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The issue I first became seriously politically active over was opposing the poll tax (offically called the Community Charge) – a flat rate tax for local services, albeit 20% for students and unemployed people. I was convinced that mass non-payment of the poll tax would succeed, because many people would not be able to afford it and many others would recognise it as unfair and unjust and would refuse to pay in solidarity. I got involved in the anti-poll tax campaign in the run-up to the TUC demonstration in Manchester in 1989, to mark the point at which the tax was introduced in Scotland on the 1st of April, and joined the Militant Tendency on the 6th of June 1990, when that revolutionary socialist organisation proved it was serious at defending people who had refused to pay. Four chapters of my autobiography “Transition” are devoted to my experience of that campaign.
The Tories replaced the poll tax by the council tax, which is still unfair but does bear some relationship to ability to pay. The fairest system of local taxation would be one that is roughly proportional to income, i.e. a local income tax. The precise details could be debated, including whether richer people pay a higher proportion of their income than poorer people (but even if they do not, it would still be much fairer than the poll tax or council tax). It is a policy put forward by the Liberal Democrats, but they hardly ever mention it and when they do, they usually do not argue convincingly for it because they are a party of big business like New Labour and the Tories. I even heard one of their leaders recently say it would benefit everyone, when obviously it would attack the rich!
Liberal Democrat leader Charles Kennedy pointed this fact out in his budget response on the 16th of March 2005, as reported by Simon Carr in his Sketch in the Independent the following day.
In the second live TV debate between Senator John Kerry and George W Bush, Kerry pointed out that Bush had granted 85 or 90 billion dollars of tax cuts to those earning over $200,000 a year, and promised to take that tax cut back, i.e. to tax the rich. More importantly, Kerry pledged to close all tax loopholes! It is well known that rich people and big corporations employ expensive accountants to avoid paying the levels of tax that governments have decided they should pay. As soon as a tax loophole is found, it should be closed (very quickly to avoid other rich people from taking advantage of it), putting the accountants out of work and making the rich pay tax. Visit my “close-all-tax-loopholes” group.
In Labour's determination not to increase levels of income tax, they have increased a much less unfair form of taxation: national insurance. It is more unfair because it stops at a certain level of income, unlike income tax. It should be abolished, merging it into income tax rates so that the rich do not get away with this give-away.
Taxing the rich can never work in the UK on its own, because big companies will relocate their factories overseas, and rich individuals will move to tax havens. If any company does try to relocate, their factories should be nationalised (only compensating small shareholders and pension funds) and then run democratically from below. In the long term, we need world socialism to overcome the problems of capitalism here and abroad.