Politics

‘Tax millionaires like me to fund social care reforms' says ex-City trader

Boris Johnson’s tax hikes have incited a furious backlash. Economist Gary Stevenson is among a group of millionaires calling for a wealth tax instead

Gary Stevenson made millions betting on the state of the economy as a City trader – now he’s among a small group of millionaires calling for a wealth tax to replace Boris Johnson’s controversial health and social care levy.

The prime minister announced a 1.25 percentage point national insurance rise on Tuesday to fund a new social care package and deal with the NHS backlog.

The move has incited fury from backbench MPs for breaking a 2019 Conservative manifesto promise as well as criticism over how the tax will hit lower earners harder.

Unlike income tax which sees the percentage of contributions rise as earnings grow, national insurance falls. The regressive tax sees workers earning up to £50,000 a year pay 12 per cent of their salary in national insurance contributions compared to two per cent for those earning above that amount.

Ordinary people need money in their pockets. And at the moment we’re taxing them, letting the money go to billionaireseconomist Gary Stevenson

Putting the burden on lower-income workers to cover the cost of the Covid-19 crisis means the economy will not recover from the pandemic, according to Stevenson, who said now is the time for a wealth tax to hit millionaires like him. That is why he has joined Millionaires for Humanity – an international campaign group calling for a wealth tax.

“What I firmly believe is if we don’t do something about wealth inequality we’re going to see continuing and accelerating collapses in our economy,” said Stevenson, an economist at Wealth Economics.

“We’re seeing it now with the decreased affordability of, most presciently right now, social care, but things like the NHS, like education, like housing for ordinary people.

“If you allow more people to own everything then the rest of us increasingly have nothing and you just see a complete economic collapse. That’s why we haven’t recovered from 2008. And if we don’t do something here, we won’t recover from Covid.”

Former Citibank trader Stevenson made his fortune during the 2008 economic crisis, gambling on the economic recovery.

Since then he studied economics at Oxford and now aims to use his platform to speak out about the wealth inequality baked into our financial systems.

Stevenson told The Big Issue the failure to bring in a wealth tax sees the burden shift so far towards those on lower incomes that it risks causing economic collapse. That’s why, as the prime minister was laying out his plan in parliament to raise taxes to fund social care, Stevenson was urging his followers to “fight this” on social media.

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His focus is fixed on millionaires like himself and on billionaires.

“We need to tax wealth as opposed to work. We can tax the super rich, not just ordinary people,” said Stevenson. “Ordinary people are the lifeblood of the economy. 

“Ordinary people need money in their pockets. And at the moment we’re taxing them, letting the money go to billionaires and all the billionaires are doing with that is driving up house prices.

“It’s a super, super slippery slope, where increasingly, we only tax ordinary workers, we don’t tax the rich at all. And then inequalities get worse and worse and worse. And that’s going to cause increases in all the things we’ve been seeing, which is unaffordable housing, low wages, stagnant economy, bad jobs. That’s what happens if you have very high inequality.”

Stevenson is not alone in warning of the perils of taxing ordinary workers. The Federation of Small Businesses said the move would “make it harder for small firms to provide opportunities and invest to improve productivity” leading to fewer jobs.

Nor is Stevenson alone in calling for a wealth tax. Greater Manchester Mayor Andy Burnham was among the most high profile, calling pensioners to pay a 10 per cent levy on their estates. Burnham argued the move would see older people paying up to £80,000, less than the government’s plans.

However, Stevenson is one of the few haves speaking up for a wealth tax to help the have-nots and boost the economic recovery.

That’s a situation that needs to change for the good of the economy and the Covid-19 recovery, he added.

“We’ve got a Chancellor who’s a billionaire, he doesn’t want tax on the billionaire and we’ve got newspapers owned by billionaires, they don’t want taxes on the billionaires,” said Stevenson.

“I’m richer than most but I’m not a billionaire. I’ve got enough money that I can afford to focus on making a voice. There’s other people out there who have that space, they should use it because the fact is most people are trying to put food on the table to try and pay the rent.”

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