There was an interesting juxtaposition of news in the headlines recently. On the one hand, research from Daycare Trust and Save the Children highlighted the stark impact that cuts to childcare tax credits are having on working parents, particularly those on the lowest incomes. On the other, a letter to the Financial Times from a group of economists called on the Chancellor to remove the fifty pence top rate of income tax - ostensibly to 'boost growth' by preventing wealthy individuals from leaving the country to avoid paying it.
This got me to thinking. In the wake of last month's riots, among the acres of newsprint it was frequently commented upon that many of those who rioted didn't feel a part of their local community; and that they were in some way alienated from the "social responsibility" and "sense of belonging" (the Prime Minister's words) that we expect from all members of society. But to what extent are we demanding that same social responsibility from those in the top income bracket, those who are - for the moment at least - being asked to contribute 50p in every pound earned over £150,000? For this is not just their designated contribution to deficit reduction, but the most straightforward way of contributing to - and being a part of - their (our) community and society.
And if - as those economists warned - some of those wealthy individuals are indeed considering leaving the country (or pursuing one of the myriad other tax avoidance options available to them), where is the public debate and political will to engender their re-connection with their local community? While much has been said about how those who rioted felt separate from their communities, to what extent is this also true for those who earn the most in society? Think about it - if you earn over £150,000 a year then you have the option to go private rather than use any of your local services, whether that's the local library, school, hospital or children's centre.I'm not for one minute suggesting that all of those at the highest end of the income scale seek to avoid paying their designated income tax contribution - far from it. Indeed, many in this group do pay their fair share. Harry Potter author (and Gingerbread President) JK Rowling, for example, has made a point of staying in the UK for tax purposes, explaining that
"I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain's; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven".
In this context, surely the question should be not whether any of those eligible to pay the highest tax rate will or won't leave the country? Surely the question must be whether politicians have the stomach to demand the same degree of commitment to their community and society of this group as they do of the rioters, which by definition would mean staying and paying that tax?As David Cameron spelled out in his post-riots speech,
Exactly so. Which is why the government must continue to send out clear signals that paying their fair share is exactly how the wealthiest in the country are expected to demonstrate their sense of belonging to their local community, and that we are indeed all in this together.
"People's behaviour does not happen in a vacuum: it is affected...perhaps above all by the signals government sends about the kinds of behaviour that are encouraged and rewarded".
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