Labour’s shadow chancellor, Ed Balls, has incurred the wrath of the super-rich with his timid proposal that an incoming Labour government would increase the top rate of income tax for those earning over £150,000 a year from 45% back up to 50%.
Almost immediately after announcing this policy Balls was backpedalling, saying the 50p rate was only temporary and a maximum, in order to reassure the wealthy that he and Labour were not “anti-business” – as if anyone was in any doubt!
Meanwhile, Chancellor George Osborne revealed he has no qualms about supporting the mega-wealthy by hinting that the richest income earners could see their tax bill cut again under the Tories, from 45% to 40%.
Business experts dismiss the efficacy of Ball’s proposal by saying the tax take will be minimal. But this is because it represents a tiny rise in income tax as opposed to a comprehensive and progressive wealth tax.
Moreover, the super-rich employ an army of accountants to avoid paying billions, often using offshore tax havens.
Many of these gaping tax loopholes were left open by previous Labour governments and are being maintained by Osborne and Co, despite Prime Minister Cameron’s much vaunted G8 summit pledge last year to tackle international tax avoidance.
Labour’s timid tax measures will not provide the resources to lift millions out of poverty nor provide long-term increased funding for public services.
To achieve that a socialist plan of economic production would be needed through the nationalisation of the major corporations and banks, under democratic workers’ control and management.