Greg Philo (for it is he, how could Adam Smith\’s old Glasgow University have come to this?) tells us that the solution to all of our woes is a simple 20% tax on the accumulated wealth of the top 10%.
A straight 20% haircut of all their property, pensions, equities and all the rest.
Forgive me if I forsee a few little problems here but let\’s just start with the biggie shall we? You know, this Keynesian stuff about aggregate demand and recessions?
So, we\’re going to institute a one off £800 billion tax.
Mhm, hhm. That\’s about 60% of GDP.
Are we really absolutely certain that we want a 60% of GDP fiscal contraction in the middle of a recession? Tax rises are, after all, just as fiscally contractionary as cuts in government spending. The fiscal effect, the effect on aggregate demand, would be akin to keeping tax rates at current levels and stopping all government spending upon everything.
We really want sociologists suggesting economic policy now do we?