The Edge

Richard Northedge takes on corporate finance

The better-off already pay an unfair share of taxes

The rich should pay their fair share of taxes, says Britain’s prime minister as he seeks popular support.  Yes, but the rich should not have to pay more than their fair share and they’re already doing that.

David Cameron has rejected the LibDems’ demand for a mansion tax on properties valued at more than £2m, but the Conservatives have nevertheless embraced the idea that the rich are there to be bashed. It is a perverse political philosophy that seeks to punish people for doing well: it implies that being rich is wrong.

The party conference season provokes politicians to promote some wacky policies, but while chancellor George Osborne rightly describes a mansion tax as the politics of resentment, the Tories are now clearly as determined as the parties of the Left to squeezing the successful.

Already the top 1 per cent of earners pay a quarter of all income tax. The top 10 per cent pay more than half. That’s after evasion and avoidance – which the coalition government ought to crack down on. But high earners also pay more VAT, more capital gains, more inheritance tax and more stamp duty as well as higher council taxes.

More than half the population take more out of the public pot in benefits that they contribute in taxes. Claiming that the rich are not paying their way is inaccurate: they are paying their own pay and paying for others too.

Taxes should pay for the benefits that payers receive from the state – not be a penalty for earning more. High earners already pay tax on more earnings and at a higher rate. Yet they do not receive proportionately greater benefits.

Cameron is wrong to play to the majority by saying the better-off do not pay their fair share. Most are already paying far greater a share than anything that could be described as “fair”.

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