Saturday, 22 August 2009

Tax the wealthy, tackle youth unemployment?

I am pleased to see Polly Toynbee take on the argument I made in City excess and youth unemployment - the twin results of free global capitalism on speed, i.e. that we should consider taxing the better off in order to finance employment and skills investment for the least well off and, especially, the young unemployed. My proposal was:
In addition to clamping down on tax avoidance and evasion, the idea of some sort of wealth tax needs to be considered seriously. The easiest and most obvious way is to start to tax higher value houses more. Capital gains could be applied to the top bracket of first residence housing - in excess of £750,000 say and local taxes on the same properties could also be increased. There are other assets that could be targeted. Politically, there would be difficulty so the purposes would need to be explained very clearly.

Perhaps fighting unemployment could become the justification for wealth taxation? Proceeds could be invested in building up the asset base of the least well off - housing, education, savings, pensions and so on. In these tough economic times, we could use the revenues to create employment. Why not create jobs and skills refitting public buildings so that they are more environmentally efficient? The arguments will have to be clear and open.
The only difference between us seems to be that Polly argues for a tax on earnings. I argue for a tax on wealth (it will raise more and is less avoidable.) Here is her conclusion:
An emergency youth opportunity tithe on high earners for the duration of the recession would be political capital well spent. Reprise the spirit of Labour's 1997 £5bn windfall on utilities that paid for the New Deal for the young: it was popular and it made sense. It would be tempting to swoop down on bank bonuses, making an explicit link between those who helped cause the crisis and those who suffer its consequences. When even George Osborne spots the anger in the air at outrageous pay in an unrepentant City, a windfall is politically possible. There is now new political scope for an appeal for fairer sharing between old and young, between lucky and unlucky generations.
I think we have a discussion.

No comments:

Post a Comment