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. 

Short story
Comment
Wildness
18 min read

The Eagle - a new short story

A fable.

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

An eagle wheels against a purple stormy sky cut by lightening.
Jason Hudson on Unsplash

I dreamed of an eagle soaring high over a verdant valley. The sun blazed and splintered into a thousand sword-points of light, spilling with joy and gladness over the slopes and streams, over the hanging woodlands, and the orchards growing there and carpeting the floor.  

There was gladness in the heart of the eagle too. The valley was good. The valley was secure. With his piercing eye, he kept watch over his brethren. The animals of the valley fed and met and played and slept. The smaller birds swooped and spun in the barmy air far below him. All was well.  

And then to the east, to the east his eye was drawn. A cloud rising in the east. A change was come. Black billows, dark with portent, rising skeins of thick grey smoke. The land that way rose to an upland pass. The little valley came tumbling down from its heights. To the north, a jagged range of peaks, black and sharp as wolf teeth. To the south the same, shutting the valley in. Protecting its flanks. But by the eastern horizon, a way did lay open. And now the eagle saw burning flames. A fire raging, devouring flame racing over tree and scrub, tearing at the grass, a snarl of heat and swirling smoke. A consuming fire. An angry fire. A fire fuelled on resentment, blown by the winds of hate. A fire hungry for the valley and everything in it.  

The gladness in the eagle’s heart vanished in a moment - as if it, too, had been burned to ash in the raging blaze. The eagle watched the flames claw their way down the upland spurs of the valley. Disquiet now ruled in the place of gladness. His piercing glance dropped to the animals frolicking in the valley below, but they saw no danger. They knew no danger. They knew nothing but that he would tell them was to come. 

At last his cry broke from his throat. He looped back on the burgeoning wind, circling round the better to send his shrill warning spiraling down to the verdant floor and its folk. But to his dismay, not one looked up. Not one took heed.  

And now to the west his gaze rose. And his disquiet turned to horror. 

For there the mirror to the eastern pass did lie. Smooth, lower, a lesser rampart of earth and rock. The easier to scale. And seeping, creeping over its worn shoulders came a foul and noxious fog. Purple of hue, odious even to the eye. Yet the eagle needed no telling that it would be fatal to the lungs. A cloying, lying, coiling fog, slick to the touch, choking and blinding in its confusion. And something in the look of it told the eagle it was yet more than this. A maddening fog, a self-devouring, self-immolating poison, which once inhaled could nevermore be expelled. 

Once more, his cry rang out around the four walls of the valley. Once more, the animals below did not look up from their play, from their busy, busy play…. 

Seeing their oblivion, he fell on them with such force and directness that he risked his own neck. For only with skill and strength could a bird of his dimensions flare out from such a death-dive. His throat burned in his effort to scream his warning. But only at the last did any of the valley-folk look up. 

Those that saw ducked their heads and took fright to see this terrible sight. The little ones especially, the soft-hearted ones, the natural prey of great predators like himself. Wails of fear broke from the lesser throats. They cringed and hid and some even were angry. The mothers rushed to their young. The fathers bristled and ready themselves for a fight. Shocked and afeared by this sudden threat to the peace of the valley, and the disturbance to the busy plans they had for their day.  

When the eagle pulled up and neatly landed on the peak of a small outcrop that broke from the valley floor, his voice was hoarse from his warning cries. The animals were bolder now, seeing the flash of danger past. And as the tide of fear receded in their hearts, seeing the threat was not as they feared, it left behind sharp stones of anger and indignation.  

“What do you mean by this horrible screaming?” the first of them did demand. “You puffed up popinjay! You scare the life out of us with your terrible aspect and the dizzying violence of your approach.” 

“It is only of necessity,” he began, breathlessly, “on account of what I saw—“ 

But he was not allowed to finish. In one united and sudden clamour, all the animals, emboldened by the first, unleashed their fear (together with their indignation) on him, so that none could truly have heard what any of the others had to say, or even what came forth from their own mouth. 

“Renegade!” 

“Bully!” 

“Impostor! Attacker!” 

And there was worse. “Murderer! Villain! Terrorist!” 

“There is blood on your hands!” 

“But I tell you - from my great height, among the peaks and the thinning air, I saw something none of you can see,” he pleaded anew. 

Now the clamour turned to jeers. “Oh, you saw, did you? You who see so much indeed!” cried the first of the animals. He was a fox who always liked to have the highest place in any council. And yet had not, even now, gained the trust of the eagle’s heart. “You always did think yourself superior to us earth-bound folk.” 

