Explainer
Comment
Economics
6 min read

How to tax ethically to avoid a two-tier society

From income tax to property and inheritance taxes, which is fairer?
a pile of coins.
Sarah Agnew on Unsplash.

Few doubt that Chancellor Rachel Reeves will be putting up taxes when she presents her first Budget on October 30th.  

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. 

“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.” 

Paul Williams

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 Biblical perspective that he believes offers some solutions. 

He takes as his starting point a story from the gospel of Matthew, 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, he says, “completely ruined” by wealthy people from elsewhere buying second homes, 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 said. 

“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. 

Article
Books
Comment
Film & TV
Morality
6 min read

Murder we wrote: how cosy crime and psycho-thrillers carve our minds

Our reactions have changed from heart-wringing cries to merely puzzle-solving

Theodore is author of the historical fiction series The Wanderer Chronicles.

Elderly amateur sleuth stand by their pinboard.
The Thursday Murder Club convenes.
Netflix.

We love murder. 

That seems to be the only reasonable conclusion when you look at the sales figures of Richard Osman’s record-busting murder mystery series, which opened with The Thursday Murder Club back in 2020. In UK sales alone, it sold over a million copies within the same year as its release, something no other book has ever done.  

This was more than a bestselling debut novel, this was a cultural event in UK publishing. And no doubt Netflix are hoping for something equally seismic when their film adaptation of The Thursday Murder Club goes live. 

The combination of light humour, a clutch of charismatic octogenarians, tea and cake, and the odd violent death or two to keep them entertained, seems to have struck the motherlode of British cultural appeal. I can only imagine the stellar cast they have assembled for the film adaptation, led by Helen Mirren and Pierce Brosnan, will take the series’ success to new heights. 

As an author currently puzzling my way through my own contemporary murder mystery, I can only look on at the phenomenon in wonder and sigh for what may yet be.  

But murder has always been a tricky one for me as a) an author, and b) a Christian. Do those two facts mean I have to be a “Christian author”? And if so, what kind of limits does that put around what I should be writing about? It may not sound like much of a conundrum to you, but honestly I have wrestled with this question for a long time. There is darkness in the world: how much darkness should I explore in my books? (So far, if you ever read any of my historical novels, you’ll see the answer is: quite a lot.) 

Maybe I’m taking it all too seriously and murder is mere light entertainment now. Death is to be enjoyed with a nice cup of tea; evil, with slice of Victoria sponge cake. 

But somehow, I don’t think so. 

Recently, I was helped in my moral quandary by another crime author, Andrew Klavan. In his book, The Kingdom of Cain, published last month, Klavan explores the question of evil and specifically murder in what he terms a ‘literature of darkness’. It is a fascinating, if unusual, book. His approach is to take three murders that actually happened, and demonstrate how each has influenced a long succession of murder novels (and movies) up to the present day.  

Through this exposition, we witness the changing attitudes to murder over the last century and a half and in particular how those changes seem strongly linked to the ebbing tide of Christian faith in the West. 

For example, Dostoyevsky’s great novel, Crime and Punishment, was published in 1866. The double-murder, central to the plot, is carried out by a young student named Raskolnikov. He is an intellectual who is seeking to prove that the moral boundary beyond which murder lies is nothing more than a mere concoction, a social construct (or worse, a religious one) which he, being of superior intelligence, can transcend and therefore ignore. The entire novel is the story of how his conscience will not allow him to get away with this. Near the end, he confesses his crime to the young prostitute, Sonya, who responds to his confession in fearful horror: 

“What have you done? What have you done to yourself?” 

The second question is key. 

Dostoyevsky based the plot of his novel on a real axe-murderer, a Frenchman called Pierre François Lacenaire, who went to the guillotine in 1836. Lacenaire became an international sensation when, in court, he aired many of his own pseudo-intellectual justifications for his actions – that the murders he committed were a strike against the injustice of the elites and the iniquitous power structures of the day. Rather than what they appeared to be: a grubby little double murder for the sake of a few francs. Lacenaire set the tune which many still whistle today, I’m sorry to say. 

But Dostoyevsky was prophetic. He foresaw long before Nietzsche and others who would follow, that the tide of Christian faith was going out in Western civilization. And so it continued to do through the back end of the twentieth century and into this one. 

Before that, the notion that murder is wrong because every human being is made in the image of God was a long-held axiom, going back arguably to the first chapters of Genesis. And in killing the image of God, any image of God, this may therefore be the closest we can come to killing God himself. Seen in that light, murder is sacrilege on an appalling scale.  

But there’s the rub. That light has dimmed. The secular philosophies of the nineteenth and twentieth centuries have turned down the dimmer-switch, so that it is no longer axiomatic that humans possess an inherent sacred value. Instead, in varying guises and to varying degrees, the conclusion has been that humans are nothing but self-conscious lumps of meat. We (the state, the law) may ascribe them some value. “We are all equal,” yes - but as George Orwell anticipated, “some are more equal than others.” (Is intersectionality, for example, anything but the manifestation of that prediction?) 

Maybe this explains how the horror of murder has diminished from Sonya’s heart-wringing cry, into something more akin to a crossword puzzle. Don’t get me wrong, I love a good Agatha Christie. But her murder mysteries don’t waste much time on the philosophical implications of, say, the local doctor bumping off the parish priest. 

And from there, the genre of the murder mystery has split into two strains. On the one hand, we get the psycho-thriller, in which the horror of the act of murder is of less interest than the dark psychological state of mind of the killer themselves. But if that’s too dark, don’t worry. We can do light, too! And so on to cosy crime blockbusters, in which, if a murder was committed, it was because the victim had it coming – so let’s all calm down and have another slice of cake. 

There is no space here in which to explore how, as a culture, our collective historical experience may have helped to steer us in this direction, as well as our changing philosophy. But there is no doubt where we have ended up. We see death cults all around us. We see legislation being passed in our Parliament which would have been unthinkable until very recently. We see social justice where before we saw crimes.  

Think about how often the arch-crimes of history have been perpetrated on the ground of viewing the “other” as less than human, and certainly less than sacred. Then ask yourself, why should we see any human as more than a lump of meat? At what point does the rubber hit the road? - as surely it will. 

What have we done? What have we done to ourselves? 

I do wonder where all this goes. And yet, if the spiritual bellwethers are to be believed, perhaps we have reached low tide at long last – certainly it has revealed some pretty ugly creatures lurking at the bottom of the rock pool. Many, myself included, must hope that the tide of faith is truly on the turn. Let’s see. Certainly, if this proves to be the case, it seems to follow that our attitude to murder will change with that on-rushing tide. And so with it, the literature of darkness. 

Beyond The Thursday Murder Club, there may yet be other great stories told of murder; they, like Crime & Punishment, will be far truer, and in a paradoxical sense, far more beautiful. After all, at the heart of the gospel, there lies a murder. If God himself can take such a dark event and turn it into light, then, at a far inferior level perhaps, as His image-bearers, so might we. 

Which reminds me… back to my draft.

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