There Is An Alternative

Today's BBC Daily Politics was quite interesting because of a lively contribution from Professor Philo of the Glasgow Media Group, who set out their plan to pay for the deficit by a one-off tax on the richest 10%. Their solution can be found on their website: Tax The Rich, along with the polling done by Yougov, showing widespread support for the idea, support that oddly was even higher amongst the better off!

In fact, I think there are problems with proposals, and think the suggestion I made for a Capital Tax in my blog - How To Pay For The Deficit - is better, and avoids some of those problems. For example, within the top 10% that the tax is proposed to hit, will be people who are actually not rich. According to Philo this top 6 million people have average wealth of £4 million. But, the reality is that wealth in this country is almost as concentrated as it is in the US. Within that 6 million, the bulk of the wealth is probably concentrated in at most several thousand people, with wealth ranging up from hundreds of millions to billions of pounds. According to Philo the cut off point would be £1 million, but in some parts of the country, in particular £1 million is not that much. A fairly average middle class person, and possibly even some better off workers in London, if they bought a house 50 years ago, or have had a house left to them, could have that much wealth tied up in a house, and certainly in a house and Pension Fund. Secondly, taking this money out of the economy in this kind of tax is not the end of the story. It does not take into consideration the effect on reduction of aggregate demand that would result from that money being withdrawn from possible consumption by those taxed, or from a reduction ininvestment by them either directly, or as a result of their savinmgs being channelled into investment by others via credit.

But, whatever the criticisms, putting forward such a solution is good. It challenges the idea that the only thing that can be done is the Liberal-Tory Cuts, and it does so, by stepping outside that simple "anti" position, in order to put forward a positive alternative, which is what I have argued the left needs to do; to stop talking in terms of what we are against, and to start talking in credible terms of what we are for. However, we also have to state clearly in doing so, as I said in my blog above, that, however, plausible, equitable or whatever else the alternative plans we put forward, there is not a cat in hell's chance that this Government will accept them, or implement them. It is not even just that such plans would mean an attack on the Capitalist class that the Government represents. It is that the Liberal-Tory Government's policies are driven - not even by the needs of the dominant sections of Capital - but purely by its own ideology, and by the pressure placed upon it by the social roots of that ideology - the sections of small Capital, the petit-bouregoisie, and reactionary sections of the working class.