Monday, 26 March 2012

Budget 2012

A response to the 2012 budget

 

Dear MP

[1]  I, and other Quakers in the North East, support the need to progress firmly towards a balanced budget.

[2]  We recognize the need for British tax policies to be related to the tax policies of our major trading partners in Europe or North America; it would be Quixotic to be too far ahead in the direction of fairness and equality. But we also recognize the absolute value of justice, the inherent wrongness of exploitation, and the infectious and corrosive nature of greed. We think it would be appropriate for Britain to lead (as we did in the case of slavery), or at least point the way, towards a more moral, equal and integrated society, rather than to follow others (shamefully) in the opposite direction toward inequality and greed.

[3]  The fact that the gap between the rich and the poor continues to widen in advanced capitalists societies convinces us more forcefully than any economic argument that there is something wrong with the system. That trend leads to social disintegration, exploitation, and eventually to revolution. We believe that the need to curb the growing wealth of individuals and groups trumps the need to attract greedy entrepreneurs to this country. We ask for effective measures to break up large accumulations of wealth, as well as for adequate progressive taxation. The significance of a progressive tax structure lies as much in the signal it gives of a government's stance on this issue as in raising revenue. We believe that withdrawing the 50% tax rate gives the wrong signal.

 [4]  We understand that Parliament was told that the removal of the 50% tax rate after only one year of operation was justified on the grounds that it yielded several fold less than was predicted. We also understand that such was largely because profits were brought forward into a year that escaped the tax, which would inevitably be only a one-off effect. We would strongly condemn any deliberate attempt by Government to 'pull the wool over the eyes' of Parliament and the British people. We do not see why tax avoidance (and possibly criminal tax evaison also) should be rewarded by withdrawl of the tax.

[5]  Punitive tax regimes do not encourage philanthropy; rather they tempt people into tax avoidance and evasion (as we have just seen). Can more be done to encourage those liable to high rates of tax to lower their tax liability by voluntary donations to registered charities? 

[6]  I endorse the suggestion by Tim Harford (1) that the  Government sould aim to implement reccommendations of the Mirrlees Report (2), including:  "broadening the tax base, unifying national insurance with income tax, abolishing the majority of special treatments, aligning tax on income with that on capital gains and dividends, taxing property and land" .

Refernces:

(1) http://timharford.com/2012/03/mr-speaker-let-an-economist-speak-sense/

(2) http://www.ifs.org.uk/mirrleesReview

Monday, 12 March 2012

Taxation of the Wealthy

Taxing the Wealthy

I am shocked that anyone should talk of repealing the 50% tax bracket for those earning more than £150,000 per annum. Especially at a time when the national debt is enormous and growing. There will always be a gap between the average income of the top 10% of the population, and that of the bottom 10%. But I am shocked that it is rising in our 21st century liberal democracy. In Britain, that ratio has risen from 8 to 12 in the last 30 years [1]. And, in the face of that, there is talk in government circles of abolishing the 50% tax bracket and inheritance tax!

Who on earth is voting these people into power? Of the 30 million tax payers in the UK only 0.126 million earn over £150,000 [2] So we look back at the Conservative Party manifesto and find that there is no talk of scrapping the 50% tax bracket. It is not the voters that matter in this case, but the cabinet; a bunch of rich kids looking after themselves. They point out that the revenue raised by the 50% tax rate in small (because the number affected is small). True! So its importance is not the revenue, but as a curb and a gesture; it places a slight restraint on the tendency of the rich to get ever richer, and it signals a gesture of intent — "this country does not favour a widening gap between rich and poor".

I take it as axiomatic that society works better when the relative wealth of rich versus poor is kept moderate. But perhaps there are some people brought up with other prejudices, who think that it is better that the assets of the country be mostly in the hands of the skilful, thrifty and wise, than in those of the foolish, thriftless and lazy. There are some (I suppose) who see it as a natural law that the rich get richer and the poor get poorer. They might think it foolish to combat the inevitable. So, let me try to defend my prejudices with objective arguments.

