Economists on a Wealth Tax Commission reported in December 2020 in favour of a small one-off wealth tax to raise £260 billion over five years. Britain has the lowest rate of tax on corporate profits among big, rich countries — 19% where the US rate is 26%, Germany 30%, France 32%.
To really “build back” for equality, we need to win democratic public ownership over the bulk of the business, financial, and real-estate wealth of the top few per cent, the bosses and bankers.
Even short of that, there is overwhelming reason to tax the rich for reconstruction costs. Advance reports of the 3 March Budget say that even Tory chancellor Rishi Sunak will edge up corporation tax.
So eager are the new Labour leadership round Keir Starmer to show themselves “responsible” and “pro-business” that they announced in advance that they would oppose a corporation tax increase. As we go to press, they are trying to finesse the question.
They talk about helping small businesses hit by the pandemic, but by definition the loss-making cafés, shops, pubs, etc. would pay no tax anyway on their (non-existent) profits. Meanwhile, some capitalist businesses, like the supermarkets, have been making super-profits! Even Tony Blair brought in a “Windfall Tax” in 1997 on what he described as “excess profits” (of the privatised utilities).
It’s true that the government can continue borrowing at low interest rates for now. But capitalist inequality can be unwound only by reclaiming the great accumulations won from profit and exploitation.
Sunak will continue furlough payments and the £20 Universal Credit boost, but only for a few months. He will continue constraints on local government which push many local councils into drastic cuts. He will reaffirm a public-sector pay freeze.
He will not pay out for the NHS and social care.
Social inequality has sharpened the pandemic, with Covid-19 hitting hardest at the worst-off — who have to go into workplaces even in the lockdowns and who live in crowded housing where people can’t self-isolate when infected for lack of isolation pay.
In turn, the pandemic has sharpened and will continue to sharpen inequality. Millions of more insecure workers have lost jobs or have been put on shorter hours. Millions are in rent arrears. Millions face a pay freeze.
Solidarity will work to mobilise the labour movement to reverse that spiral, to tame the pandemic and to unwind inequality.