Thread by @RichardJMurphy

The list of things that are failing in the UK is growing:
- The NHS
- Education
- The justice system
- Social care
- Defence
- The police
The government’s planned response is to cut spending and make things worse. How and why do they think that will work for us?

The government says that taxes will have to go up to pay for better public services. There is no evidence that this is true. Last year more than £300 billion of government spending was paid for by newly created money, provided by the Bank of England. Why not carry on with that?

Those who object to the government creating money to pay for public services say that’s because it creates inflation. It hasn’t for goods, services and wages. It has for shares and house prices. So why not tax wealth more in that case, and have the services we need as well?

The government is clearly planning tax rises to punish those asking for better public services. But how much of that extra tax will be paid by the wealthy? They already have by far the lowest overall tax rate on income and gains in the UK. Why shouldn’t they pay more tax now?

One of the biggest consequences of the government deficits created to pay for Covid has been that the wealth of some private individuals has increased rapidly. Rising share an house prices reveal that. We need to tackle this inequality because it’s destructive of society.

The best way to tackle the rising inequality and resulting division in society that Covid has been creating in the UK is to increase wealth taxes and the taxes on the incomes from wealth and gains.

The wealthiest underpay tax in the UK. They pay capital gains tax at roughly half the rate of income tax. They pay little or no national insurance on their earnings. They get massive subsidies for their savings and pensions from the state. It’s time to change all these.

The wealthy also own most of the UK’s private companies. They’ve had massive tax cuts in the last decade and which are now enjoying a £25 billion tax give away on money they send on capital equipment, whether it’s useful to the country or not. Companies should pay more, not less

The wealthy also own most buy to let properties. That’s OK, but social housing would be better. And better still, they should not get tax subsidies to do so when those renting those properties are struggling to make ends meet. Those subsidies have to go.

What else do we need if we are to have the fairer, more equal, properly funded, stable priced, accessible and optimistic society we need? A government that is honest about how is funded, about what public debt really is, and about who should be taxed would be a good start.

There’s more on these themes in my ebook ‘Money for Nothing and my Tweets for Free’, downloadable here. taxresearch.org.uk/Blog/2021/05/0…