The Green Party is today launching a call for a wealth tax. Photo: Getty
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A wealth tax can help deliver real change for the common good

The Green party's leader Natalie Bennett announces a new policy: an annual wealth tax to combat inequality in Britain.

Inequality in Britain today has many faces.

It’s the school pupil, fleeing the bedroom that she has to share with a younger sibling in an overcrowded home, struggling to do her homework in a noisy, crowded library in the one-hour rationed computer slot available, while her classmate sits in her private study in her multimillion-pound family home, using the latest iPad with the help of a private tutor.

It’s the young man, who did everything right, got the 2:1 university degree, the first in his family, forked out for the expensive Master’s, who’s now working in a pub on weekends to fund another unpaid internship, while his fellow intern is relying on the bank of Mum and Dad, free to socialise and network in every spare moment.

The gaps are getting bigger and bigger. The financial crisis, quantitative easing, this government’s harsh and unfair cuts to benefits – the whole approach of austerity - are pushing Britain further in this direction, past Twenties levels of inequality and on towards Victorian levels.

And the key trend of the past decade – both here in Britain and around the world is that the super-rich have got richer. The 1 per cent have been soaring away from the rest, while the middle stagnates and the poorest fall backwards. That’s what led Thomas Picketty to call for a global wealth tax, and what’s left the poorest 20 per cent of the British population living in conditions closer to their compatriots in Slovenia and the Czech Republic than France and Germany.

The gap between rich and poor, and the super-rich and the rest, is a social problem. And it’s an economic problem – the super-rich can’t keep an economy going with purchases of yachts and gold-plated taps. When you’ve got the IMF and World Bank (hardly institutions known to their commitment to fairness) expressing concern about the impacts of inequality, it’s clear there is a problem.

It’s a problem on a global scale, but we can start to tackle it here in Britain, the seventh most unequal country in the OECD, where the problem is visible and obvious from the oligarch-ridden streets of Chelsea to the struggling high streets of Northern England.

That’s why the Green Party is today launching a call for a wealth tax.

We’re proposing a 1 per cent-2 per cent annual tax on the richest 1 per cent of people in Britain – those with wealth of over £3m. They’re people doing really well from our society: the richest 1 per cent of people take 13 per cent of our country’s total income.

It’s part of a package of measures that will be included in our fully costed 2015 manifesto, which will also include a call for a Living Wage, pay ratios for companies so that the highest-paid worker isn’t paid more than 10 times the lowest paid, a land value tax to replace council tax and business rates, a more progressive income tax system and a raising of the corporate tax rate back towards global standards. 

Our wealth tax would affect about 300,000 people, and the annual cost to them would be £30,000 to £60,000. Most of them would comfortably afford it; assuming a 5% return on their wealth, £150,000, they’d only be paying around a 20% effective tax rate. For the relatively small number in this group with a single illiquid asset, such as a house, and relatively low income, special arrangements could be made to put off tax payments.

Such a wealth tax would raise £21bn to £43bn a year – about 15% of the cost of the NHS: a significant sum that wouldn’t transform the national budget, but would certainly have a significant impact on it.

This is a relatively new idea in Britain, but not globally – France, Spain, Iceland, the Netherlands, Norway and Switzerland all have wealth taxes, and there’s evidence of public support here from a YouGov survey in 2010 that found 74 per cent of people were in favour of a wealth tax at ten times the rate we’re proposing.

We need real change in Britain, to really start to rebalance our society so that it works for the common good, not just the 1 per cent. A wealth tax is a measure who’s time has come, and I’m proud that the Green Party, with its growing support and growing membership, is putting it on the national agenda.

Natalie Bennett is leader of the Green party.

 

See more:

The Greens may become a force to be reckoned with (21 July 2014)

Without older voters the Greens have little hope (22 July 2014)

 

Natalie Bennett is the leader of the Green Party of England and Wales and a former editor of Guardian Weekly.

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How the Democratic National Committee Chair contest became a proxy war

The two leading candidates represent the Hillary Clinton and Bernie Sanders factions.

While in the UK this week attention has been fixed on the by-elections in Stoke-upon-Trent and Copeland, in the US political anoraks have turned their eyes to Atlanta, the capital city of the state of Georgia, and the culmination of the Democratic National Committee chairmanship election.

Democrats lost more than a President when Barack Obama left the White House - they lost a party leader. In the US system, the party out of power does not choose a solitary champion to shadow the Presidency in the way a leader of the opposition shadows the Prime Minister in the UK. Instead, leadership concentrates around multiple points at the federal, state and local level - the Senate Minority and House Minority Leaders’ offices, popular members of Congress, and high-profile governors and mayors.

Another focus is the chair of the national party committee. The Democratic National Committee (DNC) is the formal governing body of the party and wields immense power over its organization, management, and messaging. Membership is exclusive to state party chairs, vice-chairs and over 200 state-elected representatives. The chair sits at the apex of the body and is charged with carrying out the programs and policies of the DNC. Put simply, they function as the party’s chief-of-staff, closer to the role of General Secretary of the Labour Party than leader of the opposition.

However, the office was supercharged with political salience last year when the then-chair, Debbie Wasserman Schultz, was exposed following a Russian-sponsored leak of DNC emails that showed her leadership favoured Hillary Clinton as the party’s presidential nominee to Bernie Sanders. Schultz resigned and Donna Brazile, former campaign manager for Al Gore in 2000, took over as interim chair. The DNC huddled in December to thrash out procedure for the election of a permanent replacement – fixing the date of the ballot for the weekend of February 24.

The rancour of the Democratic primaries last year, and the circumstances of Schultz’s resignation, has transformed the race into a proxy war between the Clinton and Sanders factions within the party. Frontrunners Tom Perez and Keith Ellison respectively act as standard bearers for the respective camps.

Both are proven progressives with impeccable records in grassroots-based organizing. However Perez’s tenure as President Obama’s Labor Secretary and role as a Hillary booster has cast him as the establishment candidate in the race, whereas Ellison’s endorsement of the Sanders campaign in 2016 makes him the pick of the radical left.

The ideological differences between the two may be overblown, but cannot be overlooked in the current climate. The Democrats are a party seemingly at war with its base, and out of power nationwide.

Not only are they in the minority in Congress, but more than a third of the Democrats in the House of Representatives come from just three states: California, Massachusetts, and New York. As if that weren’t enough, Democrats control less than a third of state legislatures and hold the keys to just sixteen governors’ mansions.

Jacob Schwartz, president of the Manhattan Young Democrats, the official youth arm of the Democratic Party in New York County, says that the incoming chair should focus on returning the party to dominance at every tier of government:

“The priority of the Democratic leadership should be rebuilding the party first, and reaching out to new voters second," he told me. "Attacking Donald Trump is not something the leadership needs to be doing. He's sinking his own ship anyway and new voters are not going to be impressed by more negative campaigning. A focus on negative campaigning was a big part of why Hillary lost.”

The party is certainly in need of a shake-up, though not one that causes the internecine strife currently bedevilling the Labour Party. Hence why some commentators favour Ellison, whose election could be seen as a peace offering to aggrieved Sanderistas still fuming at the party for undermining their candidate.

“There's something to be said for the fact that Ellison is seen as from the Bernie wing of the party, even though I think policy shouldn't be part of the equation really, and the fact that Bernie voices are the voices we most need to be making efforts to remain connected to. Hillary people aren't going anywhere, so Ellison gives us a good jumping off point overall,” says Schwartz.

Ellison boasts over 120 endorsements from federal and state-level Democratic heavyweights, including Senator Sanders, and the support of 13 labor unions. Perez, meanwhile, can count only 30 politicians – though one is former Vice-President Joe Biden – and eight unions in his camp.

However the only constituency that matters this weekend is the DNC itself – the 447 committee members who can vote. A simple majority is needed to win, and if no candidate reaches this threshold at the first time of asking additional rounds of balloting take place until a winner emerges.

Here again, Ellison appears to hold the edge, leading Perez 105 to 57 according to a survey conducted by The Hill, with the remainder split among the other candidates.

Don’t write Perez off yet, though. Anything can happen if the ballot goes to multiple rounds and the former Secretary’s roots in the party run deep. He claimed 180 DNC supporters in an in-house survey, far more than suggested by The Hill.

We’ll find out this weekend which one was closer to the mark.

Louie Woodall is a member of Labour International, and a journalist based in New York.