Tax the Seriously Rich to Stop Cuts
It became unfashionable during Labour’s days in power in Westminster, but mainstream politicians need to use their public profiles to trigger discussion about taxing the seriously rich, and not allow the media to get away with misleadingly translating this in to an attack on the middle classes.
A couple of weeks ago, Art Uncut carried out a peaceful protest at Glastonbury against U2 for putting their money through foreign banks to avoid taxes. While the Guardian reported a heavy-handed response by the festivals private security, I was also intrigued by the public response.
Watching on television, I could hear the cheering from the crowd as the security removed the banner. There were also news interviews with festival-goers who didn’t agree with the protests and on the Guardian’s comments section I found one post which summed up the negative comments: “So U2 moved their tax affairs to the Netherlands? So what? I challenge any person here to say that they wouldn’t pay less tax if they could.”
It’s easy to dismiss this as fans just wanting to see a band play and not really being interested in taxation, but I think there is a more worrying side to this. It’s easy to find posts all over the internet critical about UK Uncut actions, such as this sarcastic one about Topshop and Vodafone protests: “Yeah, right. Let’s all pay the maximum amount tax due, let’s all stop using entirely legal ways to reduce our tax bill. Who’s first? Nobody? Thought so.”
The argument is that it’s hypocritical to campaign against tax evasion because none of us volunteer to pay more taxes than we have to and, if popular brands like U2 and Topshop aren’t breaking the law, then they are not fair game for protests.
If we are surrounded in day-to-day life by likeminded people we like to assume that the anti-cuts movement is supported by everyone, but I fear that these pro-cut anti-tax beliefs are more widely held than I’d like to believe. And all too often the popularity of brands like U2 and Topshop overwhelms the messages of the anti-cuts movement.
And I blame politicians. In particular mainstream left of centre Members of Parliament who know that taxing the rich would bring millions of pounds in to the public sector which could save essential services from being cut, but how often do you hear them say this in public? Politicians are in a unique position to get this debate out to the public – they have access to the media, and ability to build profile of campaigns, in way that organisations like UK Uncut really need.
Politicians are also the only people who can deal with the hypocrite accusation. Simply, the fact this kind of tax-evasion remains legal gives the public impression that it is fair practice. Politicians should be arguing for laws to be changed to make businesses trading in the UK pay fair taxes.
When Topshop -owner Sir Philip Green’s wife received a £1.2 billion tax-free dividend in 2005, all Labour MPs should have been publicly up in arms. Tax law should have been changed to stop this kind of money from being moved out of businesses trading in the UK without tax penalties, I’m sure there are a number of ways this could be done. And politicians should have been using their media presence to explain that this is not the same as a middle class person taking advantage of any regular tax-breaks. This is like a tax-break specifically for the mega–rich and it’s grossly unfair.
In defence of working people
Outrage and disgust are filling the hearts of ordinary working people as they see their societies ripped apart by inhuman cuts under the fallacy that the only way to reduce the deficit is by destroying the role of the state. The propaganda of the Conservative/Liberal coalition is exposed in the following
Are the Government cuts necessary? The answer to this question may be no, as there are a number of ways of reducing the deficit. The fairest way would be to substantially raise taxes. Taxes put a higher burden on wealthy people and leave necessary services untouched.
Suggestions like this produce the response by the wealthy “why should I pay more?”. The answer is that nearly all wealth is created by ordinary working people and it is hard to imagine anyone who is self made in economic terms. All wealth appears to be dependant on ordinary working people in the following ways
A. Most company’s need workers to make a profit.
B. Share markets banks etc need company’s to speculate on (Thus Workers)
C. Retailers and wholesalers need customers to make a profit (workers)
There are many more examples where working people provide the means for wealth creation even the unemployed serve an economic purpose by keeping waged labour lower. The aforementioned would appear to suggest that ordinary working people are the bedrock of wealth generation on whom most are dependent. With this in mind, it seems fair and reasonable to make the people who have benefited from others pay more in taxes. This could be done in numerous ways some are listed below.
A. Vat/Tax on private Education.
B. Vat/Tax on private Health.
C. Substantial increase in inheritance tax by introducing a number of tires that progressively take more as the value of the estate goes up.
D. Substantial increase in council tax by introducing a number of tiers above where it is caped at the moment.
I am not an economist and tend to see economics as more of an Art than a Science and can see how easy it is to be lured into the agenda of the right and believe that low tax economies are the only successful way to go. Below are a few suggestions as to why this view may be a fallacy if they don’t satisfactorily answer your response they may at least open up the debate.
1. If you look at America before the economic collapse one can see a low tax economy producing great wealth with the belief that this will somehow trickle down and every one will prosper. This would seem to be a myth as it would appear that a significant part of the population then and now lack sufficient medical cover and welfare provision .
2. Higher taxes it may be suggested can contribute to a system of welfare and education that allow creativity and wealth creation, through that sense of security the individuals feels able to extend themselves. Investment in students brings both individual and economic rewards to society. Investing in arts and sciences fosters both creativity and innovation.. some company’s it may be suggested are only interested in the maximization of profit and not a long term legacy thus the role of the state starts to become apparent
3. I am informed that the UK after the Second World War faced huge debts but was still able to set up the NHS and bring about the Welfare State. This begs the Question how was it done? The answer in large part appears to be through higher taxation
4. After the election both the Conservatives and the Liberals suggested that the basic rate of tax would have to go up by about 6% over a number of years to close the deficit and the only way forward was cuts to welfare and the role of the state. It may be suggested that the above-mentioned figure could be significantly lowered By extending inheritance tax in line with the value of the estate ( The lager the estate the higher the percentage)and higher direct taxes upon the wealthy which seems fair as wealth creation seems in large part dependent upon labour (see above). Closing loop holes in offshore bank accounts may gain more revenue this could be done by making private companies disclose salaries (as the public sector now has to do) and profits and encouraging employees to report tax evasion and abuse by offering a reward and freedom from prosecution
I dont think that it is the fantasy of the lottery win that completely accounts for the lack of totally widespread support for taxing the rich, wealthy & successful people and companies as much as possible. Although it plays a part. 🙂
I think a bigger part is that very few people like paying taxes and, through solidarity, feel the same for others. Provided the tax that is legally due is paid then they dont have much sympathy with the idea of voluntarily paying more taxes.
I have argued from the start of the UKUncut actions that the target is wrong. There needs to be a reduction in the number of loopholes and avoidance techniques and waving banners in a BHS Cafe or shouting though a megaphone at the entrance of the Vodafone shop will not achieve a voluntary increase in the tax paid by them. As for the Fortnum & Mason sit-in, what did that achieve? No doubt a feel good even for those taking part but wont stop those rich enough from shopping there from doing so, nor will it increase the amount of tax it is legally required to do so.
The target for all of this effort should have been tax offices, inland revenue offices, HMRC & the Treasury. That is where tax rates are set, tax reduction schemes are designed and tax collectors decided how much to collect. If you want richer people and successful companies to pay more tax then that is where to start surely?
If you got Vodafone to pay more taxes than it needs to do its shareholders not have a right to complain about poor financial governance? Again, it is not Vodafone that needs to change but tax collection itself.
I’ve wondered about this response. Could it be that some people like to fantasize about being über-wealthy themselves one day and so want to defend their right to keep “their” money if they ever happen to win the lottery (metaphorically or literally)?