When it comes to taxation issues and tax reform, the arguments always comes back to politics and ideology, says Simon Sweetman.
We have to realise that the positions we take on tax are always political, or at least ideological. It was Bertrand Russell who said, “Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.” It is a quotation that seems particularly apt at the moment.
In response to a piece I wrote recently, somebody answered: “Only trade union officials who are communists or socialists, and lecturers from minor polytechnics, still see things in terms of class.”
My first thought, of course, was that this must have come from someone living in the 1970s when there might indeed have been communist trade union officials and polytechnics, but my second was how you can possibly analyse the UK’s current political situation without some theory of class?
One could of course quote Warren Buffett, who as far as I know has never been a trade union official or a polytechnic lecturer. He said: “There’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
The evidence for that, of course, is that in the USA the real wages for ordinary workers have not risen for 30 years and all the gains from economic expansion have gone to the wealthy. It started later here, but over the last ten years the same is true in this country. Now, according to the IFS, the current policies will lead to a 10% fall in living standards for most people.
Buffett has also said, “If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end - people like myself - should be paying a lot more in taxes. We have it better than we've ever had it.”
In recent weeks we have heard similar sentiments from members of the super-rich in France and Germany. What we have not heard is any whisper from this country. And please don’t try to tell me that we are more heavily taxed than the French or the Germans, because it isn’t true. So, why not?
Indeed we have a letter from 20 “economists”urging the abolition of the 50% tax rate, the evidence for this being…er, they don’t like it and they are all in line to pay it themselves. This grotesque piece of special pleading is then presented by the media as if it were a serious contribution to debate. The projection is that it will raise a not inconsiderable £12.6bn over five years, but, much more importantly, it asks for a contribution from the rich.
As Oliver Wendell Holmes said, “Taxes are the price we pay for a civilised society.” The alternative is the rich living on gated and guarded estates and the poor, excluded from the benefits of society, becoming increasingly lawless. That couldn’t happen here, could it?