Link to this page: http://www.socialistparty.org.uk/issue/626/9592
The Socialist 26 May 2010 |
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Tory government says rich must pay less
CAMERON'S GOVERNMENT wants to cut public services drastically and make most people pay more through rising taxes (direct and indirect) to slash the deficit.
But they plan exemptions. Chancellor (and multi-millionaire) George Osborne wants next month's budget to help the rich with a 'five-year plan' of cutting corporation tax on the profits of limited companies.
The current corporation tax rate is 28p in the pound. Osborne thinks that his proposed corporation tax cut from 28% to an eventual 20% will encourage a private-sector led economic recovery.
But the last few corporation tax cuts have led to economic misery for most as the profit system brought deep recession.
Corporation taxpayers have done very nicely. From paying 52% under Thatcher in 1982, cuts by Tory and Labour governments have almost halved the costs for company owners.
That's if they pay it - many big business people can pay but won't pay.
A survey for civil service and tax workers' union PCS suggests that 'legal', though dubious, tax avoidance costs the tax authorities £25 billion a year.
Unpaid tax bills cost another £28 billion while illegal tax evasion - illegal non-declaration of income or fraudulent claims for tax relief - could lose £70 billion annually! The total loss is at least 15% of all that should be paid.
Big business, particularly firms involved in international speculation (who precipitated the current financial crisis) gain most from these scams.
Small businesses unable to afford an army of accountants may lose out. Workers will certainly pay more tax, with indirect taxes likely to increase, but capitalists will be immune from paying for their system's failures.
Britain's 100 richest individuals have a combined personal wealth of over £250 billion. Just over a third of this, £90 billion, could end Britain's so-called 'structural deficit'. The best way to reduce the public debt is through socialist measures such as bringing the top companies into democratic public ownership.
Then, instead of companies creaming off fat profits and paying little tax, the surpluses generated by these companies can be used entirely for developing the public sector, including workers' jobs and services.