Tax the rich!

Submitted by AWL on 14 April, 2015 - 5:28 Author: Editorial

The Tories, their arrogance boosted by having got through five years of cuts and wage squeeze and still having some chance of re-election, promise a cut in inheritance tax.

They have already cut corporation tax and the top rate of income tax.

The Labour leadership promises bitty taxes on the rich here and there, but nothing large-scale.

On 13 April Shadow Chancellor Ed Balls publicly rebuked the right-wing leader of the Scottish Labour Party, Jim Murphy, for saying there will be no new cuts under a Labour government.

Murphy was striving to make ground against the Scottish National Party, which strikes an anti-cuts pose despite making large cuts in Scotland. But Balls said Labour would make cuts.

Shadow business minister Chuka Umunna went further: "There will be the need for further consolidation and cuts throughout the rest of the parliament".

At the Labour Party’s National Policy Forum in July 2014, all the big unions joined with the Labour leaders to vote down a move from constituency activists to commit a Labour government to refusing cuts.

Both to stop the Tories winning on 7 May, and to make a new Labour government other than a disaster, the unions need to start standing up for their members, their own policies, and the working class. They should demand that Labour tax the rich and reverse social cuts.

The top one thousand people alone in the UK have individual wealth totalling £519 billion. If those top thousand were reduced to £1 million each (to routine luxury, rather than ultra-riches) then that would yield £518 billion.

£97.4 billion dividends were paid out in 2014 to shareholders of big business, not for any work, but just for being rich enough to own shares.

As for the banks, HSBC alone made profits of £12 billion in 2014, and that was a drop from 2013, worse than expected. Bonuses in finance and insurance totalled £14 billion last year, down from previous years because some of what used to be paid in bonuses has been renamed "allowances".

The chief executives of just the top 100 firms (FTSE 100) had paid themselves £3.3 million each (median) in the last year's figures available as of October 2014.

The top one per cent of adults in the UK pocket £130 billion a year, or an average of £260,000 each. If they were reduced to being modestly well-off on £30,000 a year each, that would yield £115 billion a year for social spending.

The 2010-15 cuts in local services, health, public service workers' real pay, education, and benefits in Britain, have been huge in their social impact. But small in comparison to the wealth of the rich: about £18 billion from benefits, £16 billion from education and local services, over five years.

In arithmetic, to reverse the cuts would need only modest taxation of the rich. In real politics, to get that taxation will need a great working-class mobilisation, willing to press on through the claims that tax would be "crippling business" and making "talent" flee.

That mobilisation will not stop at just taxing, but will take control of the banks and the big corporations, to run them under public ownership and democratic and workers' control, for social aims.

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