Monday, January 31, 2011

Tax the rich

Hot on the heels of evidence that voters are keen to see the wealthy pay more tax: according to polling by YouGov (reported here), "49% think the top rate of 50p should be made permanent, 33% think it should eventually be brought down. 51% would like to the see the threshold for the top rate brought down to £100,000, 29% would oppose this".

At the same time, evidence is coming out that some of the tax and benefit changes brought in to deal with the deficit could end up penalizing middle- to low-income groups heavily, with some households facing effective marginal tax rates of up to 83%, according to the IFS.

This creates a big political opportunity for someone to build a coalition of middle and low income voters in favour of a fairer tax and benefit system. Of course, reforming tax laws is politically risky, but on the back of a desperate recession and a strong feeling amongst most voters that the whining bankers have got off lightly, there has rarely been a better time to start arguing for radical redistributive reform.