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Obama imposing $300bn levy on banks & hyper-rich: how about UK?

It is remarkable tBarack_Obama_Hope_posterhat in the citadel of capitalism Obama has just unveiled a plan to impose a levy on the biggest banks and on the wealthiest families that is expected to raise $300bn, yet in Europe any such idea is taboo. In the US the new tax is being crafted to affect only the richest 1%, with 80% of the impact falling on the richest 0.1%. The levy will also set a fee of 0.07%on the liabilities of a hundred financial institutions with assets of $50bn, which would have the added benefit of deterring banks from taking on excessive leverage as well as reducing the risk of defaults. Why isn’t such a skilfully targeted measure being considered here?

True, Labour is proposing a bankers’ bonus tax (to raise £2bn), a mansion tax, and the restoration of the 50% rate of income tax, but these are not a game changer on the same level. Yet it would be highly popular – those responsible for the crash being required for the first time to make a contribution to redressing it, as well as heading off further draconian cuts on the poorest when the Joseph Rowntree Foundation reported yesterday that 40% of households with children now live below the minimum income standard of living.

At the other end of the scale the latest ONS official figures for 2014-5 show that there are 5,000 UK taxpayers commanding an income of £23bn, an annual average of £4,600,000 each or £83,635 per week. FTSE-100 directors’ pay soared by 21% last year and chief executives’ pay is now 120 times that of the average full-time employee (compared with 47 times more in 2000). It has also just been reported that landlords made £177bn from the rise in house prices in the 5 years after the crash.

Quite apart from offering a source of funds for much-needed public investment in industry, jobs and growth now that the Osborne ‘recovery’ is fading, it would begin the very necessary task of rebalancing an economy extremely distorted between rich and poor, north and south, finance and manufacturing, and would begin to take the first steps in redressing an inequality now wildly out of control.

Such redistribution from the ultra-rich to fund real jobs and higher incomes for workers and the ‘squeezed middle’ would undoubtedly be popular, just as the Syriza party targeting the Greek financial oligarchy if they win the election on 25 January has proved very popular there after 6 years of grinding austerity. A little bravery on the Left here in the UK would similarly send out exactly the right signals to galvanise the enthusiasm so urgently needed now.

2 Comments

  1. Barry Ewart says:

    Absolutely! Plus more democratic public ownership – mail, rail, public utilities, some banks, some airlines, pharmaceutical industry and explore taxing large landowners & 5% EC Financial Transaction Tax (would bring in £1.75tr to address EC austerity). It is the labour of the billions of working people that creates the wealth and makes societies work so we should not be afraid of getting our share back. Yours in solidarity!

    1. Robert says:

      Be nice but do you think labour have the ideology to do this, sadly I suspect Miliband tripe about trident will only last as long as he can get some votes . So the Royal mail is now gone the Post office will not be long and then sadly we are going to have a fractured railways, Wales is to bring the railways back so is Scotland will England nope.

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