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Thanks to the lowest tax regime since the establishment of the modern welfare state, the wealthiest are capturing a progressively higher share of national income. Those at the bottom and in the middle are resorting to more and more debt in order to meet their financial obligations. The longer this goes on, the greater the risk of an economic crash when interest rates eventually begin to rise.
- Household debt set to rise to a huge 184% of income by 2019 according to the Office for Budget Responsibility. Independent article.
- Debt graphic from Office of National Statistics – 2008/10.
More on Inequality
- Read Oxfam’s excellent 2014 report on inequality – Working for the Few: political capture and economic inequality.
- Listen to billionaire Nick Hanauer’s warning about the threat to capitalism from growing inequality. ‘Growing inequality is about to push our societies into conditions resembling pre-revolutionary France.’
- Read Thomas Piketty’s book – Capital in the Twenty-First Century. Listen to Piketty’s TED talk here.
- Read The Spirit Level: Why Equality is Better for Everyone, by Richard Wilkinson and Kate Pickett, which sets out how inequality damages society.
- Check out the Equality Trust for a huge range of information on inequality.
Why we need to raise taxes on the wealthiest and properly tackle tax havens
- Read more at independent international campaign group Tax Justice Network.
- Oxfam’s 2015 report on why we need a wealth tax. Wealth: Having it all and wanting more recommends easing inequality by shifting the tax burden away from income and consumption and towards wealth. The argument is that investments can soar in value over a lifetime without ever being taxed, and can escape taxation again via inheritance tax loopholes, perpetuating inequality.
- New research by the OECD shows that when income inequality rises, economic growth falls. One reason is that poorer members of society are less able to invest in their education. Tackling inequality can make our societies fairer and our economies stronger. Have a look at Does Income Inequality Hurt Growth?.
- Research by former Chief Economist at McKinsey & Co suggests that in 2010 there was at least $21 trillion and possibly up to $32 trillion of hidden financial assets held offshore by high net worth individuals. If that money were brought into light and the income taxed at just 30%, this would generate tax income revenues of between $190-280 billion worldwide. Inheritance, capital gains and other taxes would boost this figure considerably. Read the report – The Price of Offshore, Revisited at the Tax Justice Network.