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August 31, 2012 / politicsbitesize

Quick, let’s tax the rich!

After the riots across the UK last August, David Cameron gave his rousing ‘We are all in this together’ speech. He called for an end to politicians simply ignoring the social problems ‘that have been festering for decades’ and acknowledged that the banking crisis and MPs’ expenses fuelled the anger felt by most members of the British public. But, exactly a year on, it can be argued that the ‘us’ the Prime Minister referred to at the end of his speech aren’t ‘all in it together’.

Nick Clegg, in an interview published on Wednesday 29th August 2012, has highlighted the fact that there is still a sense of ‘us’ and ‘them’ when it comes to bearing the financial burden in Britain. The Deputy Prime Minister told The Guardian that he thinks, ‘we [the Government] need to really hard-wire fairness into what we do in the next phases of fiscal restraint. If we don’t do that I don’t think the process will be either socially or politically sustainable or acceptable.’ With the aim of sharing the economic strain that the country is currently facing, he calls for an emergency tax on the UK’s wealthiest people.

Clegg indicated that any new tax would be placed on wealth rather than income so that those with ‘high asset wealth’ would pay more out on their estates. He calls for a continued crackdown on tax avoidance and claims that his party will make sure ‘that tax breaks don’t go disproportionately to people at the very top’.

All this talk of hitting the wealthy hard comes only a month ahead of the Liberal Democrat Party Conference due to take place in Brighton. Mr Clegg plans to outline his proposals in more detail during the conference, where he feels that he and his party ‘can start spreading our wings more’.

On Radio 4’s Today programme the senior Tory backbencher, Bernard Jenkin, dismissed the Deputy Prime Minister’s rhetoric as nothing more than a ‘pre-conference, easy clap-line’. The shadow treasury minister, Chris Leslie MP, has reminded the British public that Nick Clegg ‘voted for the tax cut for millionaires in George Osborne’s Budget’ earlier this year.

Baroness Kramer, the Liberal Democrat House of Lords Treasury spokeswoman, tried to damp down any flames by telling the Today programme that the proposals were not party policy yet and that she ‘would be very surprised if those ideas are not then shared at the cabinet level. This has got to be worked through‘.

But let us set aside party politics for the moment and concentrate on some of the facts surrounding some of the wealthiest individuals in the UK. Two weeks ago Her Majesty’s Revenue and Customs (HMRC) published a list of 20 people accused of dodging tax. It includes people who have avoided paying tax and VAT and who are accused of smuggling illegal goods into the country; some on the list have been fined and sentenced in absentia. However, according to a report in the Socialist Worker, HMRC’s list is incomplete because it inadvertently leaves off people like George Osborne and Sir Philip Green who are allegedly avoiding tax by using offshore tax havens.

Something needs to be done about this and Nick Clegg is right to keep the pressure on the government. A clean-up of the tax system is desperately required and the binning of loopholes that benefit the rich would be much welcomed. It will remain to be seen whether the Deputy Prime Minister’s rhetoric does indeed become government policy.

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