Andrew Castle is Leading Britain's Conversation.
7 May 2017, 17:43
Stig Abell questions whether the "aspiration argument" against increasing taxes makes sense, when our public services are crumbling.
Labour's Shadow Chancellor John McDonnell today told Andrew Marr that income tax will rise for people earning more than £80,000, but insisted it would be a “modest increase”.
Stig Abell thinks this makes sense, and on his Sunday LBC show he asked his listeners what they thought too.
Stig said: "We've got a crisis, have we not, in our public services. Waiting lists up on the NHS, schools are facing budget cuts, old people are dying in hospital because there's no care for them outside.
"We need a higher tax intake, don't we? Because we spend too much. We don't have enough money to spend what we need. People who earn more than £80,000 a year should stump a bit more, shouldn't they?
"The rich should shoulder more of the burden they currently do. That seems to me to be a relatively straightforward statement.
"Ah! But people will say, maybe you agree with this, you shouldn't kill aspiration. Aspiration's always the word that comes out. You shouldn't punish the successful, you shouldn't drive people out of this country due to tax.
"The top one per cent already contribute something like 27 percent of all tax, we shouldn't try and leech them more. The aspiration argument really interests me, it always gets dragged out whenever tax comes up.
"So you can help answer it: Would you not want to earn more than £80,000 if the tax on it was higher? Would you stop striving, would you stop aspiring?
"I don't think that makes sense to me. It doesn't make sense at all. But you can tell me. Here's a quote, in fact, from a senior Labour MP, who doesn't want to be named, told the Guardian website this today: "It looks like a policy to punish those who are getting on, and those who want to get on by earning more, it will not go down well among our people in London, it's a punishment policy".
"Do you agree with that? Does it go down well with you? Most people, 95 per cent of people don't earn £80,00 a year. Aren't all of that 95 per cent of people saying 'Thank God you're going to tax people who earn a lot of money, more'. Am I missing something here?
"Because the anti high tax position it's that of Thatcher, and Reagan, and Donald Trump. Trickle down economics is the argument, let the rich get richer, because they can, and what they'll do is they'll spend more money, and that will benefit everyone. The benefits will trickle down.
"But actually, as it happens, there's little evidence that that works, it just leads to income inequality in the first instance, and then asset inequality afterwards.
"The rich stay richer, because they can afford assets like houses, and driving poor people out of the cities, or into rent. So we do need more progressive taxing, don't we?
"You could argue, maybe you're a socialist or traditional Labour Party person out there, that the £80,000 threshold is too high. The average wage in this country is £25,000, if you're on that or less than that, are you going to be happy that someone who earns three times the amount that you are on, will not have to pay any more tax.
"McDonnell said this morning: "I'm going to be the first socialist Chancellor in the tradition of the Labour Party", but is this policy socialist enough for you?
"McDonnell reads Das Kapital, he's a Marxist, despite unconvincingly saying he's not. Should he not be going after the middle classes is a bit more? We don't know, do we, how much the tax will be, what it will create, how the money will be divided.
"But do you trust Labour on this? Experts, there's a tax expert already saying it won't create enough money, because it doesn't touch enough people, it's only getting into the ribs of the five per cent, it needs to get into the ribs of the thirty per cent, the forty per cent.
"But on the face of it, this is the sort of policy that should be popular. It should be populist. Do you agree?
"And then finally, one thing I'm interested in your views, does earning £80,00 a year make you rich? If I say 'so and so's on £80,000 a year', do you think 'that's a rich person'.
"I do earn more than £80,000 as it happens, not from this job I hasten to add. And I think, this is my view: That we're living in an age when tax probably does need to go up, and people who earn more, probably should pay more.
"So I'm not cautious, I'm cautiously, because you never know the details of these things, I don't disagree with this policy, I don't think it's the politics of envy, I think it's the politics of reality."