Article

Economics

Politics

24 October 2024

1 min read

How can taxes build a better society?

As we await Rachel Reeve's budget announcement, Laurence Fletcher wonders what positive tweaks can be made to our economic system.

Laurence Fletcher

Laurence is a journalist at the Financial Times.

Few doubt that Chancellor, Rachel Reeves, will be putting up taxes when she presents her first Budget on October 30. The political narrative of recent months has very much been of an alleged fiscal “black hole” of £22bn - or is it £40bn? - that somehow needs to be filled.

While the size of the shortfall and the identity of those responsible are both hotly disputed, and despite a lack of detail from the Treasury about what it actually consists of, the questions now being asked are not whether taxes will rise but which ones and by how much.

Months of speculation have focused on employer National Insurance, capital gains tax and freezing income tax thresholds as areas that Reeves could look to for the additional revenue. But beyond the immediate issue of raising enough revenue to make good any shortfall, lies a deeper, trickier question about the way in which taxes should be levied for the good of society. If a government is to force people and companies to hand over their money, then what is the most ethical way to do this? Who should pay and who shouldn’t? How can tax be used to reduce inequality and build a better society?

Answering such questions is, of course, far from straightforward, because there are plenty of other factors in play.

For instance, some taxes are surely levied because they are simpler to collect. Take income tax - an unpopular measure introduced in 1799, then abolished before being reintroduced as a supposed temporary measure. It could certainly be argued that taxing people’s income - their attempt to get on in life and improve their lot in life - is less “fair” than taxing wealth that has been accumulated by someone’s ancestors years ago. Working hard and earning income is often surely a way of breaking down class divisions. But income tax - contributing 28 per cent of UK government tax take in 2023-24, according to The Institute for Fiscal Studies - has the advantage that it is relatively difficult for the average worker at a UK company to avoid it. Ease of levying it is surely a driver.

Equally, some taxes that might seem “fairer” have deliberately not been levied because of the difficulty in collecting them, and/or because to try to do so could be counterproductive. A wealth tax, for instance, would be “economically damaging”, according to one of the UK’s highest profile tax experts, Dan Neidle. Or take the politically contentious issue of non-doms, a colonial era tax break allowing rich foreigners to avoid UK tax on overseas income. It would be fairer, the argument goes, to tax them on the whole of their income. If they are going to be resident in the UK, then surely they should be taxed like a UK resident whose home is here?

Former Chancellor Jeremy Hunt abolished this regime earlier this year but left a number of concessions that the incoming Labour government pledged to abolish. But non-doms are tax-sensitive and highly mobile, and a number of jurisdictions compete to attract them. Many are entrepreneurs and wealth creators that many countries need. Reports have suggested a clampdown could raise no money or even cost money and could drive people away.

So what can be done to use tax in an ethical way? Paul Williams, research professor of marketplace theology and leadership at Regent College, Vancouver and chief executive of the Bible Society, takes a perspective that he believes offers some solutions.

He takes as his starting point a story in the gospels, where Jesus is asked whether people should pay taxes to Caesar. The question is a trap - either Jesus gives his backing to taxation that is highly unpopular with the Jewish people, or he rejects the tax in an act of rebellion against the Romans.

Jesus replies that they should “pay to the Emperor what belongs to the Emperor, and pay to God what belongs to God.” We are to pay our taxes to those in authority, but we are also to honour God.

While Williams believes that too much emphasis is placed on the Budget and political parties’ promises to be able to fix everything, and that a more radical rethink of our economy is required, he also sees room for positive tweaks to the current system.

One key area is the property market, the manifestation of so much inequality in society, with some people owning multiple houses while others cannot afford to buy one. Williams argues that the ready availability of debt finance has allowed those who already hold assets to easily acquire properties, turning real estate into an investable asset class to the detriment of many of the poorer in society.

“The reason there’s so many homeless people and empty houses is due to debt finance. It makes it easy for a relatively small proportion of the population to acquire a large percentage of the assets.

“The system has allowed a structure in which a small advantage in the beginning can lead to big, big differences over time.”

Williams highlights parts of Devon and Cornwall that have been “completely ruined” by wealthy people from elsewhere buying second homes that used to belong to locals, leaving property out of reach of anyone who lives and works there.

Nevertheless, he believes taxation can be used in this area to help level the playing field.

