'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.'
Read more at Deficit crisis: let's really be in it together (Greg Philo at Comment is Free).
More on cuts and resistance:
Comedian Mark Thomas says stand up against the cuts (The Sauce)
A howl for humanity (Though Cowards Flinch)
Resisting Cameron's Big Lie (Kevin Blowe at New Left Project)
Why Tories are attacking good governance by axing audit commission (Liberal Conspiracy)
How do you cut the deficit without a double dip? Tax the rich (John Grieve Smith in The Observer)
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You see, you know I already disagree with this.
ReplyDeleteWhy I disagree with this, isn't that I don't think the rich should pay for this crisis, they should - you and I haven't gained too much from the last 10 year boom but they have.
What annoys me about this is the inconsistency with previous arguments about the deficit. If it is conceded the deficit is a problem (which in the short to medium term it is not) then we have already lost. The Tories have the numbers atm to force the reduction in spending/increase in taxes onto the poor and will do so. If the left concede this ground with vague plans to tax the rich I don't think it has any chance of success.
It would be like recommending the same terrible policy that Labour did 1931-35 http://duncanseconomicblog.wordpress.com/2010/08/03/the-deficit-and-political-strategy-1931-1935/
Further to my last comment, I thought I'd read something here about deficits:
ReplyDeletehttp://luna17activist.blogspot.com/2010/07/who-is-winning-debate-about-cuts.html
You agree the left needs to command the terms of debate. If we concede the need to reduce the deficit at the moment then the Tories will win this debate. We need to not propose any way to reduce the deficit, because at the moment that is a bad in itself. If we give ground the Tories will twist that to their advantage and we will be left without a way to fight back.
I think it's essential we challenge the myth that the deficit has to be cut fast, that it's some kind of national emergency, or even that cuts are necessary in a more gradual, less severe, way. I agree completely about that.
ReplyDeleteI also think, however, that we need to argue for taxing the rich and for retrieving uncollected taxes. It is possible to do both: challenge the 'this deficit MUST be slashed' myth and also raise alternative demands for taxing the wealthy, cutting Trident etc.
One reason is that we are, frankly, going to struggle with the first of those challenges. The dominant idea is deeply embedded in people's consciousness - it's widely assumed that the deficit must be slashed. But it's possible for many people who accept that idea to nonetheless agree with the left about tax justice. We need to reach out to those people.
The polling data Greg Philo refers to indicates the potential for re-framing the debate in this way, and also implies there are grounds for popular mobilisation. The issue of taxing the rich also draws attention to the fundamental political question in all of this: who pays for the crisis?
It exposes the fact that the government is imposing unjust and regressive measures, which will increase inequality and which force the majority to pay while the richest escape unscathed.
There's nothing wrong with us triangulating the deficit debate if it is in response to specific statements. So, clearly Philo is tackling the "we're all in it together" aspect...
ReplyDeleteThe problem with increasing taxation on the rich is less revenue will be forthcoming. That is what happens. The rich move and hide wealth. If you reduce the tax on the rich more will be declared (no need to hide it) and revenue will rise. I know it sounds daft but that is what happens.
ReplyDeleteRaising taxes on the rich should be accompanied by committing to actually collecting the unpaid taxes owed. This is a key argument put by the PCS union, for example: resources put into tax collection and into closing loopholes pays enormous dividends.
ReplyDeleteYou've missed my point. If you do try to tax more, the rich will employ more resources to find other loopholes or even just leave the country. What you end up doing is reducing the government revenue. Next you discourage investment into the country because of the higher taxation.
ReplyDeleteIf you reduce the tax on the rich you end up with more revenue and more investment.
And I forgot when you increase tax you need to spend more money on collection and detection. if you don't believe me have a look at the history of US taxation .. when they reduced tax significantly their revenue increased. Why? because it wasn't worthwhile taking the risk of hiding the income. This lead to less inspectors of tax and thus less money in the collection of tax. I know it sounds strange but if you think about it, it makes sense.
ReplyDelete