The Democratic Party in the United States and the Labor Party in the United Kingdom have had some success in reversing the most generous tax cuts that have benefited the wealthy since the late 1980s. Mainstream leadership in both parties has in recent years signaled, at least rhetorically, support for further abrogation.
For example, in 2021 a Labor Party insider, set to become Britain's top finance official if Labor regains a majority in the upcoming 2024 general election, announced his support for raising the tax burden on the country's greatest wealth. I reaffirmed my support.
Rachel Reeves opined at the time: “People who earn money through wealth should pay more.”
Labor's next prime minister, Keir Starmer, pledged in September last year to reverse the Conservative Party's plan to abolish Britain's top tax rate of 45%.
Mr Starmer told the BBC: “I would take it back. I want to be absolutely clear on that.”
At the Labor Party's annual conference last autumn, Mr Starmer said that Britain's Conservative Party's tax breaks for the wealthy meant that “if we allow the rich to get richer, somehow that money will end up in their pockets''. He added that it was based on a “wrong-headed” argument: “It's crap.” All the rest of us too. ”
But Mr Starmer and Mr Reeves have changed their tune in recent months. In June, Starmer publicly backtracked on his pledge to push for higher taxes on the highest income earners if Labor wins the next UK general election, as polls predict. Reeves was then asked whether Starmer's change in attitude meant Labor was abandoning its policy of taxing the wealthy, and Reeves launched into typical rich-friendly rhetoric.
“I don't see any other way to increase funding for public services other than through tax dollars,” he told reporters. “That will happen as we grow to get there. That’s why all the policies we set out focus on how we can encourage businesses to invest in the UK. “
“There are no plans to introduce a wealth tax,” Reeves stressed in late August. “I don't believe the path to prosperity is through taxes. I want to grow the economy.”
But the economic growth that Britain's Labor movement detailed last month is already enriching only the wealthy. Paul Nowak, general secretary of the Trades Union Congress, said Britain now needed to “start a national dialogue about how we tax wealth in this country”.
This conversation seems to be exactly what the current leadership of the Labor Party is trying to kill. According to Prem Sikka, University of Sheffield, Britain's 50 richest families own more wealth than the entire bottom 50 per cent of the country's population. However, he points out that the Labor leadership has no intention of “expanding the tax base by imposing a wealth tax”.
Mr Sikka added that the leadership wanted Labor to be “regarded as a fiscally responsible party”, which would lead to the Conservatives' continued “austerity and real wage cuts for public sector workers”. That's it, he continued.
“Britain is falling apart” new statesman Last month's analysis would agree: “Inequalities are driven by a tax system that entrenches them.”
Meanwhile, the United States faces similar divisions and a tax system that entrenches similar inequalities. The US Democratic Party, like the UK Labor Party, is also facing a general election in 2024. Will mainstream Democratic leadership follow the lead of Labor leadership and refuse to take the kind of bold action needed to fix the tax system? Or will Democrats take inspiration from the New Deal's serious taxing of the wealthy years ago?
The struggle to answer questions like these will define and determine our future.
Sam Pizzigati, an associate research fellow at the Institute for Policy Research, is co-editor of Inequality.org. His latest book includes maximum wage claim and The rich don't always win: The forgotten victory over plutocracy that created America's middle class, 1900-1970..
