Taxes or cuts?

So Stephan Hester is not to take his £1m share bonus and Mr Milliband claims it as a victory of sorts. He even goes further and says that Labour will put further pressure on RBS executives to rein in excessive bonuses. 

Labour described RBS employees as public sector workers and that the party would be taking a close look at the bonuses offered to the bank's senior staff.

Now this is all fine and dandy, and lets face it, plays well with most of the voters. God knows the Leader of the Opposition could do with getting a few things right with the electorate. 

Certainly on this issue he wrong footed Mr Cameron who was seen as slow to react to the anger felt by many at the obscene size of this and many an other bonus.

But by pinpointing on the bonus culture they’re missing the main point. Labour have for far too long been afraid to tackle the whole issue of taxation.

If the rich had to pay taxes on their income and wealth the bonus payments would not matter as much. But of course they don’t. 

It took an American Billionaire to point out the inequity of the system. Warren Buffett, a billionaire investor, famously complained that his secretary pays a higher rate of tax than he does.

Hence, Mr Obama in his state of the Union address last week making a renewed call for his Buffett Rule - a principle that millionaires should not pay a lower tax rate than typical workers.

Far from following a similar line Labour in their period of office went  in the  opposite direction. 


Their policy on taxes, helped the rich at the expense of the poor. Taxes on income were reduced and the emphasis was on indirect taxes such as VAT which bore heaviest on those least able to pay.

Both parties are still wedded to a deficit reduction programme that’s about cuts to the public services and public expenditure generally and not about the government increasing its income through the taxation system.

In re-election year President Obama has recognised the importance of fairness when he said last Tuesday, "We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by.

"Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

Surely a message that Labour ought to take on board. But disappointingly, Milliband has been very quiet on the issues. 

According to the test of public opinion by polling organisations voters would welcome a wealth tax on the rich, mansion taxes and what Europe are about to introduce, a tax on financial transactions. 

So a fair taxation system is what many in the country are crying out for. Why are Labour so reluctant to embrace redistribution of income and wealth. Are they finding it difficult to break the habit of of kowtowing to the rich. 

Perhaps, Mr Miliband ought to reflect on what his happening over the channel There the Socialist candidate for President, François Hollande is pushing ahead in the polls with a policy promise of taxing the rich and then putting  the money into public services. 

A lesson there, young Eddie, my lad.