Don't Panic

Is it time to make the rich pay

When I graduated from university in 2007, I was entering a job market on the cusp of recession. Nearly six years later, I have never worked in a growing economy.
 
So with this in mind, it is hardly surprising that Nick Clegg has reached out to younger voters like me, arguing that the burden of taxation should be shifted from income - what people earn - towards wealth - what people have.
 
It’s well established that the gap between rich and poor grew under New Labour and has continued under the Coalition. The Organisation for Economic Co-operation and Development has said a tenth of British society now earns 12 times as much as the poorest, up from eight times as much in the 1980s.
 
Despite this, there seems to be an impasse over increasing income tax.
 
The net effect of this is that the income tax for the rich - those earning over £150k a year - hovers around the 50% mark, and rarely ventures further.
 
The Deputy PM's focus on wealth - presumably assets a person owns, such as houses - appears a logical one.
 
However, I’m not sure taxing a person’s wealth is any less punitive than taxing their income - either way, you end up with less money. It could be argued that this system punishes the responsible rich - those who earn well and invest it, rather than the feckless rich - those who earn well and spend it.
 
As far as Clegg’s concerned, it represents an opportunity to get back in the saddle. He has seen his credibility plummet since acting as kingmaker in the last election. The notorious student fees backtrack, which ostracised a huge swathe of voters, along with his recent pseudo-tantrum over the Conservative rejection of Lords Reform have left him looking isolated and impotent. He must move the conversation on in order to stay involved.
 
So he’s right to bring forth a more mature conversation about tax. The risk is that the rich simply move their assets offshore anyway - and such self-serving greed must be consigned to history.

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