Wealth tax now

From immigration to the economy, Curtis Daly busts some of the most harmful myths propagated by right-wing politicians, pundits and the media.

Video transcript

Boris Johnson has broken his 2019 manifesto promise by proposing to increase National Insurance to pay for social care. The increase will be 1.25%, estimated to bring in around £10bn a year. The prime minister said that he won’t ‘duck the tough decisions needed’ to fix the broken social care system.

When a politician says they are making tough decisions, what they really mean is that the majority of us will suffer, whilst they and their rich mates remain unscathed.

The National Insurance tax system is completely broken. The richer you are, the LESS you pay. Completely at odds with the progressive yet still unfair income tax. National Insurance drops from 12% to 2% on any earnings over £50,268/year.

The increase to national insurance won’t go toward improving social care for an estimated three years as £30bn will be spent on rising NHS waiting lists caused by the pandemic. 

This tax hike is essentially workers funding tax breaks for the wealthy as the increase in National Insurance is likely offsetting any tax hikes on the rich. Is this fair? Do we have another way of raising cash for public services such as social care? Of course we do!

Wealth Tax

The Wealth Tax Commission produced a report of a one-off tax on the wealthy. The report looks at a tax of 1% on those that have a net asset worth of £500,000, and couples with £1m. The report concluded that the government could raise £260bn, more than enough to fund social care and many other public services.

To put into context, a 1% one off tax of half a million is only £5,000, an incredibly small amount of money in comparison.

The model of the system the commission proposed would be the one-off tax to be paid over the course of five years, meaning every year the government would still bring in £52 billion. This would more than cover the proposed £10bn needed for Social Care. 

There are many other forms of wealth taxes, such as a Financial Transaction Tax – dubbed the Robin Hood Tax – a tax on capital gains, or taxes on second homes.

Corporation Tax

Why don’t we increase corporation tax?

The current rate stands at 19%, which is the lowest in the G7. In 2010, it was cut from 28% to 21%. This was only two years after the financial crisis, a time when we needed to raise funds not give corporate handouts. 

Even if we proposed to bring it back up to 28%, that wouldn’t be a tax increase but an end to a tax cut. 

The point here is that there are multiple ways of raising funds before we put any burden on the majority of society who are already struggling. Most proposals are around 1% – a number which those at the top would barely notice, but would cause an incredible amount of harm to those at the bottom – especially after a £20 Universal Credit cut.

The Tories were arguing among themselves on whether to increase National Insurance because they were worried about what the voters thought and conscious of the manifesto pledge. What’s funny is that not a single Tory considered raising taxes on the rich….why would they? They’re in it together.

The plans to increase National Insurance is another war on class. Even when the Tories want to increase funding, they will never look to those with the broadest shoulders – only those with the broadest burden.