Across the world, students, concerned citizens, and even businessmen are occupying financial centers to protest against “corporate greed,” an umbrella-term which covers a multitude of capitalist sins.
Recent announcements in Britain that the Conservatives – behind Chancellor George Osborne – will cut the 50 pence tax rate on those who earn 150,000 pounds ($237,330) will only strengthen those protestors’ resolve. If the Tories’ remove the tax, they should introduce other progressive measures like the “mansion” tax. Otherwise our government could be accused of class warfare – against the 99%.
Portrayed as economic good sense, cutting the tax will symbolically – and economically – underpin the injustices and hypocrisies of Tory economic policy. But in many countries around the world, these same policies are being introduced. The particulars might be different in the U.S., but the story’s the same.
The 50p tax was introduced by Labour government in 2009 with Alistair Darling as chancellor, as a direct income tax taking “50 pence in the pound” – 50% – from those who earn above 150,000 pounds. The tax effects around 310,000 people, the top 3% of British society. In this case, we are the 97%.
Last month, a group of economists wrote a letter to the Financial Times arguing it impeded growth. Among them, former CIA analyst and World Bank economist, DeAnne Julius; hedge fund manager and member of the Bank of England’s Monetary Policy Committee, Sushil Wadhwani; and Cambridge University economist (and Marxist), Bob Rowthorn.
Meanwhile the campaign is run by PR firm Westbourne, a company allegedly funded by companies that would be affected by the 50p rate. A look at Westbourne’s staff CVs certainly suggests particular loyalties – the Conservative Party, Conservative Friends of Israel, and the Centre for Social Cohesion, a “right-leaning” think-tank.
Most importantly, a recent YouGov poll shows that 67% British voters want the 50p tax to stay, as opposed to 20% who don’t. It is electorally unpopular to cut the tax.
Do the Tories really think that freeing up the incomes of the richest in society will benefit those at the bottom? Trickle-down economic theory is flawed, and has been proven so, not least by the Great Recession. According to a truly ridiculous blog post by the UK Taxpayers’ Alliance, the 50p tax rate is “immoral” – expect for its disadvantaging poor people! It is a whimsical attempt at identifying with the common man through capitalism – as if the top 3% of Britain regularly support its working-class trade, business, and industry.
If the 50p tax actually incentivizes tax evasion, we should be policing it more rigorously, not pandering to it. Outside of the Tory dream-world of social security benefit cheats and the lazy, drunken working-class, benefit fraud costs Britain 1 billion pounds a year – a figure usually based on need, not greed, for the 23% of the UK population living below the poverty line.
Compare that to the 7 billion pounds annual cost of tax evasion, a figure definitely based on greed, corporate or otherwise. Our Department of Work and Pensions celebrates the 56,493 “benefit cheats” caught last year. But how many people were arrested in Monaco, Lichtenstein, Switzerland, or Panama?
Britain is in its first year of a coalition government ostensibly led by Prime Minister David Cameron’s neo-Thatcherite Conservative Party. As a direct result of their social and economic policies, we have seen unemployment rise to 2.57 million (its highest in 17 years) and 250,000 public sector jobs gone, while Job center closures decrease many peoples’ chances of re-employment. Further, the National Health Service is facing unjustified privatization, and wages are rising half as quickly as inflation. In the face of this dire economic situation, cutting the 50p tax rate would amount to something close to class warfare, a recurrent defense and support for the rich, while the poor are attacked.
But it is young people – us – that suffer most, commentators say. British youth unemployment is 21.3%, more than double the national (adult) figure. In some countries, like Spain, youth unemployment is closer to 50%.
The increasingly grim social realities racked up against people worldwide – young and old – are caused by a capitalism more militant and unthinking in its crises.
Photo Credit: adrian_kenyon