23 Apr 2007

Whiteshill swimming lessons lead to tirade on tax and inequality

Whiteshill Primary School children faced the loss of their swimming lessons due to lack of parents paying the voluntary donation of £2.90 per child per lesson. However after hearing of the loss an anonymous donor stepped in with £300 to make up the shortfall.

Standish Woods: the bluebells are looking stunning

The Dept for Education doesn't allow compulsory charges for items like swimming - and rightly so - but it is a poor situation when schools have to rely on such goodwill - the Dept for Ed should be funding such activities properly. To learn swimming should not be a privilege - yes some of those refusing to make a donation could probably pay but why not take it out of the tax system - now don't get me on that.... the gap between our richest and poorest workers widens evermore....

The poorest quintile of the UK population pay a greater proportion of their income as a whole in tax than the richest. This cannot be right. This is compounded by Britain's notably soft approach in dealings with companies which are domiciled in tax havens. Under Labour even the Inland Revenue itself transferred ownership of its buildings (incl the tax office in Stroud) to a company registered in Bermuda for tax purposes!

This very real increase in inequality is damaging social cohesion and distorts our whole economy. Directors' pay at Britain's top companies soars at more than seven times the rate of average pay. In contrast average earnings are rising just above inflation at 3.7%. Last year at Tesco, for example - which is third from the bottom of the low payers amongst big companies - its 368,000 staff get an average of £11,594, down from £12,713 a year ago yet its chief executive, Sir Terry Leahy, was paid more than £5m.

Labour have made some improvements, compared to the Tories, but they are very minimal. Our society is growing more unequal and now all three main parties shy away from increasing tax for those earning over £100,000. Meanwhile, our health service is being damaged by Government policy whilst New Labour continue to spend billions on its illegal war in Iraq.

Why are the main parties so scared to tax the rich? Where is the debate? Wealth inequality is rising and contributes to ill-health, crime and other social problems and even those who are materially better off are not always happier.

The Green Party has a different approach, believing top earners should contribute more in taxes and that for peace and community harmony we must reduce the current gross inequalities, both between the richest and poorest countries and the richest and poorest people within them. Greens want 60% on earnings over £100,000 like in Denmark and under Thatcher plus we need to abolish tax havens for the super-rich. These havens cost an estimated £25bn-£85 billion a year; up to 74 per cent of all the income tax the exchequer receives! Public services could really benefit from that!!

Greens also advocate a Citizens Income (CI) like in Alaska: an automatic, unconditional payment sufficient to cover basic needs to every individual, working or not with specialist benefits, such as disability and incapacity benefits paid on top. A CI is the most efficient way of circulating wealth, allowing maximum possible economic activity (within ecological limits), whilst eliminating unemployment and poverty traps.

There is a viable alternative to our current tax system, but we wont find it with the other main parties. Yes I said don't get me going on all that....it is great that Whiteshill children will be able to continue swimming but we shouldn't have to rely on such donations.

6 comments:

Dorothea said...

Hi Philip,

Firstly, I can't agree that anything has improved under New Labour - and I voted for them in 1997, and would regret it except that no other party ever gets in in in my constituency anyway.

As far as I'm aware, income inequality has massively worsened under NuL's crony capitalism, and the environment has worsened substantially with their huge building programme and purely instrumental attitude to species other than humans.

Secondly, one good reason for not taxing the rich more heavily is that the rich will then just leave the country, or offshore their assets even more, as Ian Angell points out in his frightening book "The New Barbarians", which predicts that all the people with good jobs and money will live in "smart zones" while the rest of us are crammed into decaying, corrupt hell-holes (remind you of anywhere already?)

However, I'm sure you're correct in saying that there are much fairer ways of organising the tax system. Raising the threshold level for paying any tax to, say £10,000 would be a good start.

BTW, sorry not to have responded to your comment on my blog, but being rubbish at computers, I got the comment management completely haywire and didn't see it for about a month...

Philip said...