1.    1. We are interdependent. A rich factory owner needs workers for his factory and customers for his product.

2.   2. Beyond a certain point accumulated wealth becomes a dead asset. Money that is spent ends is someone's pocket and is then spent again, whereas money beyond what can be spent is money lost to the community.

3.   3. Wealth corrupts. The need to be nice to our neighbours is what keeps us civil; no such need, no such civility.

4.   4. Un-earned wealth is both undervalued and regarded as a birth-right. Necessity and need are the parents of creativity and energy.

5.    5. A wealthy person who sees his poor neighbours as servants, customers, objects, but not as human beings, is disgusting.

So, we must continually trim the wealth of the wealthy for the sake of all strata in society.

 

Occidentis, MORPETH

 

Tuesday, 6 March 2012

Assad and Syria

Assad and Syria

Bashar al-Assad has been President of Syria since his father Hafez al-Assad died in 2000. He is the head of state, but is also Chairman of the Syrian Al-Baath Party and of its Central Committee. It seems naïf to suppose that he alone is responsible for every decision made by the effective government of the country. Even more naïf to suppose that the people of Syria will benefit from his removal. However, the pressure for his removal seems to be building. It is the misfortune of repressive governments that their only exit strategy is death.

Since the Ottomans evacuated Syria in September 1918 at the end of the first world war, Syria has experienced almost continual violence and political turmoil till 1970 when Hafez al-Assad and Mustafa Tlass staged a bloodless coup inside the ruling Syrian  Al-Baath Party . Since then the country has become one of the most stable in the Arab world, no doubt by operating a more effectively repressive regime than before, but also by gaining the support of religious minorities with secular and modernizing reforms, and by fostering if not actually bringing about a considerable improvement in living standards.

When Bashar al-Assad, the ophthalmologist second son of Hafez, became heir apparent in 1994, on the death of his older brother Bassel, he had only 6 years in which to establish himself in the Baath Party machine and in the country as the obvious and only successor to his father.  However, he was adopted unopposed, and has survived for 12 years. While offering tiny glimpses of reform and liberation he has in fact retained all the tools of repression used by his father's regime, and (of course) retained most of the advisors and policies.

There seems little prospect that the present government of Syria will be able to institute any democratic reforms or even tolerate free discussion of alternative policies. But that does not seem to me to justify the lack of any serious or remotely sophisticated diplomatic effort by the West to encourage reform. The opposite seems to have been the case. There seems to have been an assumption that some sort of 'Arab-Spring' revolution is needed, and revolutionary elements have been encouraged and armed.

It seems obvious that any diplomatic dialogue with the Syrian government should have  started by seeing the situation from the Syrian government's point of view; accepting that it is the duty of every government to maintain order. And starting from there. Though 90% of the chatter in our British media is the childish, gung-ho excitement one might see at an illicit badger-baiting, occasionally we hear a more mature voice of understanding and restraint [1-4]. The prospect for peace and reason seems very meager. But our knowledge of the methods of Conflict Resolution teach us that each party to the dispute must see the pain of the other party.

The other message from history is about PATIENCE rather than PRIGGISHNESS. We in England also had a decade of civil war (admittedly 370 years ago); in England also government troops fired on peaceful demonstrators (admittedly 193 years ago). Thank goodness no external power had the impudence to interfere significantly on either occasion. Let us hope that Syria also can be left to sort out its own future.

References:

1. http://www.caabu.org/news/news/building-democratic-syrian-state-transcript

2. http://www.redstate.com/nikitas3/2012/02/27/us-should-leave-syria-alone/

3. http://blogs.fco.gov.uk/simoncollis/

4. http://uk.tv.ibtimes.com/syrian-opposition-lacks-coherent-leadership-former-uk-envoy/2139.html