Image of Hammer and Sickle

New Communist Party of Britain

adopted December 2015

Tax the rich

For the last 40 years, under the Conservatives and under Labour, public spending has been cut. Vital services like the National Health Service, public transport, education and local amenities have all become seriously underfunded. Taxation is the way these services and other elements of the social wage should be funded.

If the social wage is to be no more than a safety net it has to be extended, this can only be done by forcing the ruling class to disgorge 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.

For years both Tory and Labour governments have clamoured for lower income tax. In 1979 the top rate of income tax was 83 per cent, which applied to incomes over £20,000, equivalent to £155,000 in 2012, with an extra 15 per cent investment income surcharge. The investment income surcharge was abolished in 1985 and the top rate of income tax was cut to 40 per cent in 1988. The Conservative government’s decision, in the 1980s, to cut the top rate of income tax and shift taxation towards council tax and VAT. This is one of the reasons why poverty levels in Britain is so high.

In 1979, the top fifth paid 37.6% of their incomes in tax whilst the poorest fifth paid only 30.5%. By 2011, the burden of taxation had reversed, with the poorest fifth paying 36.6% and the top fifth at 35.5%. Campaigning for an increase of taxation for those most able to afford it is just reversing the tax cuts introduced by governments since 1979 and should be seen in the same light as reversing anti‑working class laws.

Not satisfied with the reduction in taxation on profits and high incomes, businesses sought other ways of reducing their tax -

If businesses paid the same proportion of tax on their profits as workers do on their wages the extra money available for the social wage would be £79bn per year which is about the same amount of monies paid out in retirement pensions, widows’ and guardians’ allowances, jobseeker’s allowance, incapacity benefit, maternity benefit, statutory sick pay and statutory maternity pay or alternatively the new state retirement pension could be raised to £207 per week.

If tax evasion was eliminated the extra £82bn of tax could be used to increase the spend on the NHS resulting in a staggering 75 per cent increase in the provision of patient care!

It is these businesses, their directors and the others who benefit from the profits of control who have gained most from the knowledge and skills of the working class. These skills have been developed over time, not by any contribution from the capitalists, but by workers putting in time, effort and money to fund schools, universities, the NHS, libraries and cultural facilities. It is about time that the profits taken by the capitalists paid for the upkeep and development of this knowledge.

Tax avoidance and evasion has had much criticism in recent years that it forced the Labour Party to make the pledge that all those earning over £150,000 should be in the 50% tax band. This would affect only 236,000 out of a total 29 million tax payers, back in 1979 these high rate tax payers would have been 83% not the 50% the Labour Party is proposing.

The New Communist Party maintains that the burden of taxation should be shifted away from workers and onto the wealthy. The Party is opposed to all indirect and regressive taxes such as VAT.

To ensure an increase in the disposable income of the working class — to provide free education for all, a national health service free at the point of delivery and a pension at two thirds median wage — a fundamental change in taxation is required which should be far more than the Labour Party pledge. That change is:

The rich have plenty. They must pay.

Our demands for a progressive tax system can be achieved as workers want it to be done; they are fed up with the rich avoiding paying tax. 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. So 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.