Boris Johnson plans to spend billions to help the rich get richer

Boris Johnson
Fréa Lockley

A new report from an independent thinktank has found that Boris Johnson’s “desire to radically overhaul” the tax system will cost us billions of pounds every year. And it will only benefit the very richest people. It also seems confirmed that Johnson hurtling the UK towards a no-deal Brexit is down to pressure from billionaire investors.

The rich get richer

On 27 September, the Institute for Fiscal Studies (IFS) reported that Johnson’s proposed tax changes are:

big – and costly – reforms, both of which will predominantly help those in higher-income households.

As the IFS noted, Johnson’s proposal to raise “the higher-rate income tax threshold” is:

a substantial and expensive tax cut from which only those on high incomes would gain.

As Business Insider reported, overall these plans “would cost the government up to” £20bn but only benefit the rich. In addition, these cuts also remove billions from the economy. Shadow chancellor John McDonnell slammed the plans, saying:

These proposals… will rip out £10 to £20 billion a year from our already decimated public services… and put those billions into the pockets of the rich.

This government cannot be trusted with our public services – only a Labour government will end austerity and establish a fair tax system that serves the many, not the few.

As he also noted, these plans mean the rich get richer:

So, as Jeremy Corbyn quite rightly pointed out, there’s another knock-on effect of these proposals:

Disaster capitalists

Yet, this isn’t the only way Johnson’s benefitting the billionaires. As The Canary reported on 26 September, his sister Rachel Johnson said that Johnson’s current political strategy could be the result of pressure from:

people who have invested billions in shorting the pound, or shorting the country, in the expectation of a no-deal Brexit.

On 28 September, former chancellor Philip Hammond also seemed to confirm this story in the Times:

McDonnell, meanwhile, called for further investigation:

As Carole Cadwalladr also noted, this isn’t a new story either:

And as one Twitter user stated, Johnson truly is a “stooge” for disaster capitalists:

Taken alongside Johnson’s proposed tax cuts, the Conservative agenda becomes clearer than ever:

So it’s clearer than ever quite how important the next general election is. This is our one chance to make sure that we rise up, unite, and elect a Corbyn-led government. Because if we don’t, the gloves are well and truly off to protect the richest elites. Meanwhile, the past nine years of Tory-led austerity may almost seem gentle in comparison to Johnson’s brutal plans.

Featured image via ©UK Parliament / Jessica Taylor

We need your help ...

The coronavirus pandemic is changing our world, fast. And we will do all we can to keep bringing you news and analysis throughout. But we are worried about maintaining enough income to pay our staff and minimal overheads.

Now, more than ever, we need a vibrant, independent media that holds the government to account and calls it out when it puts vested economic interests above human lives. We need a media that shows solidarity with the people most affected by the crisis – and one that can help to build a world based on collaboration and compassion.

We have been fighting against an establishment that is trying to shut us down. And like most independent media, we don’t have the deep pockets of investors to call on to bail us out.

Can you help by chipping in a few pounds each month?

The Canary Support us
  • Show Comments
    1. ‘Boris Johnson plans to spend billions to help the rich get richer’?
      At first glance such a headline, even to the staunchest of socialists, would appear completely ridiculous just as to the most rabid of the Remain rump would find a headline such as ‘Benn the Bomber is out to highjack Brexit with his hilarious Hilary Bill’.

    2. Reduction of personal taxation rates goes hand in hand with assumption of retaining more income offering incentive for greater productive output. Depending upon the nature of beneficiaries, there may be truth in that.

      Yet, the concept of diminishing returns applies both ways in the argument. On one hand, increasing tax rates to some segments of the income/wealth distribution may result in diminishing productivity and negligible additional revenue; on the other hand, reducing tax rates for some segments may have no effect on productivity and also diminish communal income arising from taxation; whether at the top end of incomes lost direct revenue is offset by VAT extracted from spending on luxury goods is moot.

      It may be reasonable to assume that beyond a certain level of income, bonuses, and perquisites, none, other than financial psychopaths, feel motivated to work harder.

      Between 1939 and 1980, the top rates of US Federal personal income taxation ranged from 70% to 94%. Obviously, detailed comparisons over time of the impact of these rates ought take into account allowances, tax breaks, and propensity for evasion.

