The current pandemic has exacerbated huge inequalities in human security in the UK, says Bryn Lauder. Rebuilding a more generous, equal and compassionate society demands tax justice reforms that spread responsibilities fairly, tax wealth, tackle tax dodging and prioritise the needs of the Global South.
Our tax systems are unfair. This is both because they are fundamentally designed that way and because individuals and corporations exploit the weaknesses in the systems in order to dodge taxes that they owe. At Church Action for Tax Justice, we believe that the time has come to correct these inequalities and to create a more open and equitable tax system that works for all, not just the privileged few. For that reason, this month, we have launched our Fair Tax Now campaign.
Sometimes we can experience a kind of fatalism about tax, believing that any unfairness in the system is somehow inevitable and cannot be changed. However, that is not the case. At a policy and legislative level our tax system is designed, so can be redesigned. Choices have been made at various points in history to cut Corporation Tax and to introduce Capital Gains Tax and a range of other tax reliefs. These choices can be unmade.
Our campaign stands on the stories of individuals who have been affected by the unfairness in the system. We share the story of Jo, a nurse, to highlight the unfairness of taxing income. The average nurse in the UK pays just over 22% of their income in tax and national insurance. In contrast, those who earn £10 million a year pay a lower rate than this. We also highlight the story of Andy, who, when earning minimum wage, had council tax bills at almost a tenth of his family’s income. The family got into arrears and eventually a bailiff turned up at the door. Contrast Andy’s experience with those in our country with the highest incomes and living in the most expensive houses; they spend around 1% of their income on council tax. Such people clearly don’t live with the fear of losing their possessions, their home or having bailiffs turn up at the door.
Building back fairer
The COVID-19 pandemic is only exacerbating the inequalities already evident in our society, placing further burden on those who already feel the misery of poverty the most. We believe that in order to create a more generous, equal and compassionate social climate following the pandemic, we must move towards a fairer taxation system now. But what are we suggesting needs to happen?
Well, firstly and perhaps most importantly, we want to see a change in the public narrative concerning taxation. At an event we held in October 2020, Dr Rowan Williams, former Archbishop of Canterbury, said this, “A society’s levels of progressive and redistributive taxation should be a matter of pride not anxiety.” One of the most unchallenged narratives that has been allowed to dominate our public discourse is that tax cuts are a good thing, and tax rises are a bad thing. Whether or not that is true depends crucially on whom those tax cuts fall. If they deprive local communities of much needed public services, if they bring our health and education services to breaking point, if they drive more families into poverty, then tax cuts are not a good thing. As for increases in tax – if tax rises ensure we have a well-equipped and resilient NHS, if they enable our children to be effectively taught, and if they mean that families don’t have to beg for food, then that is a good thing.
Taxes are the price we pay for being citizens, members of a national community. They are fundamentally good. This is why we hope we can get to a stage where tax avoidance is as morally unacceptable as failing to tackle your carbon footprint. We cannot imagine a corporation or individual standing up with pride and saying that they have done nothing to tackle the green agenda. Yet for some reason we consider it acceptable that there is a whole industry devoted to helping corporations reduce their tax obligations. As Richard Murphy said to a group of tax professionals recently, “We have virtually defined our professional ethics around an obligation to increase the personal wealth of our clients, irrespective of the cost to society at large.” Earlier this year, it was reported that only 19% of businesses explicitly shunned the use of tax havens in their published tax policies. We need to see this form of tax evasion for what it is – a completely unacceptable and morally bankrupt practice.
Fair Tax Now
We are also proposing a number of specific changes to the UK and the global tax systems. These include: taxing income equally, reforming council tax, taxing wealth effectively and putting a stop to tax dodging. Specific details surrounding these reforms can be found within our Fair Tax Now report. Globally we want to see changes in global tax rules that will prioritise the needs of Global South countries. These rules are currently being negotiated at the OECD and the present proposal is one which benefits wealthy countries to the detriment of poorer countries as it allows multinational corporations to continue to avoid paying the taxes they owe in poorer countries. We want the United Kingdom government to change its stance and so put poorer countries first. Moreover, enabling poorer countries to retain a greater proportion of their own revenue is a clear way in which the human security concerns of those countries can be addressed.
Carolyn Lawrence, Vice-President of the Methodist Conference says, “In the end, Tax Justice isn’t about statistics – it’s about people”. We believe this statement to be crucial to our campaign for fair taxation. Our tax system isn’t simply about numbers, it’s about you and me, it’s a mechanism by which we can create and fund a healthy, equal and thriving society. Tax reform is about securing a fairer future for all, ensuring that all citizens may be treated equally with compassion and fairness. It is right that we should fight for Fair Tax Now.
Church Action for Tax Justice is calling individuals to email their MP asking for fairer taxes using an editable letter and postcode-finder.
The views and opinions expressed in posts on the Rethinking Security blog are those of the authors and do not necessarily reflect the position of the network and its broader membership.