durhamleft
15th September 2010, 16:37
pull back the national debt in 1 year by a one of tax on the richest in society.
http://www.guardian.co.uk/commentisfree/2010/aug/15/deficit-crisis-tax-the-rich
How can the sixth richest nation in the world be contemplating cuts in school meals services and regressive forms of taxation? In the political and media commentaries on the national crisis and the need for cuts, there has been very little discussion on how much wealth there is and why "we" as a nation are apparently so poor. Actually the economy keeps growing, and we are becoming richer than we were before the financial crisis.
The total personal wealth in the UK is £9,000bn, a sum that dwarfs the national debt. It is mostly concentrated at the top, so the richest 10% own £4,000bn, with an average per household of £4m. The bottom half of our society own just 9%. The wealthiest hold the bulk of their money in property or pensions, and some in financial assets and objects such antiques and paintings.
A one-off tax of just 20% on the wealth of this group would pay the national debt and dramatically reduce the deficit, since interest payments on the debt are a large part of government spending. So that is what should be done. This tax of 20%, graduated so the very richest paid the most, would raise £800bn. A major positive for this scheme is that the tax would not have to be immediately paid. The richest 10% have only to assume liability for their small part of the debt. They can pay a low rate of interest on it and if they wish make it a charge on their property when they die. It would be akin to a student loan for the rich.
The tax would be extremely popular. We commissioned a YouGov poll of over 2,000 people to test attitudes. There was very strong support, with 74% of the population approving (44% strongly approving). Only 10% did not approve, and agreement was spread right through social groups, with those of the highest income being slightly more supportive than the lower. The strongest support came from those over the age of 55, with 77% in favour (47% strongly). This is an extraordinary result given that there has been no public discussion of this proposal and that the very negative consequences of the alternatives are only just beginning to emerge.
There are strong economic arguments for this tax. A key problem for the British economy is that much of the nation's resources have been directed into inflated property values, which is where many of the bonuses ended up. This is in effect dead money but the tax would have the effect of re-circulating it as government spending, which could stimulate growth. The deficit would thus be further reduced as the unemployment resulting from the proposed cuts would be avoided – thus no increase in unemployment pay and no loss in tax revenue from the unemployed. This proposal offers a real alternative, to move debt off the government's books, using money that is largely trapped in the housing market, from people who will not miss it.
There will be arguments against it. It will be asked whether such a tax can be collected, but it is easier in some ways than income tax. The rich tend to minimise their declared income, but wealth is more publicly displayed, whether it is multiple properties or million-pound rings from Graff. Will they take their money somewhere else? It seems unlikely that the top 6 million people will up sticks to live in Belize. The current rhetoric of crisis, national interest and "everyone must share the pain" will contribute to demands for strict enforcement. If people have substantial assets, want to live here and to be British, then they will have to pay their bit. The public will have little time for non-doms, exiles or what will be seen as unacceptable attempts at avoidance. It is economic war, as Vince Cable says, but this is a move away from using the poor as cannon fodder.
At present David Cameron is arguing for policies that may radically reduce growth, put up unemployment and affect the bottom 6 million people hardest – those who literally have no wealth at all. He is doing this when the Conservatives received just 3% more votes in this year's election than they did in 2005. There is no popular mandate for what is being proposed, certainly not from those who voted Liberal Democrat. The consequence of what they are doing is likely to be serious social unrest. The British people are not passive and it is a myth that they will accept policies that they see as profoundly unfair. The new Tories might look back and remember what happened to the poll tax.
We need to not only educate people about the socialist alternative to the mess capitalism has caused, but also make sure they know that there is nothing 'progressive' about these cuts!
http://www.guardian.co.uk/commentisfree/2010/aug/15/deficit-crisis-tax-the-rich
How can the sixth richest nation in the world be contemplating cuts in school meals services and regressive forms of taxation? In the political and media commentaries on the national crisis and the need for cuts, there has been very little discussion on how much wealth there is and why "we" as a nation are apparently so poor. Actually the economy keeps growing, and we are becoming richer than we were before the financial crisis.
The total personal wealth in the UK is £9,000bn, a sum that dwarfs the national debt. It is mostly concentrated at the top, so the richest 10% own £4,000bn, with an average per household of £4m. The bottom half of our society own just 9%. The wealthiest hold the bulk of their money in property or pensions, and some in financial assets and objects such antiques and paintings.
A one-off tax of just 20% on the wealth of this group would pay the national debt and dramatically reduce the deficit, since interest payments on the debt are a large part of government spending. So that is what should be done. This tax of 20%, graduated so the very richest paid the most, would raise £800bn. A major positive for this scheme is that the tax would not have to be immediately paid. The richest 10% have only to assume liability for their small part of the debt. They can pay a low rate of interest on it and if they wish make it a charge on their property when they die. It would be akin to a student loan for the rich.
The tax would be extremely popular. We commissioned a YouGov poll of over 2,000 people to test attitudes. There was very strong support, with 74% of the population approving (44% strongly approving). Only 10% did not approve, and agreement was spread right through social groups, with those of the highest income being slightly more supportive than the lower. The strongest support came from those over the age of 55, with 77% in favour (47% strongly). This is an extraordinary result given that there has been no public discussion of this proposal and that the very negative consequences of the alternatives are only just beginning to emerge.
There are strong economic arguments for this tax. A key problem for the British economy is that much of the nation's resources have been directed into inflated property values, which is where many of the bonuses ended up. This is in effect dead money but the tax would have the effect of re-circulating it as government spending, which could stimulate growth. The deficit would thus be further reduced as the unemployment resulting from the proposed cuts would be avoided – thus no increase in unemployment pay and no loss in tax revenue from the unemployed. This proposal offers a real alternative, to move debt off the government's books, using money that is largely trapped in the housing market, from people who will not miss it.
There will be arguments against it. It will be asked whether such a tax can be collected, but it is easier in some ways than income tax. The rich tend to minimise their declared income, but wealth is more publicly displayed, whether it is multiple properties or million-pound rings from Graff. Will they take their money somewhere else? It seems unlikely that the top 6 million people will up sticks to live in Belize. The current rhetoric of crisis, national interest and "everyone must share the pain" will contribute to demands for strict enforcement. If people have substantial assets, want to live here and to be British, then they will have to pay their bit. The public will have little time for non-doms, exiles or what will be seen as unacceptable attempts at avoidance. It is economic war, as Vince Cable says, but this is a move away from using the poor as cannon fodder.
At present David Cameron is arguing for policies that may radically reduce growth, put up unemployment and affect the bottom 6 million people hardest – those who literally have no wealth at all. He is doing this when the Conservatives received just 3% more votes in this year's election than they did in 2005. There is no popular mandate for what is being proposed, certainly not from those who voted Liberal Democrat. The consequence of what they are doing is likely to be serious social unrest. The British people are not passive and it is a myth that they will accept policies that they see as profoundly unfair. The new Tories might look back and remember what happened to the poll tax.
We need to not only educate people about the socialist alternative to the mess capitalism has caused, but also make sure they know that there is nothing 'progressive' about these cuts!