We welcome another member of the illustrious club of sociopaths: horny-handed son-of-a-son-of-the-soil Michael Meacher. In today's Grauniad he's arguing that you could kick-start the economy simply by taxing the snot out of the 1%.
An interesting proposition, Mr. Meacher, so how do you argue it?
The richest 10% control wealth of about £4tn. To put these figures in perspective, Britain's total GDP is £1.45tn.Oh look, I think he's comparing wealth (a stock) with GDP (a flow). Perhaps he didn't learn any economics at the LSE. Never mind, surely the rest of his case holds up better?
Britain's thousand richest [...] In 1997 they held assets of £99bn, but they took full advantage of New Labour's being "intensely relaxed about people becoming filthy rich" to nearly quadruple this to £336bn by 2010.13 years in which the RPI climbed from 160 to 228, so you can discount that second sum by 1.425 to give £235bn; more than a doubling, but certainly nowhere near a quadrupling. It's also worth nothing that house prices (a significant fraction of assets) climbed to 290% of their 1997 value by 2010 according to the Nationwide HPI calculator.
And, having failed to make his case that the rich have received an undeserved rise in wealth, what's his solution? Tax the wealth:
In the short term, the most feasible approach is to impose a capital gains tax charge at the current rate of 28% on the topmost layers of wealth [my emphasis], the £155bn gains amassed by the 0.003% over the last three years. That would yield £43bn, more than enough to generate the public investment to create 1.5 million jobs over the next two years.Oh, heavens above. Tax the wealth! Of course! Because that's not going to produce any form of legal storm as the taxed fight back against classification, shift around asset ownership or head abroad; and raising money for that tax won't involve a huge sale of property at the upper end of the UK property market just when there's no appetite for purchase (because most other purchasers have a similar tax bill). And he's not done yet:
This could then steadily be extended to the remainder of the top 1%, which would provide the funds to widen and deepen the early recovery.
The politics of envy, Mr. Meacher. You assume that Government can spend money with greater benefit to the economy than its rightful owners, even with a huge destruction of wealth implicit in your taxation plans. You're worse than a fool, because even you don't really believe this works.