Glenn Beck and Sarah Palin

A match made in heaven

 

Ah, this is a beautiful thing. Glenn Beck and Sarah Palin (our cover story), facing each other on Fox this week, the Statue of Liberty looming in the background. About halfway through the clip, Glenn Beck leans across to Palin and searches for a personal connection:

You and I both were, I think, the number one and number two Halloween costumes of the year.

He carried on:

Did you know that? We both have been nailed on Saturday Night Live as being stupid. We are also both just recently voted on the Most Admired list of people in the world. We both have been on the cover of major magazines in the last year. We're both probably top five Most Hated People in America.

It's one way to bond. But this interview, if you watch it, is really the most amazing example of vague paranoia. They talk for the first ten minutes in the most part about "trust", the fact that there's no one you can trust, the moment they both realised that they could trust ANYONE AROUND THEM. I think they use the word trust approximately 48 times in the space of ten seconds.

Then there's the "system". Don't, for God's sake, get them started on the "system". Can you survive out of the "system", wonders Beck. "The system is broken," responds Palin. Not only that:

The system creates disenchantment with the people looking at the political system saying we don't like that.

The people! I nearly forgot about the people. Beck and Palin seem to have a hotline to the people. The people, all of them, seem to like exactly what they like and hate exactly what they hate. Why do they bother having elections when you could just ask these two?

 

 

Sophie Elmhirst is features editor of the New Statesman

Getty
Show Hide image

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