“That thin air has gone to his head, if you ask me,” said the king buck of the forest. “What he mistakes for clarity is nothing better than a spell of dizziness. Besides, no one asked him to look out for us, did they? We have wisdom enough for ourselves. We know our world. And look to ourselves as needs will be.” Here the noble-looking stag gave the twelve points of his antler-crown a flourish.  

“Get away, you hook-beak menace!” cried a creature from the crowd.  

“Stop stirring up trouble, you screeching flapper,” scowled a second. 

“Back up to your lofty skies, you preening prig,” sneered yet a third. And soon all the animals were hurling the worst of their insults at the eagle, seeing he was in no hunting mood after all, and glad for a chance to vent the spite they felt for many little things that had nothing to do with him. 

Frustrated at their stubbornness, the eagle glanced to the skies again. So often he had used his sharp eyes and sharper talons to win his way, but seldom his voice. He was not used to seeking sharp words withal to defend himself from such a barrage of slur and rejection. He looked to the skies again, always the place of solace for him. And there he saw but faint traces of the fire raging high and to the east. But then something else caught his attention. Some great shadow casting a gloom upon the air. In a moment, the caterwauling crowd was forgotten, and now in urgency, he beat his wings once more, his spiralling flight carrying him back up to airy reaches far above the valley, just as the valley-folk had scolded him to do. 

Only he went not at their urging, but in heed of a still more pressing call in his own heart. A dread of what could cast such a shadow, even through all the bright flames of the wild furnace that he had spied. He turned his head to the east, his eyes reaching and reaching deep into the billowing smoke and fire. And then he saw it. And his blood ran cold as the ice-water tumbling out of the hills into the valley below. 

A monstrous figure strode among the fire and the smoke. Tall as ten oaks from toe to head and with a flaming sword raised aloft. The monster had the body of a giant, and yet its head was that of a bull, double-horned, and snorting great angry blasts of flame from its nostrils, its eyes green and flashing like emeralds that held the sun. Its huge limbs swung with grim purpose as it drew closer, striding down from the upper reaches of the valley. Hulking shoulders with bulging veins that glowed red and gold and copper, as if the hot blood of hate were like to burst clean out of its char-black skin and shower the land with its poison. 

For a moment, the eagle’s steady gaze faltered, feeling some unfamiliar tremor through his heart. Fear. For so it must be. Fear so deep he knew not where to turn. 

But then his wits caught up with him at length. And at the sound of a long and sibilant sigh on the breeze from the west, he banked that way now. And to his horror, he saw thence too came striding a figure wreathed in the purple fog. Not so large as the bull-headed giant, and yet unlike that titan of shadow and flame, this one possessed some strange inexorable draw, so that the eagle found once his eye had settled on its shimmering shape, he could no more have torn it away than he could have stopped the earth from its turning. 

While the eagle would have flown far from the fiery giant, the shifting silver and purple shimmer on this other was in certain ways more terrifying. Its head was crowned with dark jewels over long and flowing silver-white hair. Its eyes were simpering and womanly in their glance, yet something hard and cold lurked in their centre, too, even as a mirthless smile played over a curved and shapely mouth. As if the giantess held some joke over all the world, some secret which amused her only. Beauty corrupted, pleasures perverted, good things turned to wicked. These things and many more the eagle read in her wanton gaze. And as she walked the purple fog swirled around her silver-slick limbs, clothing in a way her modesty, yet inviting all the same. And the eagle felt the twin goads of revulsion and yet its mirror. And only by chance noticed that even from so far, the scent on the fog, both sweet and yet putrescent, was putting lead in his eyelids. For a moment, he felt his head loll in weary sleep, a thick narcotic lethargy leaching all life from his steel-strong sinews and suddenly he found his flight was stalling, stalling… and only by the roar of the rushing air did he realise he was falling to the crushing earth.  

With force of will he had never before had need to call upon, he wrenched his wingspan to its fullest stretch, and braced his mighty shoulders to catch the air and snatch him from his doom. At least for now. Shocked at his own weakness but recovered, he now flew like lightning-bolt, arrow-straight, to the valley meeting point, whence bare moments before he had been expelled. 

“Alarm! Alarm!” he cried again. And this time, he would brook no silencing. “Alarm! Alarm!” he shrieked, with the last gasp of his breath. 

“You again,” went up the cry. And much that was far worse. “Did we not rid ourselves of you once and for all time?” barked the fox. 

“You solitary creature, go back up to your aerie,” declared the noble stag. “It is with good reason the Great Maker gave you a hermit’s home far from the valley floor. For in his wisdom, he knew none of us earth-bound folk could abide your company. No, nor should we have to.” 

“That may be true,” confessed the eagle. “But heed me all the same, just for this moment and but a few more. I see you from my height above and though you care not for me, I have long learned to care for you. And just as you say, I abide in the Maker’s will. He has given me eyes to see and a lonely nature, whereof I soar on the wind He breathes, and far-seeing I may behold things which escape the eyes of you lower folk.” 

“Lower!” jeered the wolf. “Hark at him! There all the truth is known. He thinks himself a higher breed to us forest-dwellers.” 

“Nay, far from it,” pled the eagle, seeing he had misspoke. “I come not to bandy words but only to warn that you may flee the coming purge.” 

“What purge, you feather-brained scoundrel?” 

“Death descends on all of you who dwell in the valley-floor,” he cried, his voice shrill. “A poison out of the west; dread fire from the east. They burn, they choke, they lay to waste all that lies in their path. And they mean to meet here in this green valley to some foul purpose, I am sure.” 

“Peace now, my brother of the wing,’ said a new voice, and though ready to shout down the eagle for their own part, all the gathering of animals turned to see one who perhaps had been there all this time. Yet only now had spoken up. It was the owl, sitting calm and moon-eyed, surveying the scene as if such fractious business barely concerned him. “Peace, I say.” It was as if there was a gentle, coaxing smile in his voice. “I, too, have flown higher than these other valley-dwellers. I, too, have felt the winds upon my beak. In all that I have seen; in all that I, in my wisdom,” - here he looked around as though to say, ‘does any here doubt it?’ - “have ever known, there is no true danger come to fall upon us. None but which we stir up among ourselves. Through misunderstanding, through a lack of love. Come, my brother of the wing. Admit thy mistake. It is no fault of thine. Imagination is a tricksome friend, I know. And indeed, who can truly say what they have seen at such heights? The fault would merely be not to admit to thy mistake. I tell you in all my journeying, I have seen nothing of these threats. Take counsel from wiser, older, gentler souls.’ 

“Nay,” insisted the eagle. “The difference is this. You fly by the light of the silvered moon. I fly by the sun. You see but by the reflected light falling upon a dead and mute circle of rock. I see by the light of the burning sun itself. Tis not the whole, you see, but mere shadows and play of darkness. I ride the wind, and see what the wind would show me.” 

At this, the smile in the owl’s voice leached away. “The hot wind of the fire you feel is the wind of the great eternal spirit calling you to love all of creation with a fiery love. Calling you to a warmer love of your fellow creatures. And as for the fog, you have it wrong there too, sir. ’Tis the sweet scent of compassion you smell, calling you to a compassion for all those things you do not yet understand―” 

“I understand them well enough. Well enough to perceive the danger―” 

“Silence!” the owl abruptly shrieked. “I had not finished speaking.” And here, the glare in his moon-eyes became sharp as flint. “Your hard days on the wing have hardened your heart. The thin air up there has made your heart cold with lofty conceit, and distanced from the rest of the Maker’s world. Truly you see only your own great capacity to soar, and think it makes you far-seeing, while the rest of us are blind. No, it is not by light that you see, but by ignorance. Your mind is closed because you do not open it to other ideas and influences, as I do. It is I who truly loves these valley-folk. I who converse with them, and learn from them. I who never judges them.” 

“But the fire!” cried the eagle. “But the fog!” 

“Silence!” returned the owl, and this time his voice carried real authority. “You say you see only by the sun, do we all not live under that same sun? Nay. Be humble now. Be silent for a time. Learn from those older and wiser valley-folk. Be silent, I say. We have indulged thy fanciful whims too long.” Here, the owl’s domed head swiveled in the direction of the stag. “Your grace, it is time for a little discipline. We winged creatures play our part, but the Maker has ordained thee king over us. This is known. The Maker means for all of us to submit to the sting of discipline now and then. Such may do us good.” He turned back to the eagle, and there was a sarcastic edge now in his voice. “Or do you consider yourself too good even for that? For such as the rest of us must endure?” 

“No, no, a thousand No’s!” replied the eagle impatiently. “I take my discipline when discipline is what I need. But see, even now, the towers of smoke rising in the far heights. Look, can you not see?” He gestured eastward with his great wingspan, but most of the gathered animals merely laughed at his madness. Any who did happen to glance that way had not his vision and saw nothing but the azure sky. “If it is falsehood I see, then I would gladly see myself corrected. But, by all the stars, I am not lying. And more, I see it true!” 

