Families on lowest incomes subsidise the lives of the rich
THE PROBLEM
Three million children today are living in poverty. Children born to the poorest families suffer little or no social mobility. Successions of governments, of different parties, can't change this due to the tax system.
Are politicians to blame?
The biggest scam in history was instigated on the people centuries ago by the Lords, Barons and Knights of the land. Governments used the tax system to milk the poor. The injustice has never been put right.
Why did the Lords, Barons and Knights do it?
To enrich the people who own land. It is operated by all democratic governments around the world. The biggest winners are those who own land or homes in the best locations.
People who rent pay rent to landlords and taxes to the government. People who rent pay taxes to fund the service that they receive: police, rail, roads, army, etc. That sounds fair. They pay for what they receive.
Britain's top earners pay on average £1.25 million in taxes in their lifetime. The people who rent their homes are generally in the lowest income bracket. Over their working lives the poor pay over £0.25 million in taxes. The rich on average pay 5 times more in taxes.
That sounds fair. Doesn't it?
Income tax is the more you earn, the more you pay. Called Progressive taxes. Sounds fair as the richer pay more. But!!! Progressive taxes has exactly the opposite effect.
Rich people complain that they pay a lot of money to the government. But, the government pays it all back to them.
How do they do this?
Governments spend our tax money on infrastructure, such as:
- Schools
- Universities
- Hospitals
- Rail networks
- Roads
This infrastructure raises the productivity of the economy resulting in economic growth. Because of the way the market economy works, those economic gains are crystallised as land values. Then these gains surface as windfalls or capital gains in the property market.
Those capital gains are not shared out equally amongst all of us, as the taxpayers who rent their homes for example, are excluded. The windfalls are pocketed by people who own land. The rises in property values more than offsets the taxes they pay into the public purse.
Then who pays for the services the rich people use?
The families on the lowest incomes.
Every increase in house value for top earners offsets any tax they contribute. During boom times it's possible to claw back a lifetimes taxes in just three years. Meanwhile...the lowest earners and those who pay rent, pay more overall.
Families on the lowest incomes subsidise the lives of the rich.
Is that fair?
There is only one way to make the tax system fair. Parliament has to tell the taxman to stop collecting taxes from people's wages.
We need a kind of tax reform that Winston Churchill and Lloyd George nearly introduced in Parliament 100 years ago. But, the landlords blocked them.
The only war Winston Churchill lost was the war against the British landlords.
If we cancel the tax on people's wages, how do we pay for public services?
By levying a charge on the value of land. People who live in valuable locations will pay much more than those who live in less expensive properties. That's fair. It also happens to be the most efficient way to fund the service we all share in common.
THE SOLUTION
There is a simple solution to this injustice.
- We should place the cost of public services on the values of land.
- Remove Income tax from people's wages.
- Owners with houses in valuable locations would pay more than those who rent their homes.
- Owners with houses in valuable locations wouldn't be able to claw back their taxes.
That way everybody pays for the services they receive and we are all treated as equals