This Blog from 28 February 2011 had a lot of readers. It’s a
bit speculative, a bit of Devil’s Advocacy, but some of it I still think on the
right (ie, left) lines:
I just finished
reading The Spirit Level: Why Equality is Better for Everyone by
Richard Wilkinson and Kate Pickett.
Though most of
the more equal societies on their graphs have high-tax regimes (the
Scandinavian countries most obviously), one does not: Japan. It is more equal
before tax, not after tax, and in fact has a low tax regime.
This interests
me because I think there is a progressive / left-wing case for low tax
governments, at least in the UK.
The core
argument is simple and pragmatic: the chances of a high-taxing government in
the UK spending money cost-effectively are nil. The accumulated evidence is
everywhere and on this issue the (right-wing) Taxpayers' Alliance has
everything on its side. In the UK, everyone has a sound reason to begrudge
government its money. Governments have proved themselves over decades to be
self-indulgent and stupid wasters. High taxes have done nothing to promote
equality.
There is no
left-wing merit in taxing anyone, even the rich, in order to then waste their
money.
But if you
reduce taxes how do you then make a society more equal? Isn't redistribution of
income through taxation the only route to more equality?
No. You can
stop inequality at source. Here are some of the things you can do:
- You put a
cap on income differentials. It becomes illegal to pay anyone more than ten or
twenty times or forty times (take your pick - you are still an egalitarian at
forty times) the minimum wage. This is the core of a low tax - low inequality
world.
- You abolish
regressive taxes like VAT and instead impose selective consumption taxes on
luxury goods. Sumptuary laws of this kind existed under the Conservative
governments of the 1950s and they could be brought back.
- You reduce
income taxes all round and shift some of the (reduced) burden of taxation to
inheritance taxes to damp down the inequality which passes from generation to
generation. You aim to create a more level playing field.
- To
discourage the benefits scrounging culture which post-1970s UK governments have
fostered, you re-emphasise the original notion that benefits are funded from
insurance-based schemes. Equality cuts both ways: the richer should pay their fair
share and the poorer should be expected to contribute not scrounge.
- You deny
charitable status (and its tax breaks) to public schools; possibly, you close
them down.
Along these
lines, you would be aiming to get the overall burden of taxation down to around
20% (a favoured right-wing figure) and the level of social equality up to
levels not known since World War Two.
Of course, a
left-wing government would be closing down different expenditure areas to a
right-wing one. That would be the area of political difference.
Yes?
© Trevor Pateman 2011 and
2019
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