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A fairer society needs fairer taxation A fairer society needs fairer taxation
(5 months later)
The latest annual rich list (Report, 22 April) reveals that the richest 1,000 people in Britain, just 0.003% of the adult population, increased their wealth by £35bn last year and by a mind-boggling £190bn since the crash four years ago. That's just their gains: their total wealth has now reached £449bn. Each one of the richest 100 on average possesses wealth exceeding £2bn, and there are now 88 billionaires in Britain.The latest annual rich list (Report, 22 April) reveals that the richest 1,000 people in Britain, just 0.003% of the adult population, increased their wealth by £35bn last year and by a mind-boggling £190bn since the crash four years ago. That's just their gains: their total wealth has now reached £449bn. Each one of the richest 100 on average possesses wealth exceeding £2bn, and there are now 88 billionaires in Britain.
This surge towards ever more extreme inequality really matters. First, in paying down the budget deficit the super-rich are making virtually no contribution at all, while hard-working families have had to take a cut in real wages of 7% in the last two years and those out of work have had to endure benefit cuts of £18bn. A fair policy, by contrast, would reduce the deficit by levying a capital gains tax charge on the post-crash gains of this Midas-rich 1,000, which at the current 28% rate should raise up to £53bn, more than enough to kickstart the economy and create a million or more jobs – without any increase at all in public borrowing (Osborne please note).This surge towards ever more extreme inequality really matters. First, in paying down the budget deficit the super-rich are making virtually no contribution at all, while hard-working families have had to take a cut in real wages of 7% in the last two years and those out of work have had to endure benefit cuts of £18bn. A fair policy, by contrast, would reduce the deficit by levying a capital gains tax charge on the post-crash gains of this Midas-rich 1,000, which at the current 28% rate should raise up to £53bn, more than enough to kickstart the economy and create a million or more jobs – without any increase at all in public borrowing (Osborne please note).
Second, extreme inequality leads to instability and a crash. Wage-based demand in rich economies provides about two-thirds of economic demand, and in the periods leading up to both the 1929-31 and 2008-09 crashes the wage share fell heavily while wealth ballooned at the top. British wage-earners today have some £100bn less in their pockets than if national income were shared now as it was in the late 1970s.Second, extreme inequality leads to instability and a crash. Wage-based demand in rich economies provides about two-thirds of economic demand, and in the periods leading up to both the 1929-31 and 2008-09 crashes the wage share fell heavily while wealth ballooned at the top. British wage-earners today have some £100bn less in their pockets than if national income were shared now as it was in the late 1970s.
Third, today's massive polarisation in wealth dangerously concentrates economic power. The interests of the hyper-rich don't align with the national interest because their wealth is invested globally and their political influence is directed not towards UK national recovery, but towards unfettered corporate power, tax havens and gutting the public sector through privatisation and outsourcing.
Michael Meacher MP
Labour, Oldham West and Royton		Third, today's massive polarisation in wealth dangerously concentrates economic power. The interests of the hyper-rich don't align with the national interest because their wealth is invested globally and their political influence is directed not towards UK national recovery, but towards unfettered corporate power, tax havens and gutting the public sector through privatisation and outsourcing.
Michael Meacher MP
Labour, Oldham West and Royton
• You report (22 April) that a storm is (rightly) brewing over the appointment of the former head of npower, Volker Beckers, as a non-executive director of HMRC, despite its almost nonexistent tax payments from 2009 to 2011. This is a broader issue than just this one individual, disturbing as this case is. There's developed in recent years a fast-revolving door between businesses and industry and the public sector. The argument is that this shares skills and knowledge. Instead, all too often it breaks down sensible barriers between regulators and decision-makers and those affected by their rules and decisions.
Natalie Bennett
Leader, Green party		• You report (22 April) that a storm is (rightly) brewing over the appointment of the former head of npower, Volker Beckers, as a non-executive director of HMRC, despite its almost nonexistent tax payments from 2009 to 2011. This is a broader issue than just this one individual, disturbing as this case is. There's developed in recent years a fast-revolving door between businesses and industry and the public sector. The argument is that this shares skills and knowledge. Instead, all too often it breaks down sensible barriers between regulators and decision-makers and those affected by their rules and decisions.
Natalie Bennett
Leader, Green party
• The logic of the principle of taxation advanced by Eric Schmidt (Google chief defends low tax payments, 23 April) is that those who contribute to the wellbeing of society should be exempt from taxation. Schmidt goes on to assert his valuation of the contribution of Google to society in response to the charge of paying virtually no corporate taxes in the UK. Presumably he thinks his valuation of the moral merit of Google's actions trumps the social merit of the public space needed for society to function. Even Google requires that space to flourish. We lesser-deserving members of society must subsidise the morally superior Google shareholders. This is a desperate defence of extreme greed.
SP Chakravarty
Bangor		• The logic of the principle of taxation advanced by Eric Schmidt (Google chief defends low tax payments, 23 April) is that those who contribute to the wellbeing of society should be exempt from taxation. Schmidt goes on to assert his valuation of the contribution of Google to society in response to the charge of paying virtually no corporate taxes in the UK. Presumably he thinks his valuation of the moral merit of Google's actions trumps the social merit of the public space needed for society to function. Even Google requires that space to flourish. We lesser-deserving members of society must subsidise the morally superior Google shareholders. This is a desperate defence of extreme greed.
SP Chakravarty
Bangor
• George Osborne's stated support for G20 action on tax reform is welcome, but it's important that the government continues to show leadership on the full gamut of transparency issues – not just headline-grabbing ones around tax (George Osborne vows to marshal G20 nations to fight tax evasion, 20 April). A report out this week from the International Aid Transparency Initiative details good progress by donors on reporting how much aid they give, to whom, and for what. This will help drive aid effectiveness and government accountability. But some countries are still lagging behind.• George Osborne's stated support for G20 action on tax reform is welcome, but it's important that the government continues to show leadership on the full gamut of transparency issues – not just headline-grabbing ones around tax (George Osborne vows to marshal G20 nations to fight tax evasion, 20 April). A report out this week from the International Aid Transparency Initiative details good progress by donors on reporting how much aid they give, to whom, and for what. This will help drive aid effectiveness and government accountability. But some countries are still lagging behind.
As joint chair of two key initiatives – the UN high-level panel on the post-2015 development agenda and the open government partnership – and host of the G8, the UK has an unmissable opportunity to promote access to information as a core driver of good governance and successful poverty reduction. We look forward to seeing them take it.
Tom Berry
Development Initiatives		As joint chair of two key initiatives – the UN high-level panel on the post-2015 development agenda and the open government partnership – and host of the G8, the UK has an unmissable opportunity to promote access to information as a core driver of good governance and successful poverty reduction. We look forward to seeing them take it.
Tom Berry
Development Initiatives
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