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Don’t raise Social Security and let the rich pay instead

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A perfect storm of soaring energy bills, runaway inflation, rising interest rates and falling real wages have combined to deal the biggest blow to living standards in nearly half a century.

After the public health emergency of recent years, we are now facing a social emergency. In the world’s fifth-largest economy, almost half of all children will soon be living in families that have to do without the bare essentials. To our shame, our country has more food banks than McDonalds.

At next week’s spring “mini-budget”, the chancellor should acknowledge the deepening crisis facing tens of millions of people and present an emergency package to protect living standards.

Still, there are worrying signs that the government will seek to do as little as possible, blaming the terrible war in Ukraine for the cost of living crisis.

The truth is that this cost of living crisis not only predates Putin’s illegal invasion, much of it is actually the direct result of Downing Street politics.

The abolition of the triple freeze on pensioners, real cuts in public sector wages and the scrapping of the Universal Credit boost have pushed people further into poverty.

Next month the Tories will make this worse by increasing Social Security payments for tens of millions of working people.

Such a regressive tax increase is simply not necessary. It is a conscious decision and part of the government’s plan to pay for this economic crisis on the backs of the majority of the people.

While the vast majority of people worry about how to pay for their heating bills, the wealthiest have enjoyed a bonanza.

British billionaires increased their wealth by £10bn in the first year of the pandemic – that’s £290m a day. Gas and oil giants are making £900 in profits every second from rising prices, and just last month the government voted in favor of a multibillion-pound tax cut for bankers.

So there’s plenty of scope to raise billions from the wealthiest in society to fund an emergency package to alleviate economic hardship.

That’s why I’ve launched a campaign to get rid of this Social Security increase for working people and replace it with a wealth tax on the top 1 percent.

My parliamentary motion calling for this has already been supported by over 60 MEPs from eight parties and this week I will table a petition signed by thousands in Parliament calling for this change.

An annual tax of just 1.5 percent on all wealth over £5 million would bring in £14 billion a year, according to the UK Wealth Tax Commission’s calculator. That’s the same as the increases in Social Security.

Given that there are only around 260,000 families in the top 1 percent of households, and even fewer with assets over £5million, this should be an easy choice for any government interested in protecting the majority.

We also need a broader debate in our country about wealth taxes. We’re one of the most unequal countries in Europe in terms of income distribution – but it’s even worse when you look at wealth.

The richest 1 percent own almost a quarter of Britain’s wealth. However, income from property is often taxed below earned income. For example, someone who lives off stock dividends pays less in taxes than someone who earns the same amount by getting up and going to work every day. How can this be justified?

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Likewise, capital gains tax paid on gains on the sale of assets such as stocks or a second home is paid below income tax rates. Compensation and the removal of exemptions alone would bring in around £17 billion annually.

We could even create a huge emergency social fund with a one-off wealth tax. A one-off 10% tax on wealth over £100m would raise £69bn. That could be used to support people in this crisis and help rebuild communities hit by a decade of austerity and the slowest wage growth in 200 years.

But the first step to taxing wealth instead of income should be for the Chancellor to scrap Social Security increases and instead pay the wealthiest — not those on the sharp end of a cost-of-living crisis.

The clock is ticking towards a livelihood catastrophe, but there is still time for the chancellor to do the right thing.

https://www.independent.co.uk/voices/rishi-sunak-national-insurance-tax-statement-b2038967.html Don’t raise Social Security and let the rich pay instead

Caroline Bleakley

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