Tax the Rich – Save the Planet

One thing that became crystal clear in the COP26 negotiations was that tackling the climate crisis will cost a lot of money, and there is nowhere near sufficient on offer. This was made even clearer by the latest IPCC report, published earlier this year, which shone a light on what scientists know of the climate impacts, risks and possible adaptations affecting the world.  Another clarity is that the poorer nations have a strong case for reparations, for ‘loss and damage’, rather than loans or even grants.

On top of this, the impact of Covid, and government responses to it, has hit many countries, businesses and people hard: whilst the wealthiest often benefitted financially from events, those less well-off have really struggled. And the terrible situation in Ukraine and Russia, whilst chiefly a human tragedy, also has knock-on effects for the planet’s economies – as do many of the world’s conflicts. There is so much damage to mend, so much to do, and it’s going to cost so, so much. But – where can the money come from?

There are three potential sources of funds, Governments, corporations and wealthy individuals, in particular the 1%.

Developed countries are rightly under pressure to deliver, a figure of $100 billion has been promised, although not yet provided. Companies are equivocal, claiming to be amending their investment programmes and business plans, but not yet willing to produce the appropriate figures in their annual reports. Church investors have a clear role to play here, even if they have divested. 

In relation to individuals, the Tax Justice movement is linking increasingly with the Climate Justice movement to address both the major alarms in today’s world, the climate emergency and increasing inequality. We urgently need a tax system which will show that all are contributing appropriately to both climate justice and human justice.

Two years ago, the World Council of Churches, along with the World Communion of Reformed Churches and Lutheran World Federation, at a Consultation in South Africa conceived the idea of a Zacchaeus Tax, a tax the rich would pay in recognition of the way resources had been extracted from the poor over centuries. Even if they didn’t repay four times over, like Luke’s little tax collector, it would go some way to acknowledge history.

There is unfortunately little sign of willingness for reparations among the wealthy of today, although some are making philanthropic gestures. However, one group bear some resemblance to Zacchaeus, the Patriotic Millionaires. They want to pay more tax because they know public services and planet need the money. Recent research by the UK group found that the wealth of UK billionaires has grown by 22% since 2020, now totalling nearly £600bn and the wealth of the 250 richest UK citizens grew by £106 billion over that year.

CATJ works with the ‘tax justice family’ in the UK – Tax Justice Network, Tax Justice UK, Fair Tax Foundation, and others – to seek to add a moral and theological dimension to the tax debate. The latest campaign for a Wealth Tax shows recent Government tax policies once again favour the rich. They also damage the environment by continuing to freeze fuel tax, and even cutting taxes on domestic flights.

To pay for health and social care, instead of a 1.25% increase for all, the simple extension of National Insurance to cover all income equally, including landlords and pensioners, could raise £31bn a year. Even better Capital Gains Tax – a means by which the wealthy avoid tax – could have been brought into line with income tax.  Recent analysis by Professor Arun Advani on the 540,000 richest individuals – the top 1% – suggests this would raise up to £16bn a year. It is also the case that the carbon emissions of the 1% are thirty times greater than the 1.5 degree target, temptation needs to be removed.

The richest of course make liberal use of tax havens such as the Cayman Islands, Bermuda and the British Virgin Islands – all British Overseas Territories, although the role of the City of London also figures large. The Panama, Paradise and now Pandora Papers have shown what the rich get up to. An urgent requirement is Registers of Beneficial Ownership, the UK Government said in 2016 these registers should come into being, but tax haven resistance is delaying it till 2023. MPs are currently pressing the Government to end the purchasing of UK property to avoid tax in the Economic Crimes Bill.

In relation to governments and corporations, campaigners have been pressing the Organisation for Economic Co-operation and Development (OECD) and the G20 to bring in a global tax deal. This has seen partial movement, with a multinational tax rate of 15%, but research shows this is far from adequate, there are many fudges in the small print and countries like Kenya, Nigeria, Pakistan and Sri Lanka have refused to sign up, saying the proposed system benefits higher income countries the most.

The current global economic system is profoundly unfitted for the current crisis. We live in a deeply sinful, even demonic world. Salvation may lie in moving towards a fair and equitable tax system. If the majority of the wealthy – both individual and corporate – continue to be so resistant to following the example of Zacchaeus, and paying their fair share, Governments – and Churches – must help them. As well as closing the gap between rich and poor, a just and proactive tax system could provide the resources to save the planet.

 

This is an edited version of a talk given to an Ecumenical Panel during the COP26 ‘People’s Summit’, by Revd David Haslam, Former Chair of Church Action for Tax Justice.

We want to see a world where money is used to shape a fairer, greener future. With your support we can continue to resource and equip Christians across the UK to better connect their faith and finances. 

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