Should we laud the rich as tax heroes?

Boris Johnson, aka ‘top cornflake’, argued in 2013, that the top 1% contributes almost 30% of income tax and that top 0.01% contributes 14% of all taxation. However, as income tax is 26% of all government revenue (NI raises 18% and VAT raises 17%) this equates to 8% of all government revenues. Therefore his claim that top 0.01% contributes to 14% of all taxation is just wrong. The top 1% actually contribute 8% of all government revenues.

In making this claim he is arguing we should thank the rich for their contribution:

“I proposed that we should fete them and decorate them and inaugurate a new class of tax hero, with automatic knighthoods for the top ten per cent”. Of course this is jest and rhetoric; surely he cannot be serious and muses on this as bit of lefty baiting?

He creates a value system, which results in lauding the rich for taking more than they ever have done, by trying to claim they are contributors beyond calling enough to warrant knighthoods. I don’t think giving 8% of all revenue is anything to be proud of, especially when the gap between the 99% and the 1% is so large. This is much, much worse if we focus on the 0.1%. The disparity within the 1% is breath-taking.

I would invert that value system and call it a self-serving  justification for the biggest income and wealth grab we have seen since Edwardian times.

This is mere number crunching, the actuality is more relevant. People’s lives are affected not by overall tax rates quoted by Johnson but by their absolute incomes and thus the % paid as a proportion of that income. If we focus on this, then we find that the poorest 20% pay 36.6% of their income in taxes, just a tad more than the top 1% who pay, 35.5% (Dorling 2014 p162). Tax heroes? How heroic is it to pay about the same proportion of your income as the bottom 20% do, when what you have left is riches beyond the dreams of avarice?

You might want to consider that 36% of a low wage leaves much less than 35% of a very high wage.  Food, petrol, utilities, clothes still costs the same amount whether you are rich or poor. If I earn £10,000,000 pounds pa and am taxed at 80% that leaves a ‘mere’ £2,000,000 to live on. Poor me, some tax hero!

See: http://www.thersa.org/events/audio-and-past-events/2014/inequality-and-the-1

Dorling D (2014) Inequality and the 1%. Verso. London

0 comments:

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar