Monday, November 24, 2008

Darling unveils 45p tax on rich to fund recession package.

For the past fifteen years it has been the subject which the Labour party has most shied away from, the notion of progressive taxation.

Now, in the midst of an economic downturn, Alastair Darling has announced that people earning over £150,000 will be taxed at 45% as opposed to the current 40% rate.

This is a brave move by Labour and it is intended to signal that, even whilst the country runs up debt, that efforts are being made to prevent stacking up so much that a future tax hike for everyone becomes necessary.

David Cameron, the Tory leader, will point out that the gain from raising taxes on high earners would be way below the sum required to bring the public finances back into order.
Cameron is, of course, correct but he's missing the point. Labour are not arguing that this tax rise will correct or dispose of the nation's debts, but they are arguing that, at a time of economic hardship, those earning wages which most people would regard as astronomical should contribute a little bit more to the national purse because they can afford to.

That strikes me as perfectly fair. The Tories have never understood that Labour wins elections because of that sense of fairness. It's not about punishing the rich, it's about all of us chipping in and doing our bit.

Click title for full article.

No comments: