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
Change
Community
Hospitality
6 min read

In an age of disconnection, I want to belong

Old rituals offer reasons to stay linked together even when the world is trying to pull us apart

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

Wassailers emerge from a shed beside a wood
Wassailing at Bourne Woods, Lincolnshire.
Bob Harvey, CCL, Geograph.

Once, I went to a ‘wassail’ on the edge of the city I lived in. A Wassail, from the Old English phrase meaning "be in good health", is a ceremony that involves toasting apple trees and scaring away evil spirits to ensure a good harvest, and it dates back to Anglo Saxon times. A man dressed in green and brown layers and leaves led the ceremony, passing around cups and cider for us to offer to the trees. We listened to stories, shared food. The event was ticketed. I was curious. But I felt out of place; a fraud stepping into this old ritual with no prior connection to these particular apple trees or this bit of land they were on, or to the people who surrounded them – trying to convince myself and others that I belonged. To what? To who? At the end, we all went back to our separate homes across the city, no more responsibility for those trees, nothing to link us to each other anymore.  

I’ve been advertised many events like this. Places to be celebrated through feasting, music and dance, entering into “ancient traditions connecting us to nature” – beating the bounds, toasting the land, enjoying seasonal feasts, listening to old stories. Photos advertising these events are like something styled for Country Living magazine, placing heritage rituals in high-end consumer settings; signalling intentionally or not that they are curated lifestyle experiences available to those who can afford them. They are part of the growing ‘return to the land’ movement that I often come across online, mediated through brands and influencers, curated retreats, Instagrammable countryside.  

I look outside the window towards our rural Devon village. It is grey and drizzly, and it will probably be grey and drizzly at harvest time. There will be no Instagrammable moments, but there will be deep roots that have grown slowly and are tended all year round.  

Perhaps these events signify an ache for a particular kind of rootedness. I have this ache. I am envious of friends who farm in landscapes their ancestors have inhabited for hundreds of years, of people who feel a clear sense of home and belonging. In the past, these feelings were often linked to community and to the faith and work traditions that bind community together: harvest home, Lammas, Rogation, saints’ days, midsummer. They weren’t boutique experiences open to anyone who could pay for them; they were communal and local, woven into survival, farming, faith, community. I am trying to carve out these feelings too. 

I have been wondering what we lose when old celebrations and rituals are curated, commodified, or disconnected from the deeper soil of faith and tradition that once sustained them. How do we celebrate the longing for rootedness without flattening it into a lifestyle accessory, stripping it of faith, memory, obligation, and mystery? How might old rituals help us to feel deeply hopeful and rooted in an environmentally and socially fragmented age?  

I think it can help to place these rituals in the context of place; of community; of faith. These contexts offer reasons to stay linked together even when the world is trying to pull us apart, even when I’d rather walk away. Without some kind of infrastructure of belonging, I think old rituals can become about consumption and lifestyle rather than connection to people and place. They become weekend events, or expressions of self, or a nice vibe – not a life’s ordering. Real ritual, I am coming to realise, requires weight; a tie to story, belief, and responsibility — not just aesthetic revival. A harvest festival in a rural, overlooked parish like mine may be small, strange and inefficient. It will not be photogenic, but it will connect me and others to a stream of 2,000 years of worship here, and before that to millennia of agricultural rhythm-marking. It introduces me to people and farms, to old stories that have lain dormant like relics in the soil, to possibilities for my own faith and belonging.  

I have been reading Paul Kingsnorth’s new book, Against the Machine. By ‘machine’ he means the nexus of power, wealth, ideology and technology that has emerged; a project of modernity “that is to replace nature with technology, and to rebuild the world in purely human shape, the better to fulfil the most ancient human dream: to become gods.” I suspect Kingsnorth would see the commercialisation of ancient rituals as a consequence of machine culture. Disconnecting the rituals from their origins and landscapes and relational ecosystems is to render them floating experiences, available to be purchased and claimed and bent to anyone’s will. A machine-friendly spirituality that strips mystery and, importantly, the cost of that spirituality – commitment, belonging, sacrifice, inconvenience.  

Kingsnorth shows that the razing of old stories, communities, and traditions created a blank canvas that allowed for the success of the industrial revolution, and so today’s materialistic and economically-driven culture. And so I see hope in the interest and resurgence of old traditions, in our hunger for roots, in the reclaiming of stories that were once trampled and forgotten. But I think it matters whether they are resurrected as machine-friendly buyable experiences, or as ways of being that seek continuity with something older and truer, something outside of today’s dominant paradigms.  

Anthropologist Victor Turner explored the ideas of liminality and communitas. Liminality refers to an ambiguous ‘between’ state where individuals are stripped of their usual social roles and statuses. Communitas is the unstructured social bond that emerges among people in this liminal state, creating a sense of equality, directness, and shared humanity that challenges formal social structures. Perhaps – in this time of climate change and AI and an increasingly unknowable future – we are all in a liminal space. Perhaps the revival of old rituals allows for direct human connection. Perhaps the wassail event, and others like it, encourages human connection in a fractured time. Perhaps they make the countryside into a sanctuary in unknowable times, and perhaps that is enough.  

The Christian story does these things too, but I think it goes deeper still – it sanctifies time itself, embedding the rituals and seasons in liturgy, creating a steady rhythm that can hold community together without being dependent on trends or tickets. It is a story grown from a sacred supper, shared feasts, prayer, fasting, seeds, and rituals of death and new life. It is a story that binds together its hearers into relation and rhythm-making.  

Christianity is not a neat ‘answer’ to the rootlessness and unbelonging of our time. But it offers old and tested examples of depth, continuity, and gratitude in ritual. It has of course long absorbed and re-shaped older rituals, born of older communities – like the Celts, who knew that place and time and land and people, animated by something beyond, could combine to create particular patterns and poetry which, when taken seriously, could deepen identity and togetherness with each other and the Earth. Christianity recognised this and built on it (and squashed it in places, but that is another story). I think that picking and choosing and bending old traditions, detaching them from time and place and cultural significance, even if just to remove religious baggage, reduces that old poetry to prose. It is no longer sustained by its original social and spiritual infrastructure.  

Such an infrastructure, built over generations, connects us to a through-line of celebration, gratitude, lament, and renewal. Following this through line – which whether I’ve liked it or not has linked me to new and old expressions of the Christian faith – is what is helping me to find belonging and participation. The wassail I joined signified to me that I’m still on the search for belonging. I want to go to a Wassail event again, but I want to do it outside of the ‘machine’, in a place I am putting roots into, with trees that I help tend, lifting bread around a harvest table with others I am working to know. I still feel a tug to these old rituals, as if assessing their ability to provide orienting infrastructure to my life and to the life of community. But in this age of disconnection – of industrial food, global supply chains, loneliness – what I want is less curated experience and more real belonging. I hope to find a bit more of that at harvest time.  

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