Fairness taxes not wealth taxes

Fairness taxes not wealth taxes

4 minute read.

 

Of the many things I remember from the Blair years, there is one  that is emblazoned on my mind. And it is not what you are thinking. Tony Blair made it crystal clear that the first five years in government passes in the blink of an eye. Therefore an incoming government needs to show that its long term goals are equally urgent as its first steps.  

 As a director of public health working in the 90s to bridge the health gap  for the people of London’s East End, I know the Blair government acted swiftly. I recall, both Tony Blair and his then health secretary arrived almost instantly in the East End to reiterate their commitment to reducing inequalities. They swiftly commissioned an independent review of health inequality and this resulted in a cross government strategy which achieved its stated numerical goals by 2010/11. No messing.

Whilst we haven’t yet seen what will be in the Labour manifesto, what we see at present is how a Starmer government will deal with the astronomically high waiting lists while locked into an impossible fiscal corner. There are words about wider prevention inside the NHS that will help, but how and when will they be brought to life?

When I had a go at using the Institute for Fiscal Studies’ (IFS) fun  tool Be the Chancellor (https://ifs.org.uk/election-2024/be-chancellor) I spent an extra £158bn across government departments on what I have called “deep” prevention in my latest book  Against the Flow (https://troubador.co.uk/author/bobbie-jacobson) . It raised about £23bn in additional taxes listed by the IFS. So it added about £130bn debt by 2029/30. I doubt that chasing income tax dodgers would touch much of this.  


There are surely solutions to be found within and beyond the IFS box. The Wealth Commission led by international economic experts (https://www.ukwealth.tax/) has estimated that my debt would be more than paid off by a 1% annual levy on the UK’s millionaires.  I’m no economist, but reforming the tax system seems overripe as has been suggested by Colm Murphy and Patrick Diamond this week: Why Labour must adopt radical new tax policies (https://www.theguardian.com/commentisfree/article/2024/jun/01/why-labour-must-adopt-a-radical-new-taxes-including-on-wealth-and-capital-gains) . Among their sensible proposals is the obvious and long overdue updating of property values that could raise real resources for strapped local authorities. Given the electoral promises made by both major parties, new proposals need to avoid raising taxes for working people (ie income tax, NI and VAT). No need to be electorally frightened by taxing wealth, just think of them as fairness taxes that will affect, but not hurt, a tiny proportion of the population. For example, if the water companies pollute our rivers and seas, then dock shareholders’ profits to pay for the damage, not users. Could there be a new tax that could build on the windfall taxation principle in which major shareholders could make a contribution to fairness above an agreed profit threshold? A transparent commission on tax reform, not run exclusively by economists, would be a real step forward. It could create clear pink water between the two major parties whilst guarding fiscal propriety.

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