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Make super-rich Brits pay their fair (very large) share

It’s remarkable that the hyper-rich in France (Bettencourt and others) and in the US (Warren Buffett and others) are now calling at a time of austerity that they should be taxed more. Not a peep however out of the hyper-rich in Britain. Yet they, more than any of such wealth anywhere else in the world (with the possible exception of America), have good grounds to contribute increased taxation dues for three very strong reasons.

First, during a period when average UK real incomes have stagnated since 2003, the wealth of the wealthiest 1,000 Britons (just 1,000!) soared by £297bn between 1997-2010 according to the Sunday Times Rich List 2011; each one of them therefore increased their wealth on average by just under £300,000,000. Second, if the increase in their wealth were taxed at a modest 20%, it would yield £60bn, enough to pay off nearly half Britain’s budget deficit – for which many of them were directly responsible. Third, they are the prime offenders responsible for the criminal activity of tax evasion now running at £70bn a year in the UK.

The super-rich escape because the reactionary Establishment consensus in Britain is very strong, more so than in any other European country. In France, Sarkozy and Carla Bruni swan around socially with the rich elite, but because of discontent at austerity are now beginning to target the rich. In Britain it’s the reverse: Osborne, despite being aware that letting the super-rich off the hook is unpopular (hence his anxiety to promote his Swiss tax deal as the end for tax evasion, which is ludicrous – the opposite of the truth since it’s opening up a new haven for tax avoiders), is now planning to abolish the modest 50% tax rate on very high earners over £150,000.

But it’s not just money. The super-rich in Britain regard themselves as above the law, and are allowed to get away with it. In the US top corporate offenders are sent to prison (e.g. WorldCom chief Bernard Ebbers and Enron accounting officer Richard Causey), and a slew of prosecutions are now being advanced against Goldman Sachs over the misleading of investors before the financial crash. In the UK not a single banker has been prosecuted and sent to prison for similar offences, whilst the biggest offender of all, Fred Goodwin, waltzes away with his pension intact at £700,000 a year.

The force of this Establishment culture has been demonstrated again in the reaction to the riots. Though the ultra-rich have penalised the country out of billions, it is their Tory allies in Parliament (plus a vengeful Tory press) who have transferred the rage towards an under-class whose offences, utterly wrong though they were, don’t even bear comparison with the recklessness, folly and criminal negligence and greed of the power elite.

Breaking this deeply reactionary conservative Establishment grip, which enforces austerity on 95% of the population to preserve the luxury life-styles of the ultra-rich, is a – no, the – prime task for the Labour Party in transforming Britain.

2 Comments

  1. Forlornehope says:

    And just how do you propose to make them stay and pay these taxes? John Lennon didn’t just move to New York because he liked the “scene”. He got his comeuppance but unfortunately there is no way we can guarantee that for all the top earners who will bugger off just as they did in the 50s, 60s and 70s. You can have the thrill of taxing the rich to the hilt or you can get their money; you cannot do both. I’d like to see how long socialist millionaires like Rowling and Sugar hang around once you get back to 90% tax rates.

    1. Jon Lansman says:

      I don’t think anyone has suggested a return to an effective 98% rate of tax! A 60% top rate is as far as I’d go. But I’d want top earners to actually pay that rate. On income and capital gains. No tax havens. No loopholes. No fiddling dividend payments to non-dom spouses. No sell-out deals with Swiss banks. Everyone pays, however much they can afford to pay their tax advisors.

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