The general view on the left is that the state should spend more to improve people’s lives by investing in healthcare, social care, welfare, and libraries. This redistributionist view is based on the idea that our current capitalist economy isn’t perfect, and a strong public sector and welfare safety net are essential.
In this context, the question is, where should the money to fund this come from? And how should we deal with the fact some taxation is progressive, aimed more at the wealthy and property owners, while other forms are regressive, such as indirect taxes on basic goods?
The right generally wants to lower taxes because they believe that a healthy, booming capitalist economy is the best way to improve the lives of most people and that capitalists have a right to get rich for their crucial role in setting up and running businesses. They see taxes as hampering economic growth and oppose forms of redistribution because they see it as robbing the productive and economically active to pay for lazy people on benefits who don’t pull their weight.
Mixed in with these debates are related issues, such as inheritance tax and whether people should be able to pass along intergenerational wealth.
These are key battle lines in modern politics.
During the post-war boom of 1947-1973, taxes were generally much higher for businesses and the richest. The Reagan and Thatcher (counter) revolutions changed this attitude, with the idea of letting capitalism run free as an unfettered, unregulated system to benefit what they called the wealth creators – the capitalists.
This package of fiscal reform towards a low corporation tax, get-rich-economy was combined with the sale of national assets and mass privatisations of industries to create more avenues for capital to make money. It also involved crushing militant trade unionism and fostering a more moderate, passive trade union culture, more pliable to the bosses’ needs. The neoliberal world was born,
Since the rise of neoliberalism and austerity, the debate over taxation has become even more intense for the working class. But the discussion on increases in different fiscal categories is dwarfed by the reality of the astronomical wealth gap between the richest and the rest of us.
Neoliberalism (and its economic sister, austerity) has created a society of grotesque wealth for some people, whilst millions languish using food banks or relying on working family tax credits. In-work poverty has mushroomed to levels not seen since the Victorian era. Child poverty remains stubbornly high.
Given this, it is no wonder that the wealthiest people are funding far-right movements and parties to distract attention away from the wealth of the few to make people direct their anger at refugees and/ or trans people. Many people share far-right talking points and claim to be brave anti-establishment and independent thinkers, but in reality, they share the myths and lies of mainstream newspapers of billionaire-backed propaganda channels like GB News.
Progressive tax policies
Ecosocialists back progressive tax policies that target the wealthiest and oppose flat or indirect taxes that mainly suck money out of working people. Wealth taxes, massive hikes in corporation tax, and increased Capital Gains tax (on the sale of stocks and shares) are the principal taxes to levy.
Indirect taxes like VAT should be abolished, and income tax should only be levied at those earning significant wages. If you wanted to be radical, you could propose the complete abolition of income tax while maintaining a 100% inheritance tax, so you cannot pass on wealth, which is one of the leading causes of massive wealth disparity today.
It is worth noting that Thatcher’s attempt to introduce the regressive flat-rate poll tax in the late 1980s sparked a massive backlash and a mass movement led by the left, which eventually played a major role in her downfall. The anti-poll tax movement in 1381 saw peasants rise, invade London, and publicly execute the chancellor of the exchequer.
(Sir William Waldegrave, who was a minister under Thatcher’s government, which introduced the Poll Tax, also had an ancestor, Sir Richard de Waldegrave, who had been involved in the repression of the anti-poll tