The one part of Kwarteng’s mini budget that I agreed with was that tax wasn’t just about the revenue, but also about the economy. That I concur with but would go further and argue that it’s also about the sort of society that you seek. Sadly, his prescription is going to crash our economy and further fragment our society.
The tanking of the pound’s going to push interest rates ever higher. Good businesses will go to the wall as costs soar through higher import charges brought upon by the falling pound and increased borrowing that’s necessary for many, if not most businesses to operate. The higher bank interest rates will also see homeowners unable to meet their mortgage costs joined in their misery by those made redundant, as firms large and small go to the wall.
That economic disaster will impact on our society. Crime will increase, and many’ll seek to drown their sources in alcohol or wash them away with some narcotic. The child poverty increase will be frightening, the waste of so many lives shameful and the effects almost incalculable in the harm it’ll cause.
The pain in the 80s from Thatcherism will seem like nothing in comparison. Then the pain was largely in declining industrial areas such as steel and coal communities and those suffering at least had a council house above their heads when the P45 came. Now the impact will be deeper and wider. People who never thought such a fate could befall them will experience it and the community solidarity that existed won’t be there where they live.
Of course, in this rush to the bottom there’s those who argue that Scotland must join in. Reduce our tax says Mr Rich or we’ll move south. Squealing like “Calimero” that it’s an injustice and our hearts are supposed to bleed for them, at the same time we’re to shake in our boots at the sword of Damocles they hang above our head.
Many of them have already put their money abroad anyway, so it’s only their domicile for income tax. They’ve made use of trust funds or offshore accounts and have assets such as land and other wealth which isn’t taxed or not as it should be.
Apparently paying more income tax than south of the border’s a pain that they can’t endure. But others are to pick up the cost. The poor and the lower rate taxpayer can fund the declining public services that will follow. But what do they care as they’ve already signed up for private education or health and disdain having to engage with the hoi polloi.
There has to come a time when we call them out and the society that Kwarteng’s fuelling. It’s many years now since I read Wilkinson and Picketts’s book “The Spirit Level” but it’ll be as accurate now as then with the only change being the worsening inequality in the USA and its mini me this UK. Their research disclosed that more equal societies performed better on almost every indice. They were wealthier, healthier, happier, and environmentally better. As I recall only suicide which had local factors was an outlier.
That’s why we should not only hold the line but demand the powers over other taxes on wealth and assets.