“He is a lost cause,” said the sly fox, for he had never much cared for the eagle. “Come, we waste time. Let’s get to the disciplining, and right quickly. I have an idea this one may lose patience, and then see - the sharp hook of his beak. The razor points of his claws. What mischief might he play with those when he chooses? See these little soft ones hereabout.” He gestured to the woodland creatures, the rabbits, the shrews, the squirrels. “He is a danger, this one. To every decent forest-dweller. Aye, and even to himself, I dare say. Look at them! Poor lambs - quite terrified out of their wits, they are. Terrorized half to death!” 

And it was true - there were some of them did seem alarmed.  

“Quite right,” agreed the stag. “Well, there be nothing for it but to teach the eagle his lesson.” And before the eagle had thought enough for his own safety and not the others, there was a guttural growl beside him, and suddenly the weight of the wolf’s claws upon his back, the hot billow of lupine breath as iron jaws closed around his neck. 

“To the punishment stone!” the fox cried heartily. “We’ll make of this one a milder creature before the sun is set!” And at once all the crowd of them took up his cry.  

The eagle found himself borne upon the tide of anger, mauled and spat at and scratched. But the wolf was strong, and dragged him with relentless might to the place of his ordeal. 

And yet, all the while, his fear was not for himself. No, it was still for his fellow creatures. For now, he could even smell the rank sweetness of the giantess’s noxious poison. For now, he could even hear the crack and spit of the rushing fire tearing through the forest. But the other animals were too distracted. Too fixed upon his own fate, and what they would see done to him. 

And a terrible lament rose within his heart: that he had failed. That seeing, he had yet wrought no good. His moment had come, perhaps the one moment for which the Maker had given him life, had given him wings to soar and eyes to see - but all he had won was his own demise. And then he thought, “So let it be. It is no more than I deserve, after all.” 

It is terrible to relate what those gentle, placid valley-folk did to the eagle in those following moments. Once they had bound him and raised him up for all to see, the fox and the wolf went to work. They pulled from his golden feet those proud talons, each and every one brandished and mocked and tossed down among the baying crowd. They bit him and tore out mouthfuls of feathers to spit back in his face. They broke and snapped right off the sharp hook of his beak, yelling with glee that he could hurt no other creature now.  

They worked on him for a long while, so that the sun had fallen low behind the western pass, and the sky was purpling like a spreading bruise across the heavens.  

“Better cut out his lying tongue,” said one. This was the owl, whose moon-eyes seemed greener somehow in the fading light. “The better to avoid discord among the good peace-loving folk of the forest floor.” At this, went up a rousing cheer. The idea seemed pleasing to them all. And so his tongue came out, and was thrown down as had his other parts. 

The eagle endured his punishment without a sound. Although inside his heart was weeping. But now he could never tell that he wept not for himself, but for all of them.  

“One more thing,” declared the noble stag, looking regal and solemn, his crowned head held high and strong. “His eyes must go, for it was they that caused all this trouble. After that, clemency. For we are not cruel of heart. We merely wish to preserve the peace and order of the valley.” 

“Allow me,” sniggered the fox to his partner in the punishment, and the wolf stepped graciously aside. 

The eagle looked not at his tormentors in that moment. Instead, his far-gaze searched one last time the blackening skies. Searched for an answer to the fire and the fog. Searched the heavens for some single shard of hope. For he knew now, no aid would come to his kindred creatures from among themselves. 

The fox flexed a claw. Flashed it before the eagle’s gaze. But he did not care to look at that. And the next moment was one of searing pain. One eye now was gone. But he minded it not. He could not cry out in any case, for his tongue lay severed in the mud. No, he still looked keenly upward with the last eye left to him. 

And then - as the fox made much of this final climax to his work, japing and frolicking before the crowd - he saw something. He saw a wonder. For though the sun had long set, some other light now appeared in the gloaming. No rising sun was this, for the light came not from the east, not even piercing through the smoke that now stained the night far above the heads of the foolish creatures below. No, the light rose in the north. Why? How? the eagle pondered, while the fox still milked his crowd. 

A second sun rising in the north, light building and building, though by now it should almost be night. Splinters, shards of colour, white and gold of searing brightness, like an army pouring over the high ridge of mountain peaks, the bulwark to the verdant valley. And with the light he saw, in the last seconds of his sight, a light that was all hope and power and blessing and glory and goodness and beauty.  

And though he knew that these next moments would be the last he would ever see, I saw in my dream that he was at peace. Because, though he had failed, his heart was certain that the light would not.  

A new light was rising in the north. A new sun had come. 

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