This column appeared in the Jersey Evening Post on 2 May 2016.
It is a touchy subject, taxes and government finances. Yet, as citizens of democratic societies, a debate about this seems healthy and even necessary.
Progressive taxation in Europe was long considered to be the backbone of our democratic systems. This form of taxation is based on the principle that the highest earners shoulder the biggest tax burden and also on the idea that wealth which has been extracted from society should be recirculated to benefit society as a whole. Progressive tax systems lay at the heart of the welfare states created after World War II which brought the age-old dream of social equality closer than ever before.
We have seen a gradual hollowing-out of these principles. The assault on our welfare states has been sold to us by arguing they are no longer affordable. We must compete in a globalized economy and therefore we cannot expect to manage our own wealth redistribution any longer. The power of national governments has eroded in the face of global competition and free markets.
So now we need two wages to raise a family, although having children is a challenge. Employers in Jersey generously offer two weeks of maternity leave to women. Two weeks?! No wonder many women choose not to return to work. The figures for post-natal depression are high on the island. A coincidence? And what about childcare? The mere suggestion of slashing our free twenty hours of nursery care caused an uproar among Jersey parents. And understandably so. Having children has become all but unaffordable.
Is it a coincidence that under the progressive tax systems of Scandinavia, parental leave is often as high as a full year? Scandinavian countries score high on gender equality, not to mention a whole range of other social indicators as well.
And if we’re lucky, we even get to educate our children. Or not. With the recent hike in tuition fees for UK universities, higher education has become somewhat of a privilege. Is it not advantageous for our community to educate our young generations? Could we possibly imagine a situation in which international businesses, who now pay zero tax, would contribute towards educating Jersey youngsters? Seems like a fair deal to me.
For too long now, globalization has produced extraordinary benefits for the very wealthy, but a multitude of threats for ordinary working people. Their jobs, pensions, educations and healthcare are being eroded by wealth which is absorbed, rather than recirculated. Wealth is sitting idly in offshore funds, growing fatter, while middle classes are disappearing everywhere and inequality is steadily growing.
Our States insist that the 0/10 tax regime is beneficial for our island, but who does it really benefit? As island dwellers we understand that castles made of sand fall in the sea, eventually…