Labour’s Wealth Tax lacks ‘Common Sense’
During his life, Thomas Paine’s influence was felt on both sides of the Atlantic. He tackled philosophy, politics, and rights in a reasoned, accessible manner. Widely considered his magnum opus, Common Sense (1776) was pivotal in mobilising American colonists against the British Empire. Selling 500,000 copies in its first year alone, the proliferation of his work enabled all strata of society in the thirteen colonies to understand the theoretical foundations of the American Revolution.
By drawing on the past, Paine learned from great liberal thinkers such as Samuel von Pufendorf and John Locke. In doing so, he synthesised coherent arguments that clarified the independence movement’s intentions. Though it seems obvious to learn from past mistakes, it clearly isn’t. Politicians repeatedly recycle old ideas that should have been consigned to the dustbin of history. Consider today’s discussions about a potential British wealth tax. Looking across the Channel, we can quickly see that Spain’s Solidarity Tax did anything but produce solidarity. In fact, the French wealth tax sent billionaires over here in the first place.
Those on the left argue that those with the broadest shoulders should carry the largest burden. But, the truth is, they already do. With the top 1 per cent accounting for a third of national tax revenue, would they really be prepared to pay more when other countries offer much more attractive offerings? I would guess not. Let’s not forget that the Americans fought for eight years when the British imposed taxes on them.
Paine’s arguments clearly remain relevant today, especially when it comes to the optimal size and role of the state. But we can also learn from Paine’s political outreach. Excluding the loyalists who fled to the Canadian provinces, the American people united around the arguments in Common Sense. This was not because everyone understood social contract theory or the right to revolt. It was because the arguments were constructed logically and simply. Like the colonists, today’s populist parties have become adept at rallying support around their ideas - a lesson mainstream parties would do well to learn.
Instead of relying on slogans and fallacies (which lead to policies like Labour’s wealth tax and leave them nine points behind Reform in the polls), parties should try the seemingly radical idea of offering rational and effective political and economic policies. This is, after all, the driving force behind much populist success. Not only would this help them win votes. It would also maintain positive approval ratings for more than a few days after an election (something this government has failed to do).
Of course, not everyone needs to understand econometrics. But if we expect parties to explain the ‘hows’ and ‘whys’ of their proposals in their manifestos, perhaps they would also consider the real-world impacts of their policies. If politicians cannot interrogate their own understanding of how political, social, and economic systems work, how can we ever expect them to implement policy effectively?
Anna Casey