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. 

Review
Art
Community
Culture
5 min read

Ceremony's superpower is on show at Berwick Parade

Reinventing historic touchpoints between faith and community.

Susan is a writer specialising in visual arts and contributes to Art Quarterly, The Tablet, Church Times and Discover Britain.

A projected image of a person dressed as a mermaid being pushed on a trolley falls on the wall and windows of an old barracks.
The Maltings (Berwick) Trust, Jennifer Charlton Photography.

Watch the parade

Ceremony is beating a retreat. Although wheeled out for major life events: naming newborns, marriage and bidding last goodbyes, and for grand state and civic occasions, standing on ceremony is frowned upon in day-to-day life. Ritual is treated warily, in case it creates an ‘us and them’ chasm between participants, seen as elite, and spectators, presumed to be condemned to disempowering passivity. 

But what if, far from alienating people, the power of ritual, ceremony and spectacle could be a force for engagement? The church and military both have a history of creating, reinventing and refreshing rituals to meet changing social needs. The army chaplaincy is an invention of the late eighteeneeth century, responding to the move towards more settled communities of soldiers, requiring spiritual support. Drumhead altars, a centrepiece of November’s Festival of Remembrance, have origins going back into the mists of time, but quite how far back it is hard to say with certainty.  

Processions and festivities for holy days are more apparent in Catholic countries, with Seville’s Semana Santa parades springing to mind, but well -dressing, May Queens, harvest festivals and Remembrance Sunday reveal a continued desire for entwining of church and community rituals, across faith traditions. 

Art’s ability to step into the ceremonial space and create moments of communion, as well as giving voice to underrepresented groups, has been evident since Surrealism. British Surrealist Eileen Agar’s crustacean strewn ‘Ceremonial Hat for Eating Bouillabaisse’, 1936, attracted collective gasps when she wore it in London. In Sao Paolo in 1931, Brazilian modernist Flavio de Carvalho had to be rescued by police when he walked, hatless, in the opposite direction of a Corpus Christi procession, and the crowd wanted to beat him up. 

Artists can also create spectacles of togetherness and joy. 

Berwick Barracks is a challenging site for community arts. The massive walls and monumental stone-grey interior of Britian’s first purpose-built barracks is reminiscent of eighteenth century experiments in prison design. Even the windows on the living quarters, confirming it is not a prison, are tiny-paned and meanly spaced, like an afterthought dotted reluctantly on the overbearing grey expanse. 

But over the weekend of Berwick Parade, the barracks’ forbidding walls turned into a living portrait of the border town. Under a piercingly brilliant starlit sky – it was the night of the six planet alignment – an audience gathered in the middle of the parade ground to watch themselves, neighbours, friends and family members move across the barrack walls. Artist Matthew Rosier’s projection at x10 magnification transformed the townspeople into giants, and the forbidding military structure of Berwick Barracks into a canvas for joy and creativity. 

Berwick Parade shows you can draw community from a stone, forbidding, large grey stones at that. Paraders and audience were dazzled and dignified, seeing themselves anew. 

The dancing, riding and processing images were soundscaped by music from the repertoire of the Kings Own Scottish Borderers, who have their ceremonial base, and museum, at the barracks, accompanied by the Melrose and District Pipes and Drums. Positioned by the main gate, the musicians set the expectation of spectacle with the rousing music associated with marching bands, as Scotland the Brave gave way to Mairi’s Wedding, and then a medley of upbeat, om-papa outdoors tunes.  

Over 30 minutes, topped by veterans of the Kings Own Scottish Borderers and tailed by hi -vis vest wearing Berwick Parade production staff carrying metal barriers, a parade including processing clergy and the Bishop of Berwick, conga-ing medics in scrubs from Berwick Hospital, brownies, boys’ and girls' football teams, civic leaders in mayoral regalia, Morris, Highland and flamenco dancers, and midlife wild swimmers, shimmied across the walls. Berwick Riders Association were filmed on small ponies, so the magnified projection would not crop the riders into headless torsos. A wheelchair user crossed the expanse of barracks wall wearing a mermaid’s tail. Everybody involved was simultaneously true to life and larger than life. 

Consisting of 850 characters, some of Berwick’s residents played more than one role. “Ooh there’s Cheryl again” commented a spectator next to me, as another pageant of figures travelled across barracks’ perimeter. 

Speaking to Rossier the following morning, he revealed Parade participants had been filmed in the barracks, travelling across a10 metre stage. Magnification made these sequences large enough to cover one wall of the rectangular parade ground. Editing and projection created the appearance of participants entering at one corner and disappearing around the next.  

Movement filmed across short distances opened up participation in the Parade to people with mobility and health issues, in a way that physically journeying around the whole parade ground, repeated over three nights, never could. 

Filmed over six bitterly cold days, choreographer Chloe Sayers had to keep participants’ spirits and energy up as they devised ways of travelling across 10 metres that represented their personality, role and creativity. Sayers specialises with creating events with the public rather than professional dancers, and says that enabling people to express themselves through movement in spaces not always thought of as welcoming, breaks down barriers and creates a sense of ownership. 

Some of the funniest moments in Berwick Parade were rare breeds sheep hogging the limelight like divas, and children clowning around with policemen’s helmets and clipboards. Rosier says primary school years are a sweet spot for performance. ”I love the energy kids bring. We had all age groups, but the six- to 10-year-olds bring so much energy. They just bounce. They have no inhibitions but are good at following instructions. At 12 or 13 heads start to drop and they become more self-aware.” 

Rosier drew on his Irish Catholic mother’s tradition of ceremony and celebration with food and drinking, whether for a wedding or a funeral, to make Berwick Parade a fun place to hang out - food stalls included - beyond the performance. “I want people to have a nice time and not be subservient to the thing they have come to watch.” 

Berwick Parade shows you can draw community from a stone, forbidding, large grey stones at that. Paraders and audience were dazzled and dignified, seeing themselves anew. 

At King Charles’ coronation, the church’s ceremonial superpower was on display to the world. And as artists demonstrate, ceremony does not have to be confined to great occasions. Churches in all traditions can draw on their legacy of historic touchpoints between faith and community, to reinvent, reinstate and refresh rituals to engage with people’s contemporary concerns and hope. 

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