      In the UK top rates during 1979-2003 were 98% (unearned income), 83% (earnings), and diminishing to 40%.

      Currently, top UK rates are 40% on earnings between £46,351 and £150,000 annually and 45% on earnings higher than £150,000.

      Earning between £46,351 and £150,000 are the range into which much of the higher professional class falls. They don’t betoken acquisition of immense wealth or offer prospect of sybaritic life-styles akin to those of the Windsor family, the Westminster family, the Blair dynasty, and smaller fry like Rees-Mogg and Johnson.

      Setting aside the despicable rentier component of wealth generation leaves a considerable number claiming to be entrepreneurs and indispensable CEO employees of the shareholders of banks, and large corporate entities. Given astronomical heights these salaries/perks have risen to, even within privatised industries, since Mrs Thatcher introduced neo-liberal doctrine, it’s most unlikely they correlate strongly with aptitude or productivity.

      Thus reductions in personal taxation for this self-proclaimed elite, well in progress to pulling up the drawbridge behind itself, will benefit the society within which these people are embedded, and which implicitly consents to their activities, not one single jot.

      A long way above the band of mere CEOs, ‘celebrity’ entertainers, and the likes of Johnson, Rees-Mogg, and many others who these days are only ‘very well off’, may be found the true wealth elite, much of it based on dynasties or busily forming them (e.g. Clintons). They live in rarefied atmosphere where taxation is an avoidable irritation. Through buying political influence they ensure policies endangering their collective hegemony either don’t come into being or are stillborn. Although neo-liberalism has catapulted many odious individuals lacking conception of noblesse oblige into positions of immense power/influence, the basic structure of society is as it always was. Neo-liberalism has stripped away some hard won concessions to decency gained by popular movements during the last couple of centuries.

      Johnson, and similar in the UK and elsewhere, have no conception of where they and their families truly reside in the hierarchy of wealth and influence. They don’t grasp that however much they try to expand their wealth they cannot match the rate of increase open to the true wealth elite, their masters. They may maintain relative wealth for a few generations but ultimately they are destined to join the rabble they despise (admittedly for good reason among the more cultivated of their number).

      Now we face prospect of a government as radical and dynamic as that of 1945 there is opportunity to take back the discarded notion of ‘society’. Taxation reform is a key facet of progression. There is such immense wealth created by our technological society that subsistence existence, the lot of many, may be banished. Major societal infrastructure change can be financed through extraction of extant, yet sequestered, wealth held by the dynasties and associated rentiers. Maintenance of the new order would arise from more equitable distribution of generated national income.

      There seems no reason why the UK, preferably still in the EU, could not introduce universal income (with knock-on savings to welfare payment management), reduce the standard rate of tax (else increase allowances) and win over the professional middle class by subsuming the 40% tax band within the standard rate. It ought be recognised that there are people capable of making valuable contribution to society who are strongly motivated by material acquisition. Thus people currently earning more than £150,000, a modest sum in the greater scheme of things, should not face an impenetrable wall of capped income.

      ‘Progressive’ taxation can be organised differently. We have the technology to do so. Instead of fixed tax bands (in all matters relating to personal taxation including such as housing stamp duty and gift/death taxes) there could be formulae (algorithms) set, and open to alteration by the Exchequer, whereby tax take increases in continuous, rather than discrete banded manner, in accordance with increase of the taxable sum. It can be set to run from zero to 100% and its rate of increase as taxable sums increase need not be linear; perhaps sigmoidal shape has appeal: slow increase from zero followed by a broad swathe of linear increase and then gradual asymptotic increase to the maximum rate. In other words, each additional pound of income/wealth is taxed at its own unique rate. All that is well within the scope of computer technology held by HMRC, accountants, and individuals.

      The principal obstacles to developments discussed here rest with the quality of MPs, the manner in which the Commons does its business, the aptitudes and probity of government ministers, and the imagination of supporting officials.

      —–

      Released under the Creative Commons Attribution 4.0 international license (sic).

      —–

      Author’s email: atlanticcouncil@protonmail.com

      —–

      Bitcoin appreciation to:

      1Kz9AteVKnt3xb4wfDtAZH2DhnU3dy1Wkt

    Leave a Reply

    Join the conversation

    Please read our comment moderation policy here.