In public, the City paints a terrifying picture of foreign bankers fleeing Britain if the government requires them to pay the same tax rates as everyone else, but in private, no financier I know believes it. The odd Russian gangster will leave, they say, but London is too important a financial centre for global players to abandon.Many of the millionaires donating/lending to the Labour Party pay very little tax.
Because Brown lacks the moral and political confidence to call the City's bluff, his debauched tax system is debauching British society. Tax-free money is making housing in the south east and beyond too expensive for the middle class, let alone the working class that Labour once represented. The legacy of a decade of Labour rule is that the modest hope of a house in which they can have children is beyond hundreds of thousands of couples.
And as it debauches the economy, it also debauches politics.
In the financial year 2004/5 the top 20% of households, "ranked by equivalised disposable income" paid 35.6% of their gross income in taxes, while the bottom 20% paid 36.4%. That's according to Stephen Penneck, on behalf of the National Statistician, in a Paliamentary letter dated 25th July 2006 based on a report "The effects of taxes and benefits on household income, 2004/05" by Francis Jones by the National Statistics Office.
Is it fair that people who have a low income pay a greater percentage of their income in tax than those who have a higher income? No. It's quite simple. It's wrong. Let's take more and more low paid people out of paying tax altogether. Raise the threshold at which people pay tax and also raise tax rates. And simplify the tax system - you earn it you pay tax on it. Simple.
If you want to see some arguments that the current system is perfectly fair read the comments to Nick Cohen's piece and weep. The spirit of Ebenezer Scrooge is alive and well.
[Note to self: the title of this piece is a pun on Thurn und Taxis Pynchon's Crying of Lot 49]