I might have been a little generous to Labour about improvements - Under Labour ordinary taxpayers are paying more while the very rich have been protected.

However I disagree somewhat with your comment re the rich leaving - some do but Denmark successfully taxes wealthy people - indeed most of Europe does considerably better than us at taxing them - and few really want to leave the country. Furthermore the taxman is failing to collect around £20 billion each year in tax avoidance by big business.

Here is a comment from James Meek in The Guardian: "For the ultra-rich few, this country is now a virtual tax haven, which is why more and more princes, tycoons and oligarchs are making it their home."

There is a minimum wage, why not a maximum wage?

See interesting comment on Norway here:
http://www.guardian.co.uk/comment/story/0,,1604032,00.html

Dorothea said...

personally, I'm totally with you on the maximum wage idea. HOWEVER, can you imagine the howls of outrage, for example from the ghastly libertarian right and anarcho-capitalists who are so dominant in the blogosphere, demanding their "rights" to consume and pollute as much as they like.

As far as I recall, the income tax experiment was tried, when Thatcher reduced tax rates for the rich, a greater amount of revenue was collected, because of the return of those who were tax exiles under Wilson, Callaghan and their predecessors.

Income tax is inherently very hard to collect, due to sophisticated evasion and avoidance by the wealthiest.

Large sales taxes on luxury items like cars and all the other nonsense that the rich consume seem much preferable, being more transparent and enforceable, fairer - and greener too!

Re. the Guardian article, human nature is certainly complex and it's hard to separate nature from nurture. Whatever our true nature, it seems to me that in our modern world the very nastiest and greediest people have structured our society's psychological, social, economic and political framework over time such that it is now extremely hard to live a decent life free from exploitation and selfishness.

Philip said...

Certainly a max wage seems a long way off - even if set at £500,000 a year! But what I like about the idea is it starts to challenge those very views you talk about - we need to go back to accepting that inequality is a bad thing for all.

The other parties have retreated from even arguing that tax can be a good thing for society - it is time we heard more on all that. As Green party policy states: "EC710 Income Tax is the instrument by which all citizens who are able to are required to contribute a proportion of their labours to the running of public services. It is also, when combined with benefits payments, the primary way in which wealth can be redistributed in order to create a fairer society."

Indeed income tax is not the greatest system but it can be made to work better - European equivalents seem to bring in more and create fairer societies.

I do of course also agree re using eco taxes - plus of course personal tradeable carbon allowances and a Citizens Income which all make for a fairer and greener world.

Dorothea said...

Thankyou for your responses. Unfortunately, I haven't read the GP manifesto - could you clarify whether the Citizen's Income would be instead of or as well as a "benefit" system like the current one.

So-called benefits are a trap. I was benefit-dependent for many years, and it is extremely demoralising because you lose all initiative and self-reliance.

Benefits are very much like giving a man a fish, as the proverb goes. For real equality we need to learn how to fish again, and get away from the benefits trap by means of land redistribution so that everyone can be independent. (Molly at Gaian Economics had something about this not so long ago).

This would most likely also solve the "fat cat" problem too, as most of these ludicrous incomes are ultimately based on the fact that a minority of people control most of the land and resources, while the majority have no option but to be dependent on the madhouse of modern economics and McJobbery.

Philip said...

Thanks for latest comment: Clive Lord writes an OK overview here on Citizens Income:
http://www.greenparty.org.uk/comment/35

A Citizens' Income is basically a payment large enough to meet basic needs without means-testing or job-search requirements. While we would also advocate a Citizen's pension for pensioners, paid regardless of savings or NI contribution record, and rising in line with average earnings. There are huge benefits to this approach.

Molly - the Green party's Economics spokesperson - is now in Stroud so we benefit enormously from her knowledge - she is hoping to win a District Council seat next week - her blog is excellent:
http://gaianeconomics.blogspot.com/

Certainly her blog has much excellent stuff on the importance of land redistribution.