Tax the rich (more)

Tax the rich (more)

24 Jun 2008

The panel, under chair Evan Davis, debate whether imposing higher tax rates on Britain's highest earners would be an appropriate solution to increase revenue for the state.

Arguing in favour of the motion are John Kay, Polly Toynbee, and Anthony Hilton.

John Kay is first to speak in favour of the motion. He refers to an increasingly unequal distribution of income and the considerable decrease in tax-rates for the wealthy. He stresses that wealth carries obligations and demands higher tax rates to ensure that the wealthy cannot eschew their responsibility. Polly Toynbee wants to see the tax rates for the top earners increased and argues that the top 10% earners are well able to pay more tax. She recommends redistributing the money in order to enable the lowest earners to avoid paying tax. Anthony Hilton strongly challenges the argument that lowering top tax rates will lead to an increase in tax revenue as there is no evidence to back-up the Laffer curve, which is the hypothesis underlying this theory. He calls for top tax rates to be higher, not least because the state needs the money.

Arguing against the motion are James Bartholomew, Lord Anthony Jacobs, and Kelvin MacKenzie.

James Bartholomew is fist to speak against the motion and gives evidence that increasing the top tax rate would lead to a considerable decrease in the contribution of the rich to overall tax revenue, and would damage economic growth Anthony Jacobs questions the structure of Britain’s progressive tax system, as the progression is not significant if indirect taxes are considered. He announces a win-win situation for both parties, the rich and the poor, by presenting a new tax plan which would be revenue neutral to the state. Kelvin MacKenzie accuses the government of wasting tax income and emphasises that there would be no need for further tax income if the existing funds were spent more efficiently.

First Vote: For 248, Against 338, Don’t Know 170

Final Vote: For 265, Against 384, Don’t Know 50

The motion is rejected by 119 votes.