Friday, 13 November 2009

Taxing the super-rich is a no-brainer

By Kevin McVey
First published in The Morning Star, Thursday, 12 November, 2009

The German press reported the launch of a petition two weeks ago calling for extra taxes on the rich.

Nothing unusual about that. The idea of the rich paying their fair share of taxes has been one of the clarion calls of the left internationally for a generation.

But this petition wasn't launched by Die Linke, nor by the trade unions. The petition was launched by a group calling itself Vermoegende fur eine Vermoegensabgabe, which translates as "wealthy people in favour of a wealth tax."

According to the organisers, a 5 per cent wealth tax for two years on everyone in Germany with a personal fortune over 500,000 euros (£452,000) would raise more than 100 billion euros (£90bn).

The group says that the revenues should be earmarked for environmental protection, education, health care, welfare and other social services.

"The gap between the poor and the rich in Germany has widened during the past 15 years," explained one of the organisers.

The proposal bears a remarkable similarity to the proposal put forward by the Scottish Socialist Party during the recent European election campaign and in the Glasgow North East by-election.

The Scottish Socialist Party (SSP) has calculated that a one-off tax on every individual in the UK who holds liquid assets - ie wealth held in bank accounts, stocks, shares, bonds etc - worth over £1m would instantly generate up to £70bn.

This single measure would be enough to create and sustain 800,000 new jobs - a fiscal stimulus on a grand scale, which would rejuvenate local economies and generate billions of pounds in extra tax revenues.

Let's be clear. The crisis engulfing the world economy was caused by the greed, incompetence and recklessness of the private sector and the rich.

Yet with varying degrees of enthusiasm, all the mainstream parties are drawing plans for an onslaught against the public sector and the poor.

They have learned no lessons from the global economic meltdown, which has its roots in runaway economic inequality.

Higher taxes on the rich over the past 13 years of new Labour in power wouldn't have prevented an economic downswing. But it certainly would have curbed the wild excesses of casino capitalism.

For a decade and more, the rich amassed phenomenal wealth. This became the fuel powering the soaring speculative rocket, which has now fallen back to Earth like a burned-out stick.

In the past, even the most modest proposals for wealth redistribution provoked derision and hysteria from new Labour politicians.

To take a local example, when the SSP proposed replacing the council tax with a more equitable service tax based on income, the Scottish Labour Party issued a briefing paper saying that the policy would "lead to a haemorrhaging of wealth."

Haemorrhage? It sounds like a cruel joke now.

We only wanted the rich to donate a pint of blood. Instead they decided to slash their own arteries.

Incredibly, even after the greatest financial crash since 1929, the richest 1,000 people in Britain are still three times richer than they were on the day new Labour came to power. That's the state of play in Britain now according to the latest Sunday Times rich list.

Every one of these 1,000 people could go on another spending binge, each splashing out £1m every week for the next five years, and they would still have billions left to spare.

Slap some extra taxes on these people and they wouldn't even notice the difference. They might scream and squeal for a bit, but they won't be cutting back on spending at their local restaurant or corner shop.

Transfer that money to the millions who live on or near the breadline and they'll spend it.

It's simple economics - and in Germany even some millionaires have begun to work out that particular equation.

Kevin McVey was the SSP candidate in the Glasgow North East by-election.

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