Having had more time to digest last Wednesday’s Budget it is clear that Chancellor Darling’s speech only skimmed the surface. The detail of the small print reveals that this politically motivated and electioneering Budget is extremely nasty and divisive. It is all about pandering to the base instincts of the rabid Labour supporters and satiate their jealousy of the rich. In Labour terms that means anyone earning over £40,000. Brown and Balls seem to have prevailed over the Blairites. The aim of their election campaign will be to consolidate their traditional vote instead of appealing to middle-England. They sense that there will never be a better time to soak the ‘rich’ as they are blamed for our present financial and economic woes. Portraying themselves as class heroes, by adopting the garb of Robin Hood, they can rob the rich to give to the poor. This is like the Roman Emperor diverting attention from the decline and fall of the Empire by throwing the Christians to the lions.
Before the Budget it had already been decided to put 34,000 people earning over £150,000 into a new higher 50p tax band. But in addition to this we now know that those earning over £100,000 will have their personal allowance phased out so that by £113,000 all income is taxed. This will affect 100,000 people. That is the nasty vindictive bit, compounded by the means testing of benefits, which means that they get no return for their contributions. Payment of income tax would claw some of the benefits back, but the principle of fairness has been breached. This is important because if the tax system is to work without evasion and avoidance, it can only work by consent.
If we go further down the earnings ladder there is more discrimination. All income tax band thresholds have been frozen, meaning that people will drift in to paying more tax. People who previously did not pay tax at the 40p rate will do so in the future, but this will be accelerated because the 40p band threshold will also be frozen at £37,400 up to 2013. About 700,000 middle earners are being targeted for discrimination. The only consolation is that MPs and Ministers will be affected, but not much. In fact, if they wanted to identify themselves as working class you would have thought that they would have set the 40p tax band threshold at £70,000.
There is already a group of 1,000,000 people who have been left worse off by the increase of the 10p tax band to 20p. So at the bottom, middle and top of the income levels there are substantial numbers of tax payers who feel that they have been unfairly targeted. The middle earners over £40,000 will have their threshold frozen longer than those under that figure. Those at the top do not get a personal allowance in the future. Is this what the Labour campaign slogan really means – for the many not the few? Does this approach serve the Common Good? The tax regime relies on people being willing to pay for those who are too poor to provide for themselves, and requires progressive taxation where the wealthy pay more and some people pay less. Solidarity is essential.
Resurgence has formulated its taxation proposals based on Catholic principles. Catholic social teaching offers an understanding of our relationship with the world and others. This relationship includes political and economic matters. What is often missing from debates about taxation is a moral context. At the core of Catholic teaching are the concepts of fairness, justice, dignity, and respect for persons; all of which, in different ways, bear on any consideration of the place and morality of taxation.
Taxation is a contribution to the Common Good, representing the shared commitment of citizens to building up a just and healthy society. Taxation is neither a burden nor a necessary evil, but, as a positive contribution to the Common Good, it is a responsibility of citizenship. In practice, of course, the different ends to which taxes are put and the different forms which they take must be examined in detail to ascertain whether these taxes are beneficial and equitable. There is a wide range of public services, which are funded through taxation, and the quality of these services is related in part to the level of funding they receive and the overall levels of taxation to support such funding.
Catholic social teaching also states that there is a need to support a level and type of taxation that will promote the Common Good. Taxation touches our lives in many ways. Consideration has to be given not only to how much we pay in tax but what is provided out of taxation. We cannot in conscience condone spending for immoral purposes. Taxes and our attitudes towards them define, in a profound way, what kind of society we want to live in.
Resurgence has set out its position in the Party Programme:
A market economy must not deny any citizen access to the essentials for playing their part in society. A fair market economy will also be inclusive to encompass free enterprise; private, mutual or public ownership; moderated to the extent that State intervention may best secure and serve the best interests and dignity of the individual citizen.
All economic principles, mechanisms and methods are secondary and subject to the development of the human person and the Common Good.
Pope Pius XI stated, “It is the function of social justice to require of each individual that which is necessary for the Common Good.” and “The Common Good of a society cannot be provided for unless each individual member, a human being endowed with the dignity of personality, receives all that he needs to discharge his social function.”