Monday, 16 August 2010

Its high time to tax the rich

David Cameron likes to refer to himself as middle class. We are all expected to aspire to be middle class but who are the middle classes? Although its true that class can't be simply equated to what people earn, earnings play an important factor in class. When Cameron calls himself middle class he is telling porkies. He is upper class - a class which seems to have been airbrushed out of history recently. He, and his wife, are wealthy. They come from upper class families. Cameron, himself, went to Eaton. But most middle class families can't afford to send their children to Eaton (take a look at the fees page).

According to Wikipedia, in the UK the middle class was defined in 1911 - 'T.H.C. Stevenson identified the middle class as that falling between the upper class and the working class. Included as belonging to the middle class are professionals, managers, and senior civil servants. The chief defining characteristic of membership middle class is possession of significant human capital'.

That still seems about right to me, but he could have added - 'a (relatively) significant amount of financial capital'. These days we are talking about 'senior' professionals who earn significant amounts of money, lets say more then £75,000. The problem is that many people who earn much less than this consider themselves to be middle class, teachers for example.

But what has all this got to do with taxing the rich? The point is that the illusion of being middle class, which is shared by many people who aren't middle class means that the upper class can avoid being taxed more because they claim to be middle class. If people identify with David Cameron, why would they want people like him to be taxed more? The simple fact is that many people have been bamboozled into believing that their interests are the same as those of Cameron, Osbourne and co. They are not. Let's not forget that the median income is about £23,000, that is what many people who think they are middle class earn.

We could have dealt with the deficit by increasing taxes and this is what the Green Party argued in its manifesto. There would still have to have been some cuts but these would be focused on government projects such as ID cards and trident. Along with increases in environmental taxes to protect the environment there should be increases on taxes for those who can afford it. For example a 50% tax rate on those earning over £100,000.

The simple fact is that taxes are too low in the UK to support the public services that the vast majority of us need. Now taxes are at about the level of 36% of GDP. In the Thatcher era they were over 40%. We have been sold the lie that we can have good public services and low taxes - we can't. Greg Philo, writing in the Guardian, has put forward a cogent argument for a one-off tax on the rich. A YouGov poll has shown that 74% support this. While this would help us to deal with the deficit, one-off is not good enough. In the longer term we still need to raise taxes to maintain a high standard of public services.

The Green Party policy of increasing taxes on the better off was the right response to tackling the deficit. The ConDems response, which has included reducing taxes on the better off, was the wrong approach and, predictably, will hit the poorest, low paid and 'middle classes' the hardest.

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