Article
Economics
Politics
1 min read

How can taxes build a better society?

As we await Rachel Reeve's budget announcement, Laurence Fletcher wonders what positive tweaks can be made to our economic system.
kelly-sikkema-wgcUx0kR1ps-unsplash.jpg

Few doubt that Chancellor, Rachel Reeves, will be putting up taxes when she presents her first Budget on October 30. The political narrative of recent months has very much been of an alleged fiscal “black hole” of £22bn - or is it £40bn? - that somehow needs to be filled.

While the size of the shortfall and the identity of those responsible are both hotly disputed, and despite a lack of detail from the Treasury about what it actually consists of, the questions now being asked are not whether taxes will rise but which ones and by how much. 

Months of speculation have focused on employer National Insurance, capital gains tax and freezing income tax thresholds as areas that Reeves could look to for the additional revenue. But beyond the immediate issue of raising enough revenue to make good any shortfall, lies a deeper, trickier question about the way in which taxes should be levied for the good of society. If a government is to force people and companies to hand over their money, then what is the most ethical way to do this? Who should pay and who shouldn’t? How can tax be used to reduce inequality and build a better society?

Answering such questions is, of course, far from straightforward, because there are plenty of other factors in play.

For instance, some taxes are surely levied because they are simpler to collect. Take income tax - an unpopular measure introduced in 1799, then abolished before being reintroduced as a supposed temporary measure. It could certainly be argued that taxing people’s income - their attempt to get on in life and improve their lot in life - is less “fair” than taxing wealth that has been accumulated by someone’s ancestors years ago. Working hard and earning income is often surely a way of breaking down class divisions. But income tax - contributing 28 per cent of UK government tax take in 2023-24, according to The Institute for Fiscal Studies - has the advantage that it is relatively difficult for the average worker at a UK company to avoid it. Ease of levying it is surely a driver. 

Equally, some taxes that might seem “fairer” have deliberately not been levied because of the difficulty in collecting them, and/or because to try to do so could be counterproductive. A wealth tax, for instance, would be “economically damaging”, according to one of the UK’s highest profile tax experts, Dan Neidle. Or take the politically contentious issue of non-doms, a colonial era tax break allowing rich foreigners to avoid UK tax on overseas income. It would be fairer, the argument goes, to tax them on the whole of their income. If they are going to be resident in the UK, then surely they should be taxed like a UK resident whose home is here?

Former Chancellor Jeremy Hunt abolished this regime earlier this year but left a number of concessions that the incoming Labour government pledged to abolish. But non-doms are tax-sensitive and highly mobile, and a number of jurisdictions compete to attract them. Many are entrepreneurs and wealth creators that many countries need. Reports have suggested a clampdown could raise no money or even cost money and could drive people away.

So what can be done to use tax in an ethical way? Paul Williams, research professor of marketplace theology and leadership at Regent College, Vancouver and chief executive of the Bible Society, takes a perspective that he believes offers some solutions.

He takes as his starting point a story in the gospels, where Jesus is asked whether people should pay taxes to Caesar. The question is a trap - either Jesus gives his backing to taxation that is highly unpopular with the Jewish people, or he rejects the tax in an act of rebellion against the Romans.

Jesus replies that they should “pay to the Emperor what belongs to the Emperor, and pay to God what belongs to God.” We are to pay our taxes to those in authority, but we are also to honour God.

While Williams believes that too much emphasis is placed on the Budget and political parties’ promises to be able to fix everything, and that a more radical rethink of our economy is required, he also sees room for positive tweaks to the current system.

One key area is the property market, the manifestation of so much inequality in society, with some people owning multiple houses while others cannot afford to buy one. Williams argues that the ready availability of debt finance has allowed those who already hold assets to easily acquire properties, turning real estate into an investable asset class to the detriment of many of the poorer in society.

“The reason there’s so many homeless people and empty houses is due to debt finance. It makes it easy for a relatively small proportion of the population to acquire a large percentage of the assets.

“The system has allowed a structure in which a small advantage in the beginning can lead to big, big differences over time.”

Williams highlights parts of Devon and Cornwall that have been “completely ruined” by wealthy people from elsewhere buying second homes that used to belong to locals, leaving property out of reach of anyone who lives and works there.

Nevertheless, he believes taxation can be used in this area to help level the playing field.

He proposes a “pretty punitive” marginal rate of tax on ownership of more than one home. (Stamp duty only partly does the job and is a blunt instrument also affecting people moving homes, thereby makes mobility expensive).

“You want to disincentivise the way the housing market is used for speculation,” he says.

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.”

Buy-to-lets, meanwhile, are better than having empty second or third homes, but “wouldn’t it be better if occupiers could buy that house?” he adds.

Meanwhile, research by the Financial Times recently found a huge wealth gap between the average millennial and the top 10 per cent of millennials, who are benefiting from family wealth to accumulate substantial housing assets. 

So would increasing the rate of inheritance tax - one of the most hated of taxes - and/or lowering the threshold also help reduce some of this inequality? After all, how is it fair that one child in the UK is born to inherit large property wealth while another is born to inherit little or nothing? Or, even worse, that second child will only ever be able to afford to be the tenant of the first, paying them rent for the rest of their lives? Williams is not a fan of inheritance tax per se, arguing that it is “not part of the package” in a Biblical image of a flourishing economy. But he adds an important caveat: “the playing field is not level".

“There might be circumstances to impose a one-off tax on the very wealthy… if you want a transition to a more equitable society.”

Such steps are not easy to take. It is, he admits, probably “career suicide” for a politician to adopt such views. But if we are to take steps towards a fairer way of life, and avoid a two-tier society in decades to come, then maybe the conversation needs to shift this way. Perhaps the Budget could be the time to start.

 

Review
Culture
Film & TV
Politics
War & peace
6 min read

Bonhoeffer: how to rouse a deaf world to moral action

Comparing today to the past is risky, a new biopic helps us do it well.

Theodore is author of the historical fiction series The Wanderer Chronicles.

A man dressed in 1930s clothing, sits with others at a table looking pensive.
Angel Studios.

Historical analogies are a dangerous, and often inaccurate, way of interpreting the times in which we live. “This is just like that” has a habit of making us react and respond to “that” - which we think we understand so well - when really, we should be taking time to appreciate the nuances of the problems which “this” uniquely poses us now. 

That said, I don’t suppose ever, in the last 80 years, have analogies abounded in our media with such ubiquity that we find ourselves in a historical moment facing similar threats to our freedoms and way of life to those arising across Europe in the 1930s.  

Thus, the movie Bonhoeffer, Todd Komarnicki’s fantastic new biopic of the dissident German theologian and Christian martyr, appears to come at an opportune moment in our culture. 

As writer and director of this two-hour-long epic, Komarnicki’s admiration for his subject shines through like a faithful sun breaking through an overcast sky. And whether you are a Christian or not, there is undoubtedly much to admire in Dietrich Bonhoeffer’s life and the way he lived it. 

It's a story worth hearing - which, given its Christian overtones, still has the power to break out of the boundaries of Christian sub-culture to a wider audience, with its message of courage in the face of overbearing evil.  

Born in 1906, Bonhoeffer was still a young man when Hitler and his newly formed Nazi party rose to power. He trained as a Lutheran pastor, was an accomplished theologian, and became a key founding member of the Confessing Church – the remnant of the German church who did their best to withstand Hitler’s ideological take-over. (For which, many paid with their lives.) By the early 1930s, Bonhoeffer had already perceived the dangers which few others in the German church seemed able to see or else willing to call out. And after abandoning a short stint of study in the US, he returned to his native Germany to do what he could to call the church back to herself before it was too late. No easy task. 

x

A close up of a 1930s man wearing wire-rimmed glasses, looking pensive.
Dietrich Bonhoeffer (colourised).

One existing photograph of Bonhoeffer shows a young, earnest face in steel-rimmed glasses, an expression of wisdom beyond his years weighing heavy on his brow. But for all the seriousness of his situation, he was, by Komarnicki’s account, an ebullient character. Persuasive, playful and able to find joy even in the darkest of times.  

In Bonhoeffer, he is played brilliantly by Jonas Dassler, a native German actor who brings an intensity and intelligence to the role which must be a fair reflection of the man himself, as well as allowing room for a levity of spirit, especially in his friendships and family ties.  

There’s a scene early in the film, foreshadowing much that was to come. Dietrich the boy plays the Moonlight Sonata at his older brother Walter’s funeral wake. The piece was Walter’s favourite, but none of the mourners pay the slightest attention. Dietrich slams the piano shut and runs off in frustration. “No one listened,” he tearfully complains to his mother. “No one cared.” This theme of rousing a deaf or unfeeling world to moral action runs through the whole movie. 

We can all agree that Bonhoeffer is a man to emulate in our own times. The question is where would his instincts lie in the political and cultural landscape of today. 

Komarnicki has done a solid job unfolding Germany’s inexorable descent into darkness, often marking key moments as Bonhoeffer the man makes his stand against the state with actual quotations from his work. The most famous serves as the movie’s strapline:

“Silence in the face of evil is itself evil. Not to speak is to speak.” 

The script is peppered with such exhortations, which seems directed as much to the audience of today as they do to Bonhoeffer’s own, eighty-or-ninety-odd years ago. Such injunctions seem all the more arresting as Bonhoeffer’s story pursues its arc from pastor to martyr, and the noose awaiting him at Buchenwald concentration camp just days before Germany’s final capitulation.  

It is no doubt hard to frame a movie around the moral courage and conscientious stand of a single man, however admirable that man may be, particularly when so much of the struggle is happening inside his own head. Perhaps that is why much of the less historically accurate material has been included. The thriller subplot – of Bonhoeffer’s involvement in a plot to assassinate Hitler – brings some necessary forward propulsion to the story, but seems the least congruent with what we know of the man. Much of this more thrusting narrative is intercut with scenes of Bonhoeffer’s last days before his execution, the wrestling with his faith and his fate, before a final resolution of peace, even joy in his final moments. “Eternity, eternity, eternity,” he murmurs. A word he used to repeat endlessly with his twin sister as they whiled away the time smoking cigarettes. But a word which ultimately gives him the focus and the spiritual strength to hold his courage to the end. Although slower, these provide a more convincing and compelling portrait of a man who deserves to be remembered as a hero, not only of his own age, but of any age where evil is determined to silence truth at any cost. 

As a modern audience, this is where the hazard lies. To return to my original point, it is all too easy to tar one’s political or cultural opponents with the label of “fascist” or “Nazi” – merely because they happen to disagree with you. (And sadly I’ve seen this done by otherwise mild-mannered English theologians over this very film.) Some have said this is akin to shunning another child in the playground because they have “cooties”. It’s over-simplistic and facile. If anything, it reveals the casual propagandising of a suggestible mind. 

Few would watch this film and associate themselves with its antagonist (Hitler) over its heroic protagonist. We can all agree that Bonhoeffer is a man to emulate in our own times. The question is where would his instincts lie in the political and cultural landscape of today. 

Jesus had harsh words to say to the pharisees and scribes who build tombs for the prophets and decorate the monuments of the righteous. “You say, ‘If we had lived in the days of our fathers, we would not have been partners with them in shedding the blood of the prophets.’” 

How easy it is to assume we would have been on Bonhoeffer’s team.  

And this is my one criticism of the film: its portrayal of the bishops and clergy who did succumb to Hitler’s ideology seems too blunt-edged. They rail from the pulpit in the manner of the Fuhrer himself, marking them as ravening ideologues; they bark out Party platitudes, red in the face. I imagine the reality of how Nazi ideology infiltrated and captured the church – as it did many other institutions – was far more subtle, far more insinuating and insidious. More boiled frog than scalded cat. 

So it surely is in our day. While National Socialism has passed away, the totalitarian instinct which animated it has sadly not. My prayer is that we have the wisdom, courage, and above all discernment, to learn Bonhoeffer’s lesson and pass the tests of our time. 

Komarnicki’s excellent movie may just help us to do that. 

 

Bonhoeffer is out in UK and Irish cinemas from 7th March 2025. For more information and to book tickets visit the film's site.

Join with us - Behind the Seen

Seen & Unseen is free for everyone and is made possible through the generosity of our amazing community of supporters.

If you’re enjoying Seen & Unseen, would you consider making a gift towards our work?

Alongside other benefits (book discounts etc.), you’ll receive an extra fortnightly email from me sharing what I’m reading and my reflections on the ideas that are shaping our times.

Graham Tomlin

Editor-in-Chief