Wealth redistribution is good for growth | Letters
The reasons that Andy Beckett adduces for Labour foregrounding the redistribution of wealth are all valid and appropriate (Why is Labour so afraid to admit that we must tax the rich? 11 July).But there is one that is even more compelling and even more central to government priorities.Far from wealth redistribution being inimical to economic growth, there is overwhelming evidence – not least from international organisations like the International Monetary Fund and the Organisation for Economic Co-operation and Development – that redistribution to ensure a fairer distribution of income and wealth is extremely positive for economic growth, the main reason being that the less well off spend a higher proportion of their more limited incomes, whereas the better off tend to save or invest in their assets; there is no or very little “trickling down”.In fact, as a result of increased economic inequality, and even though interest rates remain historically low, the major anglophone economies continue to suffer a classic case of what Keynes called “underconsumption” due to the inability of the poorer members of society to keep up previous levels of demand for goods and services.Roger BrownAuthor of The Inequality Crisis The concept of “wealth taxation” takes up much space in the Guardian.
Too little mention is made of how it might operate.Governments need to look much harder at the concept of land value taxation (LVT) to overcome the prejudice and fear of what might be considered as “wealth” to be taxed.LVT is being seriously considered by the Welsh government and should be debated in England too.It would produce a long-term revenue stream for any future government.For example, land values along the Elizabeth line in London rose hugely when it was being built.
Why was that not taxed? Likewise with HS2: land values rose near its proposed stations and are still rising near Euston in anticipation of completion.Tax that value at 2% annually and HS2 is paid for.Alan CrawChesterfield, Derbyshire Have an opinion on anything you’ve read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
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