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Taxing the Poor in Britain

The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.

This is from a recent Guardian article, the first installment of a series of stories on just who is keeping their wealth where — and it’s all about avoiding tax. I’m still getting used to ‘tn’ — it’s fairly impossible for me to think in trillions.

An Oxfam report released in January this year takes a hard look at what drastically increasing inequality means for our world, their press release headline is ‘Annual income of richest 100 people enough to end global poverty four times over’.

The folks who can’t escape taxes are the poor. While Britain has been facing an all-out assault against the welfare state since the Tory-Liberal Democrat coalition took power (though New Labour did a fairly good job in its own time), it has taken the form of spending cuts and the privatisation of government services to this point. On April 1st, the assault ratcheted up with an array of new taxes taking effect.

guardian

You can read the full article here, but below is the list of the changes happening in April with punchlines:

Bedroom tax introduced: Taxes spare bedrooms of those in family housing, even though there is not enough social housing left for people to downsize and remain in their community. As many as 660,000 people in social housing will lose an average of £728 a year. 2/3 of these are disabled.

Thousands lose access to legal aid.

Council tax benefit passes into local control, and reduced by 10%. The poorest could see their local council taxes increase, depending on the decision of local councils whose budgets have also been slashed.

NHS commissioning changes for ever – opening up the privatisation of the NHS.

Disability living allowance scrapped – they’re replacing it with a system of less money and more hoops

Benefit uprating begins – For the first time in history welfare benefits and tax credits will not rise in line with inflation and will instead for the next three years rise by 1%.

Welfare benefit cap

Universal credit introduced – The new in- and out-of-work credit, which integrates six of the main out-of-work benefits, will start to be implemented this April in one jobcentre in Ashton-under-Lyne, Greater Manchester. The aim is to increase incentives to work for the unemployed and to encourage longer hours for those working part-time.

But for the wealthy?

50p tax rate scrapped for high earners – Labour claims 13,000 millionaires will get a £100,000 tax cut.

An open letter published in the guardian and signed by 50 social-policy professors urged the government not to push forward these changes, stating that it would push a further 200,000 children into poverty. As reported in the Guardian, the Child Poverty Action Group found that ‘These new reforms will take £2.3bn a year out of the pockets of some of Britain’s poorest households in 2013-14 alone’

It’s disgusting. And hard to believe. Much of it has been made possible through a media blitz demonising the poor and those receiving benefits. Comedian Mark Steel wrote a brilliant article that captures just what has been happening (and helps you release some of your bile just reading it):

It’s a tricky argument to pull off, that the poor caused the debt so they should pay it back. Maybe that’s why most weeks there are stories in certain newspapers about a woman with 45 kids on benefits, who then bought a giraffe and now that’s on benefits but she said it was cramped so the council has put it up in the Shard, and two of the kids have got Compulsive Potting Disorder so they’ve been given a snooker table but she couldn’t be referee because she’s allergic to white gloves so the mayor has to do it, otherwise he’d be put in jail by Europe.

Then they quietly drop the story when it emerges that the reporter missed out the detail that although it did happen, it was in a dream he had while suffering from food poisoning.

There is a growing fight back of course. Here in Brixton we’re a little behind folks up North I think, but we still made it out on a snowy (!) March Saturday to start educating people about the taxes about to hit.

March 23rd, 2013 - Lambeth SOS Stop the Bedroom Tax

A much wider range of organizations have started to collect stories and information about the regional efforts to fight back. False Economy has published a great listing of links and additional information, calling this April’s taxes and cuts a perfect storm. Councils in Brighton and Hove have come out to publicly declare that they will not evict anyone over the bedroom tax. Other councils are ‘re-designating’ flats as having one bedroom less. Sadly, Lambeth Labour has said they will implement them to the full, even though our community will be hit extremely hard. The Brixton Blog recently published a great piece on just how, with a byline ‘Schools fear mass exodus as 264 children affected by new cap and 6,000 extra homes to pay tax’.

So the fight is on, both to keep people in their homes, and to reclaim a society that believes in health, housing, and support for those most vulnerable. In the words of J.K. Rowling (from a photo making the facebook rounds):

rowling

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