Super rich ‘floating free’ of society
Tax loopholes allow the super rich to “float free” from the concerns and pressures affecting the rest of society, the leader of the TUC said yesterday.
Speaking on the eve of the union organisations’ annual conference, Mr Barber called on the government to close the “loopholes” – such as non-domiciliary rules enjoyed by private equity bosses – that allow the super rich to evade paying tax.
Doing so would provide the government with the money it needs to meet its target of halving child poverty by 2010, Mr Barber told reporters at Brighton Library.
Yesterday, the TUC revealed research estimating the economic cost of poverty on the UK is £40 billion, incurred through direct costs such as ill health and the loss of economic output.
The government must counter this in order to maintain social cohesion, Mr Barber argued, pointing to the correlation between wage inequality and high crime rates across the world.
But, he warned the burden for doing so must not fall on middle earners, paid for by a higher rate of income tax.
Mr Barber said: “The old debate was mainly about whether this was morally right – or just the politics of envy. Many hard working middle-income earners feared that they would have to pay for any moves to narrow the gap between rich and poor.
“‘Today a significant group of super-rich float free from the rest of society, and think that tax is for the little people.
‘Today the rest of society pays a heavy price for the wealth gap – whether middle, low or no income.”
Mr Barber called on the government to replace non-domiciliary tax, which is open to abuse, with a test of residence.
This would “easily” raise a minimum of £4 billion a year, he added.
He continued: “There is therefore no need to increase the tax burden on middle or low-income earners to pay for it – no cap on aspirations – and much for us all to gain – as society becomes more cohesive and the economy more productive.”
Reducing child poverty would help cut crime, he argued, and stemming the £14 billion paid out in city bonuses last year would help end the “distortions” in the housing market.
Mr Barber argued for more focus on affordable housing, as well as demands for a “social house”.
He warned social mobility had declined over the past generation, describing it as “an appalling legacy of the ‘greed is good’ 1980s”.
