Tag Archives: Tax

How to Tax the Rich – in 10 Easy Steps

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Also Published on the Huffington Post UK

Whatever the make up of the next government – one thing is for certain – it will need to find more revenue. All parties are committed to deficit reduction, and as services and benefits have already been cut to the bone, the only way is to increase taxes on those who can afford it most. Raising taxes is always politically tricky – here’s how to pull it off:

1. Focus on the richest – the top 10% in either income or accumulated wealth. Don’t put up taxes for anyone else – you need as many allies as you can get.

2. Clearly explain what the top 10% means – the top 10% of households have at least £967,000 worth of wealth, in pension funds, property and possessions (compared to total wealth in the bottom 10% of households of £13,000. The top 10% of earners make at least £53,040 a year. Just because someone doesn’t ‘feel rich’ doesn’t mean they aren’t.

3. Point out that most people are not rich – only 19% of taxpayers pay higher rate income tax (meaning than they earn more than £41,000. The average UK income is £26,500. If you’re lucky enough to own your own home (36% of us don’t), the average house price is £250,000. The idea that someone earning £60,000 and living in a £600,000 house is ‘ordinary’ in wealth terms is laughable.

3. Don’t be waylaid by sob stories – many people will come forward to say they are not really rich / are on ‘ordinary salaries’ / have worked hard / deserve a break. Stick to the facts – these are people with substantial disposable wealth and when the country needs additional funds it is better to raise them from increasing taxes on this group than by cutting spending on the poor, cutting services for everyone or increasing public borrowing. Continue reading →

The Case For Tax

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Remarkably, tax has reappeared on the political agenda. Following the direct action activities of UK Uncut, popular attention is now being focussed on tax evasion by large corporations, something with the government is now pledging to address.  Even more surprisingly, there have been some Conservative thinkers that have been suggesting that certain taxes could be raised, namely wealth taxes on assets rather than earning. All this is in striking contrast to the New Labour era, when any raising of income tax was taboo, and increases in spending had to be funded largely by growth and debt (including PFI). But this new mood has not extended to any discussion of taxation in general, and why it might be necessary. It is still often viewed as a bad thing, or an unfortunate necessity. On a recent edition of Newsnight in which MPs were asked what the point of tax was, the answers given were distinctly underwhelming, each falling back on some version of ‘we need tax to fund public services’.  Such confusion and obfuscation is typical of the current debate around tax—while everyone wants more of it on ‘the rich’ and less on themselves, philosophical explanations for taxation are rarely articulated. We need to go beyond this and investigate the differing rationales for taxation, the different ideologies that they spring from, and the position on private property that each ideology ultimately relies upon.

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