1st December 2005

Cotswold MP Geoffrey Clifton-Brown's bill to exempt those people earning under £10,000 from paying tax is a welcomed move (Citizen 30/11/05) but we need to go much further: currently the rich pay less tax than the poor.

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 to a company registered in Bermuda for tax purposes!

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.

Greens want 60% on earnings over £100,000 like in Denmark and under Thatcher (ii) plus we need to abolish tax havens for the super-rich (iii). 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.

Philip Booth, Press Officer, Gloucestershire Green Party.


Notes:

(i) 37.8% as opposed to 35.1%
(ii) The Fabian Commission on Taxation under Lord Plant proposed an increase in the level of taxation on incomes over £100,000 to 50 per cent and noted that this would yield additional revenues of £2.9 billion a year. If the rate were increased to 60 per cent, the current highest European rate (egalitarian Denmark), then the yield would be twice this and a tax of 50 per cent on incomes between £50,000 and £100,000 would yield a good deal more. More information re Green party's stance on tax:
http://www.greenparty.org.uk/articles/162
(iii) See Glos Green party website for comments re tax havens. New Labour has been very gentle in relation to tax avoidance on all fronts. It could have adopted a general anti-avoidance provision, such as that which operates in Australia, where accountants have to prove that financial schemes are not just designed to reduce tax but have a genuine business purpose. Instead it has gone for a much weaker approach which is based on self reporting of schemes. The Australian model puts the burden of proof on the scheme. New Labour's proposals leave the burden of proof with the Government - a much weaker arrangement. In a letter to the Guardian, Prof Prem Sikka Department of accounting, University of Essex commented: "Moore Stephens, tax partner says: "No matter what legislation is in place, the accountants and lawyers will find a way around it. Rules are rules, but rules are meant to be broken". This shows the real morals of the tax avoidance industry. One wonders what kind of advice is given to those involved in money laundering, creative accounting or cheating on benefits. No wonder Britain is losing between £25bn-£85bn each year in tax avoidance." (20th March 2004)