Friday 1 May 2015

Politicians should leave the wealthy alone - they already contribute more than their fair share?

This week the Sunday Times published its annual rich list for the 2015. It's something I always read mainly out of curiosity but this year particularly with an election this month, the list had greater significance.

Since the Conservative/Lib Dem coalition came into power in 2010 the country has experience significant spending cuts in an effort to reduce the budget deficit, for many people the last 5 years has been tough we stagnant wages and a cut in benefits. At the same time Britain or should we say London is home to some of the world's super rich. People who have not really been affected by the governments cuts and the age of austerity.

With this in mind, I attended last week an event by the Spectator Magazine where a Panel discussed whether or not the super rich should be taxed more or whether they're already paying their fair share.

I decided to go based on the quality of the line up. Chairing the discussion was journalist and presenter of the Sunday Politics show, Andrew Neil. In support of the motion, was Spectator editor Fraser Nelson. Journalist, Toby Young and Conservative MP William Cash.

Opposing the motion and on the left of the political spectrum, were Guardian columnist and author Owen Jones, food blogger and campaigner Jack Monroe and Green MEP for the South West, Molly Scott Cato.

Each panel member was given 10 minutes to talk to the audience and put forward their case on why they believed the wealthy should pay more in taxes or not. Being the political geek that I am, I enjoyed listening to the arguments and the questions at the end from the audience.

My natural default position is that the rich should clearly pay more of their income in taxes and in the pre-debate vote which took place, I voted that the rich should pay more.

The three speakers in favour of leaving the rich alone argued that the wealthiest already contribute a significant amount in income tax. The best-paid 1 per cent pay 25 per cent of the income tax. When put in those terms you start thinking that the rich already pay more than their fair share, but what about VAT.

The poorest in society still pay more in taxes from their overall incomes through VAT then the wealthiest in society. I don't begrudge people who through their own hard work and effort become multi millionaires but I agreed with Owen Jones' view, when he said that the rich can still pay a bit more.

When it comes to taxing the rich, I accept that you have to be pragmatic about it. Tax them too high and some will leave the country and the revenues received actually decrease as was seen in France when President Holland increased the rate of tax to 75% for the wealthiest before having to make a U-turn.

The real issue is when you have a super rich elite that is growing ever richer while people on middle and lower incomes are increasingly struggling - this is where you start to have problems. It's not about class envy it'a about questioning whether that economic model is fair and sustainable.

We keep getting told that the super rich are vital to our economy and to the wealth of the country, if we tax them too much they will leave. But for me, everyone working in this country are contributing to the wealth of the nation, regardless of whether they're earning 10,000 a year or £1 million a year.

I'm against rising inequality and think societies face more problems if the gap between the richest and poorest is too big. Over the last 30 - 35 years this neo-Liberal economic consensus has lead directly to this gap widening.

As I mentioned in my last blog, those in favour of the status quo face a big problem in trying to convince people who are turning to populist left wing parties that the present system still work for them. You can't keep championing the current system of lower taxes for the rich when the majority of ordinary people see no gain in their own living standards.

The rich can increase their wealth, I just don't believe the levels of growth in their incomes should outstrip the majority of people by such huge amounts. Sadly this is the situation we've got. Supporters of free markets, capitalism and wealth creators can argue all they like in favour of the super rich, this situation will lead to serious problems in the future.

At the end of last week's debate, the audience got to vote again on the motion put forward - the final vote was in favour, although I decided I was undecided.

I don't know why voted that way when I still feel in my heart that the rich should pay more because they can afford to and because in the long term it's better for all of us.

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