Rich throw a tax tantrum

THE TORY press is once again bleating about a new “threat” to business following Labour’s pledge to restore the 50p income tax rate this week. We’re told the legions of the rich who have made London their home will desert en masse in protest while at the same time asserting that it won’t bring in that much revenue anyway.

Balls says that earnings over £150,000 would be taxed at 50 per cent by a future Labour government — the level set by during the last days of Gordon Brown’s administration in 2010.

In fact the Labour pledge, made by Shadow Chancellor Ed Balls at the Fabian Society’s New Year conference last weekend, is a very modest step to making the rich disgorge a fraction more of their ill-gotten gains towards maintaining public services. The capitalists, industrialists and landowners can well afford it. Under the Tory-led Coalition, and for much of the time of the previous Labour administrations, the rich have had it good. The tax breaks of Britain’s casino economy have made London a Mecca for every spiv and profiteer in Britain and abroad. There are now 281,000 millionaires in London alone.

Meanwhile more than 10 million people do not have enough money to enjoy a basic minimum standard of living. Cuts in tax credits and the freeze in child benefit have driven millions into poverty. Millions live on pittance pay or the meagre benefits that state still grudgingly provides — or increasingly fails to provide — for the sick, disabled or unemployed.

At the moment the only practical way that the health service, education, benefits and pensions can be maintained is by forcing the ruling class to part with some of their vast wealth. In the immediate situation that can be done by shifting the burden of taxation away from workers and onto capitalists and others who control or share profits.

The restoration of the 50 per cent income tax rate, while welcome, doesn’t go anywhere near far enough. It encompasses too few of the rich and it can easily be avoided. Up to 1979 the tax on the rich was much higher so campaigning for higher taxation of the rich is just reversing the tax cuts introduced by the previous Conservative governments and should be seen in the same light as reversing the Tories’ anti-working class laws.

In 1979 the top rate of income tax was 83 per cent, which applied to incomes over £20,000, equivalent to £155,000 these days, with an extra 15 per cent investment income surcharge.

Ed Balls is laying out Labour’s economic agenda for the next election, which is basically to carry on where Brown left off with a number of modest neo-Keynesian reforms to encourage spending while trying to resurrect the bubble- economy based on the housing market that so singularly failed when the slump hit the capitalist world in 2008.

Making the rich disgorge a fraction of the wealth they extort from the working class every year will go some way to reverse the destruction of social provision that has taken place since 1979. But the ruling class won’t give up their wealth voluntarily and they will seek ways to reverse any tax increases, or at least offset them.

Kicking the Tories and Liberal-Democrats out is the first priority and that can only be achieved through a massive vote for Labour in 2015. But that alone will achieve nothing unless the organised working class mobilise to ensure that the demands of working people are carried out by those who claim to represent them.

While working for a Labour victory, communists must struggle to put the socialist answer to the crisis back on the working class agenda because the only guarantee that workers have to ensure that all the wealth generated by workers is used for the benefit of workers is to overthrow the ruling class and take control of the state.