He proposes a “pretty punitive” marginal rate of tax on ownership of more than one home. (Stamp duty only partly does the job and is a blunt instrument also affecting people moving homes, thereby makes mobility expensive).

“You want to disincentivise the way the housing market is used for speculation,” he says.

“Housing is being treated as a commodity. The problem is, it’s not; it’s not just an asset. It has utility value and a communal and quasi-spiritual value, enabling people to feel rooted.”

Buy-to-lets, meanwhile, are better than having empty second or third homes, but “wouldn’t it be better if occupiers could buy that house?” he adds.

Meanwhile, research by the Financial Times recently found a huge wealth gap between the average millennial and the top 10 per cent of millennials, who are benefiting from family wealth to accumulate substantial housing assets.

So would increasing the rate of inheritance tax - one of the most hated of taxes - and/or lowering the threshold also help reduce some of this inequality? After all, how is it fair that one child in the UK is born to inherit large property wealth while another is born to inherit little or nothing? Or, even worse, that second child will only ever be able to afford to be the tenant of the first, paying them rent for the rest of their lives? Williams is not a fan of inheritance tax per se, arguing that it is “not part of the package” in a Biblical image of a flourishing economy. But he adds an important caveat: “the playing field is not level".

“There might be circumstances to impose a one-off tax on the very wealthy… if you want a transition to a more equitable society.”

Such steps are not easy to take. It is, he admits, probably “career suicide” for a politician to adopt such views. But if we are to take steps towards a fairer way of life, and avoid a two-tier society in decades to come, then maybe the conversation needs to shift this way. Perhaps the Budget could be the time to start.

Review

Culture

Music

Politics

25 July 2025

6 min read

As the congregation gathers Bruce Springsteen leans hard into hope

Chords of confrontation and communion

Elizabeth Wainwright

Elizabeth Wainwright is a writer, coach and walking guide. She's a former district councillor and has a background in international development.

Bruce Springsteen crouches down and holds a hand out to a sea of outstretched hands

Springsteen plays Manchester.

Brucespringsteen.net.

I finally got to experience a Bruce Springsteen concert recently. Which is to say, for three hours, I touched a land of hope and dreams.

We walked along a canal to get to the arena – my husband, my father-in-law, and me –Manchester shimmered with the arrival of summer, and light bounced off red brick and still water. We neared the arena and the air felt dense with anticipation. T Between us we carried heartbreaks, elections, hopes, failures, and a collective return to music that had accompanied and clarified it all. We were drawn by loyalty and nostalgia and joy, but also I sensed by a hope that Bruce would meet the moment — the frayed, furious, anxious now — with something that mattered.

We found our seats and gripped our drinks as the lights dimmed. Thousands of people stopped individual conversations, and hushed, and then joined voices into a deep and reverent chant. “Bruuuuuuuce”. To my right, the glow of a screen, the woman holding it sending a text – “yes babe, 1pm, lovely” – and it seemed incongruent and true. In the tension before the release, in the dark before the light, we hold our breath even as the ordinary carries on. The ordinary carries on even as the world fractures and glows. The ordinary is what Bruce often sings of, it is one reason why fans feel heard and seen by him. That night though, all the ordinaries he sang of formed something extraordinary.

Then there was light, and Bruce walked slowly from the side to the front of the stage, his guitar suspended across his body, his face a relaxed, broad smile, his bandmates and companions beside and behind him. Then there was music. No videos, no pyrotechnics; just old songs that felt as if they existed for the now. My City of Ruins, Death to My Hometown, Land of Hope and Dreams, The Promised Land. The song Long Walk Home was introduced as a “prayer to my country”. It is a country that he embodies, despairs of, and loves. He sings of his home with fury, sorrow, tenderness, and love.

Riffs and rhythms that were decades old were being made urgent again. Springsteen’s music holds both grit and glory, and hard-won joys leave space for sorrow. I write this and lines by Mary Oliver come to mind: “We shake with joy, we shake with grief / what a time they have these two / housed as they are in the same body.” What a time they had, joy and grief, that night with Bruce.

The evening unfolded not as spectacle but as liturgy; all of us involved in something like devotion – in part to Bruce, but also to moral clarity, to the power of poetry, to the promise of who we could be. At times the crowd seemed silent, ushered into something deeper – not entertainment or escapism, but something like confrontation and communion. We were being offered the joy of music and memory, but also an opportunity to reckon with who we are.

Between songs, Bruce spoke. He apparently rarely does so in his gigs. His voice slowed and deepened – not chit chat, not to entertain, but to bear witness and stand defiant and call us to the best versions of ourselves. “I’ve spent my life singing about where we’ve succeeded and come up short in pursuit of our civic values,” he said. “I just felt that was my job.” He proceeded to describe how those values are being torn apart, and why they matter. The crowd roared. He was making civic values shine, speaking about them with urgency. He acknowledged both the dream and the failure, but still he believes in the promised land and he asks us to as well. Before he belted out Rainmaker, he said, “when conditions in a country are right for a demagogue, you can bet one will show up.” He spoke of America, and really of the world – what it is, what it is becoming. His honesty and poetic rage situated us, then became a map for how to keep going.

We can be glad to be alive even while we are honest about sorrow, injustice, broken politics, fractured families, and tired hearts.

I found myself wondering: why is it that Bruce can sing and speak about justice, warped politics, and who we are becoming, and be met with cheers, while so many churches avoid doing so, preferring instead to whisper in neutral tones while the world burns? That night, I stood in a crowd of thousands and I heard a kind of moral clarity that orientates the soul and made me cry. It wasn’t partisan, it was human. Why can it feel riskier to speak specifically and prophetically in a sermon than in a stadium? I wonder if it’s because Springsteen has always rooted his politics in people’s real lives – in work, family, grief, memory. He doesn’t gesture toward abstract ideologies for fear of alienating people, or in the hope of retaining fans: he tells stories and gives names to problems and injustices, singing about crooked institutions, boarded-up factories, buses that never come, lovers who don’t come back.

The evening felt, for me, like the kind of church I long for and sometimes touch: no tidy answers, no insincere lyrics, no vague calls for justice, but rather honesty and specificity and the chance to stand alongside strangers and feel something challenging, beautiful, true.

I scribbled a question as the music soared: can a chord be mystical? Because that’s how it felt. As if there are progressions – minor then major, dissonance into harmony – that can reach past language and speak directly to the part of us that longs for love more than cynicism, to the part of us that still dares to hope even when there is very little obvious reason to do so, to the part of us wondering how to be truly alive.

Near the end, Bruce quoted the American writer James Baldwin:

“In this world, there isn’t enough humanity as one would hope. But there’s enough.”

There’s enough. It was a small phrase but it hung in the air like incense. For Bruce, there is enough humanity to keep singing for, and about. Now, he seemed to ask the crowd, what will you do with that enoughness, with that humanity?

In the final stretch, Bruce leaned hard into hope with songs like The Rising and Born to Run. The energy in the room felt like resistance – not against something, but for something. He didn’t pretend everything’s fine, but he sang anyway. “It ain’t no sin to be glad you’re alive.”

We can be glad to be alive even while we are honest about sorrow, injustice, broken politics, fractured families, and tired hearts. Gladness is being asked to stand its ground now, and to do something with our improbable aliveness. For the final song, Bruce played Bob Dylan’s Chimes of Freedom. It is a song about lightning and exiles and freedom, about the trembling of the soul and about a sky that “cracked its poems in naked wonder.” He sang it slowly, tenderly, like a prayer – which can also be a trembling of the soul, a song of naked wonder. Perhaps he prayed to God, perhaps to some other sacred thing: our better angels, or the fragile hope of who we might yet become.

In a BBC documentary about Bruce Springsteen’s history with the UK, someone says “there’s something in Bruce fans, you know you can implicitly trust them.” As we filed out of the arena, it felt like 25,000 of us briefly knew each other, trusted each other, could take on the world together. Perhaps we just had.

Soon it was just me, my husband, my father-in-law, and the silent dark canal as we walked back into the night. We were tired, we were awake. I thought of Bruce’s belief in the promised land, and of Baldwin’s line: there’s not enough humanity, but there’s enough. These are beliefs that can feel risky. So can belief in God. But enough is plenty. Enough can turn up the volume and let the spirit be our guide. With 25,000 other people, I’d turned that volume up and I could hear the spirit defiant, unifying, guiding. It is – has always been – time to go and sing of it, despite everything.