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Easter

Politics

21 March 2024

3 min read

Raw politics: any room for hope?

The high stakes of Easter can confront the natural order.

Owen Gallacher

Owen is a Pastor to Postgraduate Students at St Aldates Church, Oxford.

Preisdent Putin stands behind a lectern with a gold door and Russian flag behind him.

They say Putin is not in touch with reality. But when it comes to raw fundamental political reality, maybe he is? It could well be true that all our chat about goodness and beauty and love and faith is mere decoration. That it’s just a layer of fake grass that we use to cover over the harsher, concrete facts of our existence.

Things like the basic violence of the natural ‘order’ and the raw power politics inherent in our competing systems. We even have a habit of bestowing the prefix ‘real’ on such politics.

So is this ‘real’ stuff the concrete base layer of our existence? Is it the deepest truth? Is it the uncompromising reality that is always there, even as we prefer to cover it over with the fake grass of our stories of the beautiful and sweet songs of love?

Most of the evidence points that way: The stockpiles of nukes, the cutthroat colleagues, the succession of bullies intent on becoming the next big dog in the raw struggle for power.

I remember witnessing a violent assault at the tender age of eight. And the impact of encountering this ugliness on my young heart was a new shadow of fear. Suddenly the world was a colder and darker place. Then I grew up and became a priest. Which raises the question of whether I am spending my life just “whistling in the dark” to feel better? Am I just tending to the fake grass?

The celebration of Easter does not deny the darkness. It does not cover over the concrete. It claims, instead, that the ugly concrete base has in fact been cracked open to reveal a deeper subsoil, that there is something even more ‘real’, more true, more fundamental than the brutal struggle for power we currently all suffer within.

This is the high stakes of Easter.

it could be that our intuitions of beauty and experiences of love are, gloriously, not the stuff of fake grass and psychological coping mechanism

And here lies the deep and central significance of an obscure death on a Roman cross. It is the moment in which God, who is primordial love, faces up to the violent worst of murderous evil. Not with angel -armies to crush our sorry war-torn mess under a new almighty domination, which would only serve to confirm the lasting truth of the dark concrete layer, but by contradicting it, undermining it, through a humble death followed by resurrection.

I write it out and, to be honest, it is kind of surprising to me just how many people keep believing this unlikely story to be literally and deeply and seriously true.

It could be because most of us are not prepared to be as clear sighted as Putin (and all the others). That for some reason, we remain relatively unable to cope with being so brutally in touch with the cold, dark facts of the ugly concrete.

Or it could be that our intuitions of beauty and experiences of love are, gloriously, not the stuff of fake grass and psychological coping mechanism, but actually have their roots down deep into the subsoil of an infinite beauty and an ultimate love?

If so, it could also be that the strongest counter evidence available to us, countering all the nukes and bullies and violent domination, is noticing what lifts our hearts and moves us to tears? Beauty can do that. Violence cannot.

And so I keep whistling.

Explainer

Comment

Economics

29 October 2024

6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?

Laurence Fletcher

Laurence Fletcher is a journalist at the Financial Times.

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.