When it comes to tax, we need courage

We have all heard the leftist motif that “tax is a subscription for a civilized society”, we may even roll our eyes at it, but at times like this I cannot think of a cliche more worthy of repeating until Lord Ashcroft’s ears bleed.

I am reminded this week of JK Rowling’s interview from some time ago:

I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism. (x)

Wealthy people, who owe the soil they were born on for their fortunes, cannot claim the mantle of being patriots.

So it is an uncomfortable paradox for Labour to have a deficit on this.

We must ask, how is it that the Conservative party have a stranglehold over patriotism when they starve our nation of treasured public services? When they cut back the institutions we hold dear? I have written before about how we should argue that the Tories are the antithesis of ‘institutional patriotism’, that the steel industry collapsing, threatening the BBC, and NHS starvation are uniquely anti-British. Now we have another, obscene example, compromising the Prime Minister himself. Labour ought to question why we are seen as the Anti-British party.

But this time, it’s more than just party politics.

Panama, and the Tories’ inevitable inaction in its wake, provide us the perfect opportunity to reset the debate, to turn the taxation conversation off and on again. To make it about the love of your society. Not jut for a Labour rebranding, but for a rebranding of a political consensus that has seen taxation as a burden rather than a hallowed subscription.

For so long, our conversations on tax have been narrow, cautious, and conducted with eyes over the shoulder. Any talk of demanding more radical action than a 50p top rate to offset widening inequality sees our opponents retreat to the same lines over capital flight, with no-one questioning the loyalty and patriotism of those threatening to flee. We need to advocate, right now, for a renewal of the social contract, and to demand the wealthy sign up to it.

If capital flight is, as it inevitably will be, yanked out and shoved in our faces as a justification for inaction, with the equally inevitable Fraser Nelson graphs on the Laffer Curve -which is questionable at best and an entirely false pseudo-religion at worst., we should do what no-one has done in high politics for decades: ask, “what the fuck?”

“What the fuck?”. We’re supposed to roll over and accept that it’s mother nature that the rich ought to flee, that they would flee, and that our economy’s growth rests on being as hospitable as to prevent this devastating prophecy?

Look, undoubtedly, in a globalised economy, mobile assets and wealth is a problem -it’s a matter of contention for economists far smarter than me. And I am not here to argue as an economist. I would lose. I’m here to argue from the viewpoint of a writer. Albeit, not a particularly good one, but one that believes in the power of words and debate. There is a powerful debate to be had, about rolling over and accepting our fates are entangled with compromising with the super-rich just cos’. That’s fatalist bullshit. It’s also bullshit that leads to conspiracy theories about a world elite and the spontaneous explosion of far-right parties and Donald Trump. Centre-left and centre-right mainstream politics ought not to let those guys win the argument. We ought to take the mantle first, and be brave enough to question, head-on, the go-to, whiplash rebuttals we are all used to when we discuss taxing the rich, taxing capital, and simply asking for the contributory principle to extend beyond the poor. Question capital flight as the go-to riposte. It cannot be the end of the story. If it is, what is the point in an autonomous nation state that collects taxes? That’s right, this is about sovereignty too, and right back to where we started: patriotism.

In fact, it doesn’t stop at capital flight. We also roll over when we hear ‘legal loophole’. Oh, Cameron never did anything illegal, he just did what rich people always do! This shouldn’t be a reply. Again, morals, ethics, patriotism? He’s a PM, for Christ’s sake. More than that, we are all citizens that preach contribution, by God we know Cameron does. Enough rules and exemptions. Scrap that riposte too.

We also need to ignore the inevitable cries of the ‘politics of envy’ that have been making the similarly inevitable rounds in the aftermath of Cameron’s tax controversies. Basically…no? I mean, I’m not even going to bother. If you’ve ever said ‘politics of envy’, the door’s over there. We’re gonna get this shit a lot, especially from columnists in the Daily Mail who think the ‘death tax’ is a literal, valid thing to say. Someone with enough resilience is gonna have to one day dare to challenge it. Which is why strengthening Labour’s deficits on things like patriotism, but also competence and leadership are so essential – not just for winning elections, but for national debate. People listen to strong leaders.

But, as I was all too aware of at Saturday’s protest, outrage isn’t enough if we do not provide an alternative. Jeering about the ‘neoliberal consensus’ keeps us in a comfort zone. The Left is very good at grievance. I would know, I haven’t stopped moaning since I could speak the letters “smh”. As with Ed Miliband, we are good at diagnoses, but not at treatment. We can open up this debate, and we should, but we have to have rebuttals to the Right’s excuses for inaction, answers for globalisation and for the secrecy and opportunities it hands to the super-rich.

But solutions are not easy to come by.

Take inheritance tax. Inheritance tax is unpopular. George Osborne prevented a snap election way back when on the back of it. Voters often consider themselves to be middle class, or aspiring to be so, which in turn has such a wide definition that apparently a tax imposed on just the 7% richest threatens YOU AND YOUR FAMILY. Look, this sucks, but it exists. It’s there. It’s been unpopular for a long time.

We need new ideas, maybe even to replace the old, like IHT.

Once upon a time, we were masters of language. Masters of storytelling. Look at tax credits, and the nation’s disgust at the thought of cutting them even when other welfare is fair game. Language is important.  The ‘mansion tax’ was, actually, a good example, kinda, for a subset of voters. But it also spooked a lot of people. So it was also a bad idea for another subset of voters.

We need to look at options for wealth taxes and a ‘new deal’ with higher taxes on the rich. Right now is the time to demand it and to reshape the consensus. But it needs to be done masterly. If we are going to talk about a Picketty-style capital tax, not only do we have to not roll over at the first sight of someone yelling ‘BUT CAPITAL FLIGHT’, we have to be creative with the story behind it. Something that is clearly aimed at the super-rich and cannot be redefined to ‘HIT YOUR FAMILY’. And also about patriotism and duty. Call it ‘Asset Contribution’ or ‘Wealth Contribution’. Something contribution-y.  I’ll leave that up to people better than me. But I go back to what I was saying before: it should be based on patriotism, on principle, on ethics so often swept under the rug cos ‘ya’ know, rich people do this’, ‘they’ll just leave!’ and ‘it was perfectly legal!’. Let’s start questioning this bullshit, cos, you know, it really is bullshit.

Contribution is popular. Fairness is popular. Tax can be popular. Now is the time to be courageous.

 

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