George Osborne is a spectacularly wealthy man. That’s not my biased and tribal assessment of things, or if it is, it’s at least backed up by facts. Every MP earns more than twice the national average salary. That makes them all well off (I can hear them disputing this as they read it, but it’s true). In additional George Osborne receives an extra £80k in his role as Chancellor. That means his combined salary of around £145k is more than 5 times the average UK salary.
He’s a very wealthy man.
On top of this, Osborne has a personal (largely inherited) fortune estimated in the region of £5 million. Much of that is through a stake in the family wallpaper company.
This morning on the Today Programme, the very wealthy Chancellor of the Exchequer was asked if he would benefit from the top rate of tax. He said he wouldn’t. He’s right. His “income” is under £150k, although the amount of money he accrues each year may well be far higher, but taxed at a different rate.
So to summarise, George Osborne, a very wealthy man, cut income tax for those whose income is even higher than his, because he thought most of them were avoiding paying the proper level of tax anyway. And then to compound that, consider for a moment that our tax system does not consider George Osborne (who is a very wealthy man) a top rate
The Chancellor has therefore inadvertently and brilliantly made three points in the past 24 hours that may be of interest to Labour and the left.
1. Tax avoidance is rife at the top end – and has a much greater impact that benefit fraud at the bottom end.
2. The top rate of tax is so incredibly exclusive that even someone earning 5 times the average national salary isn’t covered by it (meaning it’s a tax rate for the super rich).
3. Income tax alone is no longer the only useful tool for determining a fair rate of tax, or for implementing redistribution, if a multi-millionaire like George Osborne is not a top rate taxpayer.
Point 3 is especially important, and makes the case for taxes based around wealth and ownership rather than just income. Some on the Tory Right have already begun to advocate this.
So thanks George, for so brilliantly making the case against our flawed tax system – which even before your millionaire’s tax cut proved to be totally inadequate. Ed Miliband may well have been wrong to argue that the Tory front bench are top rate taxpayers (at least now) – but he has pushed the debate onto ground that is very uncomfortable for the Tory leadership, and potentially very fertile for the left.
It’s ground that we must take hold of in the days and week ahead.