Edinburgh Fringe 2015
Convincing a sceptical British public to give up any more of their hard earned loot to their political representatives is a tall order. Simplifying the UK’s labyrinthine tax regime might be a good place to start though.
Polly Toynbee and David Walker have been banging on about the need for us all to pay more tax for some years now. Their well-researched and received tome Unjust Rewards, published just before the financial crisis saw the banking sector implode in 2008, exposed the growing inequality between the haves and the have nots, the ignorance of the former about the lives of the latter and the fact that we, in the UK, want Scandinavian standards of public services but are only prepared to pay Cayman Islands rates of tax to fund them.
A small, but intellectually curious, audience was on hand to hear this lunch-time discussion in the Assembly’s cavernous Music Room, with Toynbee and Walker choosing (rather curiously given their deep knowledge of the subject matter) to rely on reading from scripts, occasionally adding to their remarks with some quite detailed but nonetheless informative slides.
It was an enlightening, if slightly discursive lecture, reminding us that if you have the rights of representation, as we in the UK enjoy to a considerable degree, then you must expect to pay something in the form of taxation. Interesting, then, that income tax has remained a temporary measure since it was first introduced by William Pitt the Younger in 1798 to pay for weapons to bombard the French. The tax “on-off” switch was flicked a number of times in the next fifty years before successive Prime Ministers found the source of income too useful to do without and we’ve been stuck with it ever since.
It’s easy to see and support the argument indirect taxation disproportionately penalises those on lower incomes and that direct taxation of income is a vital element in wealth redistribution, ensuring that those who can’t fend for themselves are provided for to maintain what we, and many other so-called developed economies regard as a civilised society. The bone of contention has always been how progressive income tax should be; those on the left of our political spectrum have traditionally favoured more progression than those on the right.
And, the speakers argued, there is a growing body of evidence as to what a civilised society looks like: Germany and Denmark are prime examples and each currently spend around 42% of GDP on public services and welfare support. Public spending should fall as a percentage of GDP when the economy is booming but will need to rise when it isn’t, casting doubt, therefore, on the wisdom of the long-term austerity measures that have been adopted or been forced on a number of European economies throughout much of the last decade. To set this into context, the UK Government’s is targeting around 36% by 2020. What, asks Toynbee, does this mean for UK society?
So far so good. But then our speakers rather failed to press home their argument, other than by suggesting that National Insurance (an income tax in all ways but name) be folded into Income Tax. Ideas were not forthcoming in terms of the degree of progression required in order to begin redressing the increasingly skewed income and wealth distribution evident in the UK.
A few pot-shots at those damned for legitimately managing their tax affairs and a brief foray into some fairy-tale Corbynomics meant that a potentially very invigorating discussion ended with a something of whimper rather than the bang perhaps some of the audience were expecting, although much credit is due to Toynbee and Walker for trying to raise awareness of this growing societal issue.
But it’s going to take a bit more than their efforts to convince a sceptical British public to give up any more of their hard earned loot to their political representatives. Simplifying the UK’s labyrinthine tax regime might be a good place to start though.