'Progressive taxes are not a brake on economic development, but bring enormous societal benefits'

- Advertisement -

By John Pinel

IN the last quarter of 2022, the oil producer Shell spent more on marketing and four times as much on shareholder dividends, as they invested in climate solutions.

Their profit over the whole year was over £32 billion. They invested around £2.8bn in renewable energy, gave shareholders £21bn and spent £10bn on fossil fuel development. They spent almost £4bn convincing us that they are working for our benefit while avoiding windfall taxes to help people in fuel poverty. Their chief executive officer earned over £17m.

In 2021, Shell were responsible for producing around 70 million tonnes of carbon dioxide (CO2e) from their operations while it was reported that they didn’t pay UK tax at all between 2018 and 2020, but received millions of pounds in government subsidies.

The recent Oxfam report, Survival of the Richest, details some statistics about the world’s wealthiest people. They state:

  • ’Since 2020, the richest 1% have captured almost two-thirds of all new wealth – nearly twice as much money as the bottom 99% of the world’s population.

  • Billionaire fortunes are increasing by $2.7bn a day, even as inflation outpaces the wages of at least 1.7 billion workers, more than the population of India.

  • Food and energy companies more than doubled their profits in 2022, paying out $257bn to wealthy shareholders, while over 800 million people went to bed hungry.’

We need a new type of economics for the 21st century to ensure that everyone benefits from a civilised society. Progressive taxation reduces extreme inequality and the environmental damage which blights the planet. Liz Truss’s devastating experiment of cutting government services to pay for tax cuts crashed the UK economy overnight. Advanced societies don’t work when they slash taxes on those who can most afford to pay them.

Modern income tax was introduced only in the nineteenth century and it is important to remember that government services have included healthcare, education and a social security net for fewer than 100 years. Before that, people were largely left to starve on their own. In the past it was normal that the powerful accumulated all the wealth and for the remaining population to struggle as best as they could. It took two world wars and the deaths of millions of people before reforms, paid for by high taxes, enabled our modern society.

The world has seen an incredible 70 years of economic growth and rising living standards. Since 1948, when the National Health Service was created in the UK, life expectancy has risen by 13 years. In 1948, there were 36 per 1,000 deaths of children under one year old. Today that figure is around four. It is taxes which have paid for this huge increase in our quantity and quality of life.

As the old idiom states ‘nothing is certain [in life] but death and taxes’. This isn’t entirely true if you can afford not to pay them. In civilised societies, death may be inevitable, but it is supposed to be the poor who are exempt from taxation. It is not surprising that the super rich and corporations seek to cut taxation on themselves, while ensuring that the less well off continue to pay income tax.

Rates of global poverty, which have been declining in recent decades, have started to rise since the Covid pandemic as society’s wealth is now concentrated into fewer hands. The world has hardly met a single target of the Paris Climate Agreement and carbon dioxide pollution continues to rise. None of the world’s targets to halt extinctions have been met and populations of wildlife are declining as forests get smaller and the oceans become hotter and more acidic. Our advanced civilisation has started going backwards.

Progressive taxes are not a brake on economic development, but bring enormous benefits across society. We need a new type of economics for the 21st century to maintain public services and give fair wages to the people who provide them. Civilised societies lift people out of poverty, reduce pollution and fund adaptation to our changing climate. For all the economic growth, 20th century economic policies have succeeded only at the expense of our environment.

  • John Pinel is a freelance ecologist. In the past, he has travelled widely, covering thousands of miles by bicycle but also building his own carbon footprint with international travel. He has had many jobs, from finance to pizza chef, including over 20 years in various environmental roles for the States of Jersey, the last ten as principal ecologist for the Department of the Environment. He is now active in a number of local and international non-governmental organisations and campaigns for social and environmental justice. Twitter: @johnepinel.

- Advertisement -
- Advertisement -

Latest Stories

- Advertisement -

UK News

- Advertisement -
- Advertisement -

Read the latest free supplements

Read the Town Crier, Le Rocher and a whole host of other subjects like mortgage advice, business, cycling, travel and property.