Tax the rich!

Britain is blessed with a lorra lorra very clever people, don’t ya think? They have the answer – one answer – to all our nation’s problems; it’s not ‘42’ but it’s equally as daft. If the problem is how to save the NHS, then tax the rich. Build more affordable homes? Tax the rich. Achieve net-zero? Tax the rich. Stop all sewage pollution? Tax the rich. Improve educational standards? Tax the rich. You get the picture.

These wealth-tax warriors – it’s what keyboard warriors do on their day off – think taxing the rich is the obvious solution, because all the nation’s if not the world’s problems are squarely the fault of the rich. Apparently, the rich take all the wealth for themselves and deny others a fair share. Their sole raison d’être is to profiteer. They’re leeches. They fiddle the books. Break the law. Bribe whomever. Cut and run. Bash Bats. Nuke Newts. Horrible people, the rich; a wealth tax is justified on moral as well as economic grounds. 

Sometimes, wealth-tax whingers focus their disdain on the so-called fundamental villains of the piece: colonialism and white privilege. It appears that there were no problems before colonialism (even though it was a ‘thing’ before Jesus was a twinkle in Joseph’s eye), economics worked fine before capitalism, and all the bad, greedy people in the world are white western Europeans. All other ethnicities and nationalities (and income-brackets) are as pure as the driven snow … erm, snow is white so not the best cliché under the circumstances. 

Moving on, the reason why politicians don’t tax the rich more is because, it’s claimed, a) they’re rich themselves or b) they want to keep on the right side of the rich who will return favours and help them become rich or even richer.

Wealth-tax wallies say that if we tax the rich, we’ll reach Nirvana. Nah! More like Narnia or Neverland, two fantasy destinations for lazy regurgitators of convenient baseless tropes. In order to know who, what and how much to tax, they really ought to ask and answer the following questions:

1. At what income level and asset value does aspiration become greed? 

2. At what income level and asset value is someone deemed to be wealthy?

3. What amount of wealth is deemed to be ‘excessive’?

4. Including VAT, what proportion of taxes is already paid by the rich?

5. How much more should the rich be taxed in order to pay for Rachel-from-accounts’ unfunded spending pledges?

6. What percentage of net personal wealth in the UK is owned by the top 1%, and how does this compare to 1900, 1980 and 1990 (after ten years of Maggie as PM)?

7. How much money and time (because time is money) do the rich give to good causes, which is in effect a voluntary tax?

8. Which countries have tried and repealed wealth taxes? Which countries still have them and how are they (not) working?

9. Is the overall fiscal goal to a) generate additional meaningful income for government, b) reduce the wealth of the top lot without penalising the rest or c) perfect political posturing?

10. Should the UK introduce a wealth tax?

Together, the correct answers to 1–8 illustrate that the rich already pay a disproportionately high amount of tax, that wealth is more evenly distributed than it ever has been, and that wealth taxes don’t work. Therefore, if your answer to 9 is a) and/or b), then the answer to 10 should be ‘no’. If your answer to 9 is c) then you obviously belong in the Labour Cabinet.

Number 10 is a trick question whatever you think about 1-9, because it would be daft – I mean really braindead – to advocate a wealth tax in isolation, bereft of a wider context. It would be a bit like withdrawing – and reinstating – pensioners’ winter fuel allowance without also considering the whole issue of pensions, taxes and benefits for the elderly. Another example of braindead is to massively increase the tax burden on farmers without first ensuring that government’s contribution to farm income is fit for purpose. The braindead-cap fits Rachel from accounts so snugly that she should get Lord Alli to buy her one.

There is another question, by the way – multipart. We established in the second paragraph of this blog that rich people are said to be horrible. But:

11. Are all rich people horrible? Are rich people horrible because they’re rich, or rich because they’re horrible? Do different sources of wealth determine different extents of horribleness (I happen to like that word)? Are non-rich people horrible and are they horrible because they’re non-rich and want to be rich, or are they non-rich because they’re horrible and no one wants to facilitate their path to riches? If there are any non-horrible rich people, is it morally justifiable for their wealth to be super-taxed in order to make horrible non-rich people a little less non-rich?

My personal view is that wealth, or lack of, is no predeterminate or consequence of horribleness. One specific criticism by the wealth-tax whiners, that rich people are profiteers, makes me snort. If an enterprise doesn’t make a profit, it goes bust and jobs for the non-rich evaporate. If an enterprise doesn’t maximise profits when it can, then it doesn’t have sufficient reserves to see it through the bad times and will again go bust. If an enterprise doesn’t make as much profit as other enterprises, then it can’t afford to compete in the labour market and attract the most capable workforce, so is more likely to go bust than more profitable ones.

Gordon Gekko was spot on when he said Greed is Good. Without a certain degree of greed, or aspiration, riches aren’t pursued, fewer jobs on decent salaries aren’t created for the non-rich, and paid-taxes (in all guises) would be a helluva lot less than they are now. 

With all that in mind, we’ll end with another question:

12. Is the reason for advocating a wealth tax as a result of a) ignorance, b) envy or c) political expediency?

If you thought the answer was ‘economics’, then ask Lord Alli to buy you a braindead-cap.