Monday, 12 March 2012

Taxation of the Wealthy

Taxing the Wealthy

I am shocked that anyone should talk of repealing the 50% tax bracket for those earning more than £150,000 per annum. Especially at a time when the national debt is enormous and growing. There will always be a gap between the average income of the top 10% of the population, and that of the bottom 10%. But I am shocked that it is rising in our 21st century liberal democracy. In Britain, that ratio has risen from 8 to 12 in the last 30 years [1]. And, in the face of that, there is talk in government circles of abolishing the 50% tax bracket and inheritance tax!

Who on earth is voting these people into power? Of the 30 million tax payers in the UK only 0.126 million earn over £150,000 [2] So we look back at the Conservative Party manifesto and find that there is no talk of scrapping the 50% tax bracket. It is not the voters that matter in this case, but the cabinet; a bunch of rich kids looking after themselves. They point out that the revenue raised by the 50% tax rate in small (because the number affected is small). True! So its importance is not the revenue, but as a curb and a gesture; it places a slight restraint on the tendency of the rich to get ever richer, and it signals a gesture of intent — "this country does not favour a widening gap between rich and poor".

I take it as axiomatic that society works better when the relative wealth of rich versus poor is kept moderate. But perhaps there are some people brought up with other prejudices, who think that it is better that the assets of the country be mostly in the hands of the skilful, thrifty and wise, than in those of the foolish, thriftless and lazy. There are some (I suppose) who see it as a natural law that the rich get richer and the poor get poorer. They might think it foolish to combat the inevitable. So, let me try to defend my prejudices with objective arguments.

1.    1. We are interdependent. A rich factory owner needs workers for his factory and customers for his product.

2.   2. Beyond a certain point accumulated wealth becomes a dead asset. Money that is spent ends is someone's pocket and is then spent again, whereas money beyond what can be spent is money lost to the community.

3.   3. Wealth corrupts. The need to be nice to our neighbours is what keeps us civil; no such need, no such civility.

4.   4. Un-earned wealth is both undervalued and regarded as a birth-right. Necessity and need are the parents of creativity and energy.

5.    5. A wealthy person who sees his poor neighbours as servants, customers, objects, but not as human beings, is disgusting.

So, we must continually trim the wealth of the wealthy for the sake of all strata in society.

 

Occidentis, MORPETH

 

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