Tuesday, November 25, 2008

The Strange Logic Of The Rich

It is not often that I defend the New Labour government, and I think yesterday's budget announcement falls pathetically short of what is really needed, but the criticisms from various fat cats has made me feel almost defensive of Brother Darling.

The cut in VAT is A Good Thing, albeit a very small Good Thing. VAT is a thoroughly regressive tax, as not only does everyone pay it at the same rate regardless of their wealth or income, but the lower your income, the greater proportion of that income you spend on VAT-taxed goods. The poor pay more. VAT should be scrapped altogether.

Anyways, there is no guarantee that you or I will notice the VAT cut, if shops choose to keep prices the same and trouser the tax cut themselves. Bourgeois ideologues would have us believe that the discipline of the market and the rigours of competition (actually, aren't those phrases from New Labour's Clause 4?) would ensure that prices will fall, but the market has not exactly covered itself in glory of late, has it?

I have just watched a city geezer on the telly scoffing at the VAT cut, pouring scorn on the idea that anyone would even notice saving "36 pence on a £20 sweater". Clearly, he's a bloke who does not need to take care of the pennies so the pounds take care of themselves - unlike lots of people. So good on the BBC interviewer who retorted, "Well, you're used to talking in millions and billions - and that's just your expenses!"

There has also been dismay at the prospect of extra tax on incomes over £150,000 - mainly from those on incomes over £150,000. The main characteristic of these whinges has been the reservation of arguments for the rich that they would never allow to be wasted on the working class.

"It's a disincentive: why should I work harder if I would only have to pay more tax?", whined a wealthy businesswoman on Radio 5 yesterday. By that logic, cleaners, teaching assistants and numerous other low-paid workers would not even bother getting out of bed in the morning (or, often, in the middle of the night) to go to work at all, would they? Clearly, low pay is a great motivator for the low paid, riches a great motivator for the rich. Glad we've got that straight.

The next, and somewhat breathtaking, whine was from a posh bloke who argued that there is no point taxing the rich because they will just find ways to avoid paying the tax bill - indeed, the government could lose, rather than gain, income! That logic is so brilliant that I think we should extend it to everyone. We shouldn't charge Council tenants rent because they will just find ways of not paying it. Shops shouldn't charge for any goods because people will just find ways to nick them. We shouldn't make kids go to school because they will just find ways to skive off. We shouldn't have laws because people will just find ways to break them.

The rich seem to believe that they are subject to different rules, and even different logic, from the rest of us mere mortals.