We have to talk about rich people

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Credit: Entrepreneur.com

The Scottish Government is announcing a change to Air Passenger duty, which will become Air Departure Tax, and will be half of the current charge added to those who choose to fly’s ticket price.

The plan is to ultimately phase out the tax altogether, something the Scottish Government has been talking about for some time, but became a key point in the Scottish National Party’s manifesto in 2016.

It said: “Air Passenger Duty (APD) is one of the most expensive taxes of its kind in the world and hampers Scotland’s ability to secure new direct international routes and maintain existing ones.

“Indeed, the level of taxation on the tourism sector, taking account of both VAT and APD, is amongst the highest in the world. This relatively high burden of taxation restricts the potential of the sector to grow to attract many more visitors to Scotland.”

The plan is to abolish the tax completely by the end of this parliament, which will be in 2021.

In an interesting turn – although, unsurprising given the nature of the policy, but you still find it interesting when this happens – the Scottish Conservatives have said they support the plan and agree with the SNP.

That makes two policies just this month the SNP and Tories have agreed on: APD and the docking of puppies’ tails. Not sure if those are related in any way, but an interesting side note, nonetheless.

In a similarly unsurprising but rather inconvenient development – given their reliance on one another in parliament – the Scottish Greens have opposed the plan, saying it was “predominantly a tax giveaway for Scotland’s wealthiest households and corporations”.

Of course, those wealthier fliers who use planes more often for personal and commercial reasons will benefit more than the average Scot making their way to Corsica for a summer holiday once every few years.

However, the rhetoric that is becoming ever more present in Scottish (and, indeed, British) politics, is an attack on the wealthy individuals of our society, and – if not observed carefully – this can be extremely damaging.

According to Full Fact, the top 1% of earners contribute 27% of all income tax in the UK. Not only is income tax of interest, but the top 10% of earners contribute between 25-27% of all tax receipts.

That latter figure means the top 10% of households paid around £38,000 in taxes, whilst the bottom 10% of households paid £5000 in 2014/15.

Proportionally, one might argue, this does not say anything; the richer still have more left over than the poorer in society, and that is true. Even though both the top 10% and those on lower incomes contribute 33-35% of their incomes to the taxman, numerically it leaves the top 10% with more cash to spend.the-uk-as-a-100-taxpayers

However, the bottom 10% buck that similarity, sending 47% of their income to the taxman. That is across all taxes, say Full Fact, which includes tobacco duties – something those in lower pay brackets tend to spend more on.

Relieving tax pressures on those in the poorest households has progressed in the past decade, with the raising of the tax threshold for one. However, this can have contradictory effects.

An example used on the GOV.UK website has a woman on the minimum wage working 170 hours a month. This checks out at about 40 hours a week. If the minimum wage is £7.05 for 21-24 year olds, she earns over £14,000 a year – well above the current tax allowance threshold of £11,500 in 2017/18.

Of course, Jeba – the example woman – will keep more of her earnings before tax, but it is ironic those earning a minimum wage are still pushed into paying tax.

Meanwhile, as the threshold for paying tax rises, those at the top are being targeted by several left-of-centre parties looking to increase their contribution to the tax pot. If high earners already pay over a quarter into HMRC, is it right to increase the tax they pay?

In some ways, yes, they should. It is only natural that those who can should, and those who cannot should be given relief. At the end of the day, even the highest earners enjoy the personal tax allowance threshold rise.

However, this argument is not about numbers per se, it is about rhetoric. The rhetoric in public discourse today is of the evil wealthy 1% or 10%, or however large you want to make that category (Interesting side note, the average top 10% household would amass £110,000 in 2014/15 in income and benefits, which – in the grand scheme of things – is not a sickening amount of money).

When many of us consider the wealthy woman or man in 2017, we think of Branson, of Rupert Murdoch, of Piers Morgan, of Jeff Bezos, and other ‘fat cats’ and bankers.

Often we see these men (and, sadly, it is largely men) as stooges, crooks, swindlers and dealers. And, in some cases, you could be right, but there is a story in that; stories of success, innovation, technological advancement and investment.

Also, the jobs created for you and I, and an economy which actually moves forward. We may not agree with a lot of the practices of some of the wealthiest individuals in the world, but, in many cases, it isn’t their fault they ended up there.

Take Bill Gates, for instance. “Yes, but Bill Gates gives loads of money to charity, so hardly a fair example,” you say. You are correct, but Gates made his wealth through an idea; an idea which saw him make billions, and one which many of us have the liberty to enjoy today.

Or John Shepherd-Barron, a British inventor who attended Edinburgh University and recently died in Inverness, who invented the ATM – a machine we all use on a daily basis.

This hostile rhetoric to the wealthiest of society does harm to the good of that top 10%. There are many who abuse that position, but there is much we have to celebrate in their success.

So, take care when outwardly abusing people for having good ideas that people liked; or for having the intelligence to see the business plan you didn’t come up with; or the people who worked countless hours in the early days of their businesses eating out of tin cans with a determination neither you or I could muster.

Success should be celebrated, and we should tread lightly where our rhetoric leads us. In the end, they have the money to head elsewhere, and although we should not be held to ransom by the wealthy, every one of us is human, and nobody likes to be hated.

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