Tax on the wealthiest after the pandemic? The idea advances in the United Kingdom

06/06/2020

Tax on the wealthiest after the pandemic? The idea advances in the United Kingdom

The economic consequences of the health crisis are harsh: massive unemployment, serial bankruptcies, impoverishment of the most vulnerable.

What if the richest were forced to contribute to recovery after the pandemic? The idea is gaining ground in the United Kingdom, a country known for its generosity to great fortunes where the health crisis threatens to exacerbate inequalities.

The economic consequences of the health crisis are harsh: massive unemployment, serial bankruptcies, impoverishment of the most vulnerable.

But for billionaires, the new world might look a lot like the old.

The assets of the UK’s one thousand largest fortunes have been reduced by £ 54bn ($ 68bn) in just two months from the impact of the pandemic, but remain at £ 743bn.

There are 147 billionaires in the country and London is its world capital, led by inventor James Dyson, known for his bagless vacuum cleaners, with an estimated fortune of £ 16.2 billion.

“Money keeps raining on top,” says Rowland Atkinson, a professor at the University of Sheffield in northern England and author of the book “Alpha City: How London Was Captured by the Super-Rich.”

Some billionaires have been accused during the health crisis of wanting to take advantage of public aid, resorting to loans or partial unemployment systems, to round off their businesses.

The Greenpeace NGO has accused Richard Branson, founder of Virgin, of not paying taxes in the UK for 14 years and now demanding that the government save his airline Virgin Atlantic.

After the coronavirus pandemic, the specter of a new decade of austerity emerges after the one caused by the 2008 financial crisis, which only reinforced inequalities to the detriment of the poorest.

The Boris Johnson government is currently spending tens of billions of pounds to cushion the shock and prevent excessive social harm.

But the deficit will skyrocket to nearly £ 300bn in a year and its funding will be a nightmare for conservatives, who have traditionally been reluctant to tax the wealthy.

Radical action

This time the government is going to have a hard time not involving the super-rich in the national effort to avoid excessive cuts in public services, after low-income workers, especially those in the health sector, have risked their lives in the fight against the covid-19.

“In the current context, I do not see political support for more public cuts,” says Arun Advani, a professor at the University of Warwick, in central England.

“The government has shown that it can do something radical now, such as financing partial unemployment or supporting the self-employed. I am optimistic that it will make new proposals to increase taxes” to the wealthiest, he tells AFP.

A YouGov poll released in mid-May showed that 61% of Britons favor a wealth tax on fortunes of more than £ 750,000.

Proof that anxiety is growing, the economic daily Financial Times organized a question-and-answer session for its readers last month about the operation of an wealth tax, which drew a record number of comments.

Richard Murphy, a professor at City University London, believes that the government has many tools at its disposal to tax the wealthiest without necessarily imposing a wealth tax.

Simply by taxing capital income more, to put it at the same level as labor income, £ 174 billion would be deposited in the public coffers every year. This would largely finance the annual health system budget of some £ 120 billion.

For Stanford University historian Walter Scheidel, major global disasters like wars and pandemics can make a profound difference and reduce inequalities.

This could be the case for the coronavirus, he defended in early April in an op-ed in the New York Times.

NETHERLANDS WEATHER