by In Wales
Sun Sep 7th, 2008 at 05:14:31 AM EST
Taken from a TUC Press release on the eve of their Annual Congress in Brighton;
The TUC pamphlet – Do the super rich matter? - shows that the wealthiest few in the UK now own as much, if not more, than their equivalents did at the end of the nineteenth century. This surge in wealth at the top has overturned the advances made in a century that saw the gap between rich and poor narrow as a result of progressive taxation, the growth of trade unions and regulation.
Do the super rich matter? calls for a series of policies to reverse the trend including a new minimum tax rate for those earning more than £100,000.
The TUC will say that a minimum rate of tax – which should start at 32 per cent for those earning between £100,000 and £150,000 and rise to 40 per cent on salaries of more than £200,000 – would not increase any tax rates, but would limit the tax reliefs and tax avoidance measures open to the well-off and could raise £5 billion.
We've been calling for those tax loopholes to be closed for a great length of time. Yet still the Government keeps on playing into the hands of the rich at the expense of the entire economy and any hope of genuine progess on addressing issues around social justice.
The main source of the new wealth has been the growing power of “financialisation”. The most obvious example of this is the huge profits made from selling sub-prime mortgages wrapped up in exotic financial instruments. These turned out to be near worthless and led, not just to many losing their homes, but to the credit crunch which is now causing world economic slowdown.
Soaring corporate pay has not secured any significant improvement in the nation’s productivity and innovation record. Today’s new rich tend not to have made their money by building firms and products but to be those who have taken “advantage of today’s more pro-rich culture to grab a larger slice of the cake by taking giant risks with other people’s money and ensuring someone else pays when they call it wrong”.
If the celebrity rich are excluded, most of today’s super-rich come from relatively privileged backgrounds.
So, the growth of the super rich section of society can be shown to be socially divisive, damaging for the economy, increasing inequalities and on a moral level, deeply unfair.
Can the blame for the credit crunch be put on the super rich, for their reckless risk taking with other people's money, pocketing the profits and passing on the losses?
What about the house price bubble and the difficulties in getting a mortgage or finding affordable homes?
It's about time that the trend for Robin Hood in reverse was stopped with a fairer tax system that sees better redistribution of wealth going where the money is needed.