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Economics
6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?
a pile of coins.
Sarah Agnew on Unsplash.

Few doubt that Chancellor Rachel Reeves will be putting up taxes when she presents her first Budget on October 30th.  

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. 

“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.” 

Paul Williams

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 Biblical perspective that he believes offers some solutions. 

He takes as his starting point a story from the gospel of Matthew, 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, he says, “completely ruined” by wealthy people from elsewhere buying second homes, 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 said. 

“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. 

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5 min read

Our public discourse needs responsible rhetoric before it is too late

The right turn of phrase can turn a nation, the wrong one can destroy

Tom has a PhD in Theology and works as a hospital physician.

A crowd of people stand in the side steps of the Lincoln Memorial
Easter services, Lincoln Memorial.
George Pflueger, via Unspash.

When was the last time a brilliant piece of rhetoric made the headlines? 

“Empty rhetoric.”  

“Form over function.”  

“Sloganeering.” 

These—and other accolades—are stock trade when it comes to the art of denouncing public discourse. Red flags are rightly waved in the face of baseless claims and insincere promises. Scroll through a news reel; open a newspaper: language far stronger in style than in substance is not hard to find. 

Nowadays we are sensitive to these kinds of abuses of public platforms. When Donald Trump speaks of the ‘Great Big Beautiful Bill’ or Elon Musk of the ‘Big Ugly Bill’ we know the cogs at BBC Verify are likely to be turning. Fact-checking is an established trade.  

Sometimes political turns of phrase are just careless, inadequately thought through. Granted, a politician’s public address is often put together at a pace. Time is so remarkably tight that phrasing and formulations are not interrogated as fully as they might be. (Krish Kandiah recently picked up the Prime Minister’s “island of strangers” line and its unfortunate resonance) 

But of course, the critiques I’ve listed above are themselves sharply rhetorical. They are punchy. Not drawn-out logical deductions. They aim to make us sit upright and win us over. Or move us to a course of action. 

So: is rhetoric the problem? No. Its misuse is the problem. This isn’t always clear. And it’s the reason why simply decrying “rhetoric” won’t get us very far.  

I am sympathetic to the suspicion. When efficiency and pragmatism tower high among the canons of public discourse, it is easier to trade in polarising x versus y expressions. Being guarded in the face of such potent idiom is understandable.  

And yet the most remarkable public discourses in human history have been rich in rhetoric.  

Martin Luther King at the Lincoln Memorial: “I have a dream.”  

Churchill in the House of Commons: “we shall fight them on the beaches.”  

Lincoln’s Gettysburg address: “government of the people, by the people, for the people.”  

All these speakers knew that bare understanding doesn’t typically move people to action. An impassioned speech, a plea to respond, or beautifully woven prose often serve as the tipping point for social engagement. 

Which leads me to wonder, what if a suspicion of smart speech-making ends up stunting social engagement, rather than fostering it? Perhaps political discourse today has gone too far; perhaps rhetoric is beyond repair. And yet: abuse doesn’t mean there isn’t proper use. There is a better way.

When persuasive powers are uncoupled from sound argument, then rhetoric obscures understanding and has become irresponsible. 

In the classical era, training in rhetoric was a prominent feature of an education. You might say it was the way to avoid the charge: “All substance, no style”. It was about turning a sound argument into an art form. For Aristotle, rhetoric was about making use of the tools of persuasion—substance with style. But skill in persuasion was not a virtue of itself; it never stood alone. As Roger Standing has reminded us, “the function of rhetorical skills was not to persuade in and of themselves.” Indeed, training in rhetoric was training in responsibility.  

In his classic 1950s text Ethics of Rhetoric, Richard Weaver put his finger on this. He highlighted that “rhetoric passes from mere scientific demonstration of an idea to its relation to prudential conduct.” True rhetoric, then, is this: the art of lighting up the path that leads from sound logic to good action

Today, it seems that when it comes to the rules of rhetoric, communicators are answerable to polls and popularity. These ends justify the means, which makes fancy formulations fair game. If style secures votes, then it’s a good job done. But this means the communicator has no real accountability for his or her language. Pragmatism is in the driving seat. In a sense, responsibility has been handed over to the hearer.  

This is problematic. When persuasive powers are uncoupled from sound argument, then rhetoric obscures understanding and has become irresponsible. Language is no longer illuminating, but misleading. It is trading on falsehood, or perhaps half-truths, instead of magnifying what is true for the sake of what is good. 

Take an example. In the recent parliamentary debate over amendments to the assisted dying bill, the proceedings opened with the claim that “if we do not vote to change the law, we are essentially saying that the status quo is acceptable.” I don’t for a moment doubt the good intent in this claim—securing the most compassionate care possible for terminally ill adults. But let it be said: no, those who do not advocate assisted dying are not “essentially” saying this. This claim is a non sequitur: the conclusion does not follow the premise. It is logically unsound. 

Like many tools, the art of persuasion can be wielded carelessly; sometimes maliciously. But rhetoric-free public discourse would make for a colourless and lifeless thing indeed. What we need now is rhetoric that is responsible—responsible to what is true and responsible to good outcomes. These should not be split; as soon as they are, speech-making becomes sterile or hollow. I recently heard the neat phrase: “Some people reach your mind by going through the heart, and some people reach your heart by going through your mind.” Yes, as the Christian faith has always maintained: mind and heart belong together. Give us words that awaken both, like those once spoken by that obscure wandering rabbi, Jesus of Nazareth, in one of the most studied and penetrating speeches in human history:  

Blessed are the poor in spirit, for theirs is the kingdom of heaven. 

Blessed are those who mourn, for they will be comforted. 

Blessed are the meek, for they will inherit the earth. 

Blessed are those who hunger and thirst for righteousness, for they will be filled. 

I pray for public discourse brimming with both substance and style. It might help lead us to better things. 

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