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Laurie Penny: What Margaret Thatcher means to my generation

We are living in the shadow not of Thatcher herself, but of Thatcher the icon.

Why do young liberals hate Margaret Thatcher? It's a fair question, given that many of us, myself included, were still potty-training when she left Downing Street 20 years ago. We weren't on those picket lines. We weren't in those riots. We weren't even old enough to understand why our parents had lost their jobs. So why the drunken half-jokes about dancing on her grave? Why, after two decades, is it still so personal?

It could hardly be anything else. Today's young people are living in the shadow not of Thatcher herself, but of Thatcher the icon. Thatcher for us isn't a real politician with convictions and committees to attend: she is an image, the wicked witch in the woods, the rubber mask of neoliberalism in drag gurning down at a generation just beginning to understand how it has been cheated. In most respects, we still live in a Thatcherite society, atomising itself into marketable units at the expense of the social. Thatcher has become part of the creation myth.

Young people who weren't born during the poll tax riots focus their alienated rage on the image of Thatcher, because, in neo-Thatcherite Britain, images are all we have. The Iron Lady and her cronies instigated the junk-food principle of politics, whereby hungry, needy people will invariably swallow something that isn't good for them if it has a recognisable cartoon face on it - even if, as the coalition cabinet proves, it is sickeningly rich and stuffed with yellow preservatives.

Handbags at dawn

For young women, Maggie casts a second shadow over the entire notion of female empowerment. Twenty years after she left office, it is depressing rather than encouraging that Thatcher is still the enduring Anglo-American model of a woman in a position of political power, one to which all women seeking public office, from Sarah Palin to Harriet Harman, are eventually expected to respond.

Thatcher was no more a feminist than Bradley from S Club 7 was ghetto, but she created a brand of female empowerment - all heels, warmongering and expensive handbags - striking enough to replace the erstwhile aspiration of real woman-power.

There were good reasons for her stylistic self-management; the electorate was always far more likely to accept an Iron Lady than a woman of flesh and blood. But that handbag hovers over today's ambitious young women like a sartorial guillotine, reducing feminism, along with progressive politics, to a lifestyle choice, and neutralising it in the process. As the recession has given the lie to the dream of perpetual growth, young people have begun to develop an idealised, almost pantomimic understanding of what was lost.

Ask any 20-year-old for a Thatcher slogan and they will tell you, "She said there's no such thing as society." We understand, and painfully so, that we now live in a country where community has been replaced with an image of community that can be broken up and sold back to us at a profit.

This is what the "big society" is all about: not cuddly One-Nation Toryism, but the logical conclusion of Thatcherism, with the corporate iconography of society replacing the social even as the welfare state is destroyed. It is no accident the Camerons have employed a stylist and a photographer at public expense, while it has been decided that "wasteful" quangos such as the Youth Justice Board ought to be axed. In personality politics, image is everything.

We may be too young to remember Thatcher high-heeling it out of No 10, but our leaders still dance to the rhythm of her politics and our aspirations are still dominated by her project. The mythology of Thatcherism is more than mortal. When Elton John is called upon to sing her eulogy, he will no doubt conclude that the country burned out long before her legend ever will.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

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Taxation without benefits: how our tax system increases inequality

We often hear the progressive income tax used as a proxy for all tax when it actually accounts for just over a quarter of the tax take.

Tax may not be the burning issue on everyone’s minds over the next month, but the Panama Papers leak has proven that the thorny issues of who pays what, and what level of tax is fair, are ones that are never too far away from the public consciousness.

One of the most important annual publications on tax is the Office for National Statistics’ Effects of Taxes and Benefits on Household Income. Published today, it shows, among other things, the proportion of income paid in tax by people at different points on the income spectrum. This may sound like the natural domain of the data nerd, but it actually tells us some rather interesting facts about our system of taxes and benefits.

First, the good news. Our much maligned welfare system is in fact a beacon of progressiveness, drastically reducing the level of income inequality we see in this country. In fact, overall, taxes and benefits are quite substantially redistributive. Without them, the income of the richest 20 per cent of households would be 14 times higher than the poorest 20 per cent. With them, that gap falls to only four times.

The benefit system as a whole decreases the Gini coefficient, the most frequently used measure of inequality, by 14 percentage points. For anyone who sees taxes and benefits as a key component in reducing economic inequality, or boosting the incomes of the poorest, or, frankly, tackling social injustice, this is rather welcome news.

But now for the bad news.

While our welfare system is undoubtedly progressive, the same cannot be said of our tax system when looked at in isolation. The poorest face a disproportionately heavy tax burden compared to the richest, paying 47 per cent of their income in tax, compared to just 34 per cent for the richest. Last year (2013/14) this difference was 45 per cent – 35 per cent, and the year before (2012/13) the gap was 43 per cent – 35 per cent. So while the proportion of income paid in tax has fallen slightly for the richest, it has increased for the poorest.

While some taxes like income tax are substantially progressive, those such as VAT and Council Tax are not. Even after adjusting for rebates and Council Tax Benefit, the poorest 10 per cent pay 7.1 per cent of their income in council tax while the richest 10 per cent pay only 1.5 per cent.

Should this matter, if our system of benefits continues to narrow the gap between rich and poor? Well, yes, not least because that system is under severe pressure from further cuts. But there are other good reasons to focus on the tax system in isolation from the benefit system.

Polling by Ipsos MORI has shown that the public believes that the tax system by itself reduces inequality, and it is often spoken of by politicians as if that is the case. We often hear the progressive income tax used as a proxy for all tax, for example, when it actually accounts for just over a quarter of the tax take.

Understanding why the tax system does not by itself reduce inequality is therefore important for both thinking about how tax revenues could be better raised, and for understanding the importance of the benefit system in narrowing the gap between the richest and the poorest.

John Hood is Acting Director of the Equality Trust