I’ve nothing against rich people in principle. I know several – some extremely rich. I like some of them; I dislike others. I admire some for the generosity and imagination with which they have made use of their wealth; I despise others for their mean-mindedness and obsession with possession, and I have a great deal against those rich people who feel they have a human right to pay no tax, if they can get away with it by hiding their money off-shore.
Nobody likes paying taxes, but most thinking people acknowledge that the state must have funds to pay for common services – infrastructure, health, education, arts & leisure – as well as to provide for an acceptable minimum standard of living for its poorest members.
The libertarian tendency that flourishes under Mr Trump in the USA espouses the view that, if the money’s there to be had, whoever gets up early enough, or is sharp enough, or persuasive or brutal enough has the right to take it and hang on to as much of it as they can get; and the unsavvy middle-order people – ‘the little people’ – manual workers and generally disadvantaged can just rub along as best they can; if they can’t, it’s their own feckless fault.
While the day-to-day, practical standards of living enjoyed by an individual of, say, £100m net worth doesn’t differ much from that of an individual of £10bn net worth, the richer of the two is in a position to purchase far more influence in the shaping of the laws that affect the creation and the retention of their wealth, always to the detriment of services available to the less rich 99% of the population. The ability to chuck millions of pounds at political parties that support their position increases the power of their vote several hundredfold.
It shouldn’t come as a surprise that nearly all the nations occupying the highest rankings in the World Happiness Scale are also those with the most equitable tax regimes. This suggests that even the richest are content with handing the state a higher proportion of their income if they can see that all of their fellow nationals have access to adequate food and housing. They recognise the benefits of reducing tension between rich and poor, and not fomenting the envy, bitter resentment and larceny that is still prevalent in highly economically imbalanced societies like Brazil or South Africa. They are also behaving as sophisticated evolving human beings, in seeking to support the disadvantaged and value them as members of the human race.
While the 98% tax levied on unearned income that was applied in Britain in the latter half of the 1970s was draconian, unrealistic and ultimately impractical as a huge disincentive to investment in UK industry and commerce, most reasonable citizens (although there will always be a hyper-greedy few) will accept sensible gradations of tax contribution, with income tax becoming payable only when income has reached the national median.
Rich people might be less disinclined to be taxed if major tax payers who are individually contributing many times more than the average citizen were to have this contribution recognised in the bestowing of public honours, on reaching significant markers in their tax payment history – Knight of the Exchequer, Baron of Her Majesty’s Treasury, perhaps, for contributions of £50m and £100m respectively.
While by no means all big tax payers would seek this kind of recognition, it would be just and transparent if details of individual contributions to HM Treasury through taxes paid were made public.
An additional method of extracting tax from those traditionally reluctant to pay their correct income tax is one that has been previously proposed on these pages: a luxury goods VAT, applied to goods whose principal purpose to the purchaser is to demonstrate the scale of their own wealth – a fiscal status symbol, like those hideous new Rolls Royces favoured by Saudi princes and Russian oligarchs. Might they even consider that VAT of 100% would be worth paying for the enhanced perceived value of the car?