The overwhelming majority of people in Britain support the idea of a one-off 20% wealth tax on the richest 10% of the population that could pay off the national debt. The coalition government claims that the only way to start dealing with £800bn of national debt is through cuts in government spending (£64bn over the next five years).
Hitting the poor
Conservative prime minister David Cameron claimed on 21 October that the tax and benefit changes were fair, being hardest on the rich, and therefore “progressive”. The highly-respected Institute for Fiscal Studies (IFS) reported on 21 October that in fact the changes would hit the poorest hardest. The June emergency budget was “clearly regressive”. The tax and benefit changes announced on 20 October were “more clearly regressive” – at least for the bottom 90% of the population. The poorest families with children, earning on average £15,932 a year, will lose nearly 7% of their income, or £1,112 a year, as a result of the government’s measures, said the IFS.
74% say “Tax the rich”
Instead of this punishment of the poorest people in society for the economic destruction caused by the recklessness of the wealthiest people, Dr Greg Philo of the Glasgow Media Group has proposed a thoroughly progressive measure which could erase the national debt through a 20% tax on the richest 10% of Britons, who own £4,000bn of assets (five times the size of the national debt). Philo describes the scheme as “akin to a student loan for the rich”, as the tax would not have to be paid immediately. The richest 10% could opt to make the tax payment part of their death duties when they die. John Underwood, former director of communications for the Labour party, commented that while there are technical issues (“it may be difficult to calculate and collect”), the most significant aspect of the concept was that it is “an astonishingly popular proposal”, with 74% support in a YouGov poll of 2,000 Britons. Greg Philo points out: “Only 10% [of people in the poll] did not approve, and agreement was spread right through social groups, with those of the highest income being slightly more supportive than the lower.” “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,” the Glasgow University academic wrote in the Guardian in August.
Romayne Phoenix, one of the signatories of the declaration of the Coalition of Resistance (CoR), a new grouping formed opposed to the cuts, expressed qualified support: “As an idea plucked out of the ether, it seems to have much more moral validity than the current government proposals.” However, Phoenix expressed concern at focusing solely on tackling the deficit: “we need to be asking what sort of society we want to be living in.” Paul Mackney, former general secretary of the National Association of Teachers in Further and Higher Education and a member of the CoR, was more bullish: “A progressive income tax is the passport to a civilised society, and the amounts that professor Greg Philo is suggesting actually may be lower even than the tax rates that were being paid as late as the mid-1980s under the Thatcher government.”