rules that can slow commercial deployment and limit investment. One of the largest constraints on the sector is the requirement to keep the drone within the line of sight of the operator. Additional health and safety regulations enforced by the Civil Aviation Authority (CAA) also prohibit drones being flown within a 50m radius of people. This constrains the range of operations drones can perform, limiting their use in many areas such as delivery, infrastructure inspection, and large-scale surveying, particularly in urban areas.

The Health and Safety Executive (HSE) also limits the growth of drones operating in the agricultural sector, with the HSE requiring companies to get approval for almost all aerial spraying. The HSE states that there is a 52-week processing time for drone applications, which will inevitably undermine the innovation and adoption of drones in the agricultural sector.

All these affected areas are where drone technology offers incredible commercial potential, so overcoming these regulatory barriers will be key for businesses looking to unlock growth in the drones sector.

These challenges are not insurmountable and government and industry collaboration is already underway to tackle them. The Regulatory Innovation Office (RIO) is leading a series of pro-innovation reforms for the drones sector, including the introduction of a single, standard risk assessment process to cut approval times for complex drone operations. They are also working on expanding the CAA’s atypical air environment policy, which enables the use of drones Beyond Visual Line of Sight (BVLOS), with the ROI providing £8.9 million in funding for innovative projects that will test the effects of new BVLOS standards. The ROI has also worked with the HSE to make it legal for drones to spray slug pellets, which is a major step forward for agricultural drones businesses.

Public concerns

Drones businesses also face challenges of public perception. The research done by Frazer-Nash consultancy estimated that without public support, the size of the sector will be £65 billion by 2050. That represents a £38 billion reduction in the sector compared to the scenario with public support. Given the incredible economic value that lies in public support, addressing public concerns, such as the use of drones for criminal activities, are of great importance to the sector and government to ensure businesses reach their full potential.

The government is already thinking about innovative solutions to the public perception challenge. In November 2025, the government launched a technology challenge which will encourage industry to develop innovative systems capable of detecting drones designed by criminals to evade current detection methods. If successful, this challenge will help the government intercept drugs being delivered by drones into prisons.

The government’s willingness to cut red tape and find innovative solutions to the challenges facing the sector creates opportunity for the sector. However, it remains essential for companies to engage with the government, both to push further on reducing overly prohibitive regulation and to address public concerns surrounding drone safety. By doing so, businesses can play a central role in shaping a regulatory landscape that supports innovation, builds public trust, and cements the UK’s position as a global leader in drone technology.

If you’d like to discuss drones and the wider political landscape in more detail, please reach out to Jacob on Jacob.walsh@gkstrategy.com

Sky’s the limit: Why agri-tech should engage on drone law reform

Drones and autonomous flight technologies are set to revolutionise how we travel, deliver goods and produce food, and the government has taken note. As part of a comprehensive three-year review into the regulatory framework of autonomous flight and the use of drones, the Law Commission has launched a second consultation. Its three-year review is nearing completion with recommendations expected to be published by early 2026 and will shape how this fast-moving sector evolves. For innovators in agri-tech and beyond, the opportunity to help design the rules that will govern a sky filled with commercial drones is now.

Flying free from EU constraints

Legislative agility to facilitate innovation is the ambition and ties into the government’s wider economic growth agenda. Aviation law in the UK is prescriptive and duly geared towards the passenger aviation sector. With the UK no longer bound by EU aviation rules, policymakers can now craft a more bespoke, agile regulatory environment that encourages experimentation, accelerates innovation and attracts investment.

However, the government has identified a possible post-Brexit dividend as the current regulatory regime is largely a carryover from current EU law. This presents a unique opportunity to break away from legacy constraints and design a tailored regime for UK-specific innovations and ambitions. A more flexible regime could fast-track the safe deployment of cutting-edge drone technology and give UK-based companies a first-mover advantage, enabling them to export innovations globally.

Drones on farms: Unlocking agri-tech potential

Commercial applications of drone technology are wide ranging. For the food and agriculture sectors alone, drones could revolutionise farming operations:

Precision agriculture from monitoring crops based on thermal sensors to scanning fields and accurately predicting crop yields.
Agricultural sprays deploying pesticides, fertilisers and herbicides thereby reducing labour costs, use of chemicals and their environmental impacts, and identifying diseases or pests to prevent wider outbreaks.
Irrigation management by identifying drainage issues to drought-stressed areas and enabling the more efficient use of water and real-time crop water requirements.
Crop insurance and assessment by providing accurate, unbiased and detailed imagery required by insurers to speed up claims processes.
Harvesting assistance by providing crop maturity assessments to more effectively plan harvesting schedules and boosting the quality of crop yields.
Forestry and orchard management by measuring canopy growth, quantifying tree populations and aiding pruning schedules.

The economic case for drone-powered agriculture

There are many economic benefits – from reduced labour and input costs through more precise allocation of resources, to increasing crop yields via data driven decision making. Lower chemical and water usage not only cuts costs but also supports environmental sustainability. For businesses able to make the capital investment, drone technology is set to become a core component of modern agricultural management, policymakers should be engaged on this.

Government support signals lift-off

There is clear momentum in government to embrace drone technologies. The aviation minister has confirmed £20 million in funding for new flight technologies, including £5m earmarked for the Future of Flight Challenge. These initiatives could create government-backed testbeds for agri-tech solutions and help de-risk businesses ready for investment. For innovators in the sector, this is a moment to engage directly with policymakers, to shape the regulatory framework and unlock the commercial potential of drone led farming. The Law Commission’s second consultation is open until 18 July 2025, and alongside a wider engagement programme, this is a key opportunity to have your voice heard and set the direction of travel for the sector.