I submitted the following to an ongoing review that promises not to be “top down”.
What plans can we adopt to straighten out the economy of the UK and eliminate the deficit? It can be done in one Parliament. Here’s how.
The first way to raise some cash is to make landowners pay their way. The rest of us do. It’s called Council Tax. We pay £10 billion a year whilst the richest landowners actually make money from their land via tax breaks and subsidies. Examples: the Duke of Westminster received £799,000 over 2 years from the Treasury in subsidies. The Prince of Wales has an institutional estate – the Duchy of Cornwall – of 141,000 acres; this includes freehold on much of Kensington area of London worth an estimated £500 million. Not one penny is paid in tax on these assets.
Assets are effectively dead money so by taxing them we are freeing up redundant real money and seeing it work for the good of all.
The richest 10% UK residents own £4,000bn, with an average per household of £4m. The bottom half of our society own just 9%. The wealthiest hold the bulk of their money in property or pensions, and some in financial assets and objects such antiques and paintings.
A one-off tax of just 20% on the wealth of this group would pay off the deficit and help greatly with the national debt, since interest payments on the debt are a large part of government spending.
This tax of 20%, with a very high threshold so the very richest paid only, would raise £800bn according to respected economist Prof. Danny Blanchflower.
A major positive for this scheme is that the tax would not have to be immediately paid. The richest 10% have only to assume liability for their small part of the debt. They can pay a low rate of interest on it and if they wish make it a charge on their property when they die. It would be akin to a student loan for the rich.
A YouGov poll of over 2,000 people was conducted in to test attitudes.
There was very strong support, with 74% of the population approving (44% strongly approving). Only 10% did not approve. Significantly those having the highest incomes were slightly more supportive than the lower income groups. The strongest support came from those over the age of 55, with 77% in favour (47% strongly), again a group with most to lose.
There are strong economic arguments for this tax. A key problem for the British economy is that much of the nation’s resources have been directed into inflated property values, which is where many of the bonuses ended up.
This is in effect dead money but the tax would have the effect of re-circulating it as government spending, which could stimulate growth. The deficit would thus be further reduced as the unemployment resulting from the proposed cuts would be avoided – thus no increase in unemployment pay and no loss in tax revenue from the unemployed. This proposal offers a real alternative, to move debt off the government’s books, using money that is largely trapped in the housing market, from people who will not miss it.
Our values demand radical steps. Our people are hurting. This will galvanise our core voters to actually casting their ballot, will appeal to the “thinking” (ie what’s in it for me) voter and frankly how many super rich vote for us anyhow?
We have a year to make the argument and take the fight to the Tories so let’s bring it on. (I’ll eat my hat if I hear back from anyone but there you go)