Taxing Success – Beware Lessons from History

“Believe me, dear Sir: there is not in the British empire a man who more cordially loves a union with Great Britain than I do. But, by the God that made me, I will cease to exist before I yield to a connection on such terms as the British Parliament propose.” So spoke Thomas Jefferson.

Taxation. That is what Jefferson spoke of in declaring American Independence and the start of the war of Revolution. Tax again, this time on salt, was instrumental in the British Empire losing India – its greatest loss since America.

In the past three weeks I’ve been to Greece, Russia and India. This week I go to Monte Carlo, Monaco. Currently I am in London, watching US Presidential debates and the Tory Party Conference. Tax is an issue in all these countries. How much people pay, and how much they should pay and how much they evade.

Tax is about justice. Yet who speaks for the 1%? The 1% who own 80% of the wealth? The so called 1% of wealthy, accused invariably of evasion. Should their hard work or good fortune, entitle the rest of us to claim their wealth? Let us remember some truths:

When the Deputy Leader Nick Clegg says the ‘rich’ should pay more tax, he ought to do it when not just returning from holiday. Maybe one reason for inexcusable evasion is the standard set by those who would seek to spend.

Wealth is capricious. Some ends in the hands of the lucky, or the born talented, or silver-spooned. To others it only comes with relentless effort. Yet if effort were all that was needed for wealth, then the women of Africa walking miles daily to fetch water, would be the richest in the world.

Votes are not granted by the amount of tax one pays – so again, who speaks for the 1%? A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.

When this past week hedge fund manager David Harding revealed his £34m tax bill – where was his thanks? And the thanks to those who choose to work in place of holiday, who choose to work late instead of go home early, who choose to start early in place of late? They do not seek thanks – but ‘from each according to their abilities, and to each according to their needs’, as they used to say in Russia, no longer seems to apply as a just rule.

Instead of punishing the wealthy, provide them with the means to create wealth in which all can share should be the tone. Taking away their incentives, their motives, their tools with which to apply their talents, will not solve any problem, only create new ones.

Instead of envy, there should be praise. Instead of entitlement, a sense of gratitude. Yes life is a comedy for the rich, a tragedy for the poor, but it will be more so a tragedy without the rich. Who speaks for the 1% – we all should.

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