Tax the rich was a theme raised last week at the Liberal Democrats conference in Bournemouth, UK where Dr. Vine ‘the oracle’ Cable purposed a new tax on those who earn in excess of a million pounds or more . Dr. Cable raised some eyebrows in his own party as this policy decision had not been discussed with its leader (Nick Clegg).
A report by the Brotherhood of St Laurence and the Australian Housing and Urban Research Institute showed that the Capital Gains Tax (CGT) exemption is now worth on average $10,000 a year for the wealthiest 20% of home owners according to The Australian News report.
The Brotherhood of St Laurence will today seize on the research to call for the removal of the CGT exemption on homes worth more than 1.1 million Auzzie dollars. I wondered if this was where Dr. Cable pulled his policy decision from last week?
It is with these thoughts in mind, coupled with Channel 4’s airing of Piers Morgan’s visit to Barbados to interview Sir Cliff Richards in his £14 million hideaway pad in the lush surroundings of Sugar Hill that got me to thinking about this issue in its broader remit and context.
According to a report from the World Institute for Development Economics Research at the UN University, the richest 2% of adults in the world own more than half of all household wealth, based on research institute’s findings. Also, the report states, that the poorer half of the world’s population own barely 1% of global wealth.
Amidst the backdrop of taxpayer bailouts of banking and insurance institutions –the top [25] Hedge Fund and Investment Managers made a staggering £8.275 billion or an average of $464 million (£331m) each in 2008, according to research by Alpha Magazine while the top 10 richest politicians in the world last year were collectively worth $126.124 billion. A recent report also showed that the richest 1% now gobbles up 15% of the world’s annual income, up from 5% in the 1980’s.
So Hollywood glitterati, merchant & investment “banksters”, CEO’s, CFO’s, lawyers, surgeons, celebrity preachers and the high-end specter of capitalist sharks continue to amass wealth at an exponential rate.
But what does all this have to do with Barbados?
Actually, it is quite simple – do the rich celebrities and others who occupy our prime land and real estate, pay their fair share of taxes or do they continue to live high on the hog without any real fiscal or tax accountability because of who they are?
According to Gordon Matthews writing in the Nation Newspaper a couple weeks ago remarked that developers were paying millions of dollars for coastal land and this was causing an inflation in the value of surrounding plots. A Barbadian government worker also said, “We are not a tax haven. Barbados is a low-tax regime…”
Research suggests that there is no real tax on wealth in Barbados – at least in the narrower quartile of that 1.5% to 2% who basically live the lifestyles of the rich and famous. A person with a net worth of $100 million who earns $100,000 in a given year pays the exact same amount of taxes as someone with a net worth of $200,000 who earns $100,000 in that same year.
If neoliberal politicians wish to slap a tax on the rich, then why don’t they?
They should be practicing what they preach and slap a wealth tax on the likes of the royal family members, Oprah, Tiger Woods, David & Victoria Beckham, Sir Elton John, Sir Cliff Richards, Tony & Cherie Blair, Sir Mick Jagger, and the whole host of rich folks who occupy prime real estate property at Sandy Lane, Royal Westmoreland, Port St. Charles and wherever the nouveau riche occupy areas of Barbados for their individualistic pleasures.
The government of Barbados strapped for cash (and I am sure Errol Barrow would be proud of this piece of social policy) should legislate a wealth tax on properties over and above the 1 million dollar mark with the percentage rising according to the upper quartile value of the property.
When as a small society of 270,000 people (or thereabout), we factor in the salaries and wages, dividends from investments, capital gains, corporate income and the government’s take on its investments and the taxes which are paid from the above – the shock statistics is that a tiny minority of super-rich folks who occupy our country for a few months in a year if so much, pay less in taxes due to loopholes than the 90% who are paying tax from earnings, investments and property. This also applies to “offshore” banks and other institutions that use our system as a pipeline to funnel monies around the world at the touch of a button.
Is the 21st century paradigm of class warfare being fought in the trenches of economic uncertainty where the middleclass survival is being crushed as the rich become richer and the poor become poorer – leaving just the two tiers?
The answer is unequivocally –“YES!”
Was it not the enigmatic Lord Denning who made the infamous statement some 40 years ago that tax avoidance was legal but still not moral?
While others argue that for most of us (excluding the “RICH”) that the difference between avoidance and evasion is really the thickness of a prison door – these lines as recent current affairs have proven are becoming increasingly blurred.
If the “oxymoron” of government perpetrating this idea that the “TAX CODE” is meant to be based on “fairness and efficiency” – then why are so many rich folks able to slip through the net and not pay their fair share?
If nothing concrete has come out of our deepening economic crisis is the fact that vast swathes and concentrations of economic wealth in the hands of a minority of rich folks is not only inimical to the tenets of free markets or to the pillars of democracy which hold ups the fragile structure of post modern politics. Moreover, it is a subtle form of modern tyranny where the “haves” live in luxurious splendor and the “have-nots” continue to eat the bread the devil kneads.
No one is in denial as to the squandermania created by governments and how they use our tax dollars. This is where an assault in the public square for greater accountability is needed. However, there is open season and we can all recount too many instances of impropriety where our tax dollars are literally thrown down a bottomless hole. That must change – at any cost!
The failures of the markets after the 1929 meltdown resulted not only in a Great Depression but in people in Central Europe and Asia turning away from democratic institutions and ideals fought for during World War 1.
Less than 100 years later, the world is once again at the same crossroad, where out of the abyss looms the specter of protectionism, dwindling resources, an ever increasing chasm between rich and poor and the rehashed ideologies of the past ruminating to once again take center stage. America and Western democracies had a brush with the two evils history has so vividly portrayed.
Nothing is black or white anymore. The super-rich have run the wheels off the wagon of the financial system and we have had to be the blacksmiths to repair the damage. Surely it’s time to address their anti-democratic overlord-ship of the entire economic system and have rich folks be accountable and pay their fair share.
The blogmaster invites you to join the discussion.