Monday 18 November 2013
Surprise, surprise. Boris Johnson has gone and caused a signature ruckus: this time saying we should celebrate, not condemn, the UK’s batch of gazillionaires. And he doesn’t stop there – saying the papers should abandon their annual rich lists and replace them with a catalogue of the country’s top 100 “Tax Heroes”, with automatic knighthoods handed out to the top 10 earners-come-tax contributors.
So is the Dulux dog of English politics barking mad? Or could he be barking up the right tree?
As the London Mayor points out, the top 0.1 per cent of UK earners currently pays 14.1 per cent of all this country’s taxes. That slim demographic – around 29,000 people according to Mr Johnson – should be venerated, not dismissed. They provide a sterling example to this country’s aspiring youngsters: giving them much to aim for in terms of both personal success and tax contribution to the greater good.
We also have much to learn from the international community about how best to treat (and keep) our rich. France, in particular, provides the case in point for keeping the wealth bashing to a minimum. President Hollande – now perhaps the most unpopular French person since Marie Antoinette – is finding out that imposing onerous taxes doesn’t work quite as effectively as that little Russell Brand inside us of all would hope.
Though Gerard Depardieu is the poster boy for European tax dodging, his case is just one of thousands. Bernard Arnault, owner of luxury brand LVMH and the15th richest man in the world according to Bloomberg Billionaires Index, applied for Belgian resident almost immediately after Hollande reached office. Regretfully for France, Mr Arnault set a trend. As the Financial Times reports, thousands of wealthy French followed his example.
One does not hasten to imagine the amount of lucre Mr Arnault – or his fellow wealthy decampers – could have contributed in tax to the President's desired development of the banlieues. Britain should take note of the French example. Bash the rich at your peril – it may only serve to increase the maladies of the poor.
Boris Johnson says the top 0.1 per cent of earners pay 14.1 per cent of all UK tax. We say: so what? That figure is not, as Johnson puts it, “amazing”, but actually rather shocking. Such a top heavy society is neither admirable nor sustainable. It calls for redress.
Nor should we be surprised at this kind of rubbish – especially coming from His Fluffiness, the Mayor. The ultra-rich (many of whom are remnant mates from bygone Bullingdon days) are Boris's favourite minority – as evinced by the last last time he stuck up for bankers, suggesting they were treated like “lepers”.
But there is a more pragmatic reason for keeping up pressure on the plutocrats. Namely, tax. Geographically and ideologically, the UK currently occupies a middle ground in taxing terms between the US and harsher taxing countries like France. While the Byzantine tax laws of the US allow insane tax breaks for the uber-wealthy (the family who own Walmart, the Waltons, somehow have the same net-worth as the bottom 40 per cent of all Americans), the UK currently has tax laws that – at least to some small degree – work. We must keep up the pressure on the rich and make sure the unthinkable does not come to pass: that is, the near-taxless society dreamt of by American economist Art Laffer and endorsed by Mr Johnson.
As Richard Wilkinson and Kate Pickett set out in their bestseller The Spirit Level: the greater a country’s economic disparity, the more miserable its inhabitants – right the way across the wealth spectrum.
We shouldn’t be praising the ultra-rich and we certainly shouldn’t, as Boris suggests, be knighting them. Let’s increase, not slacken, the pressure: equal societies are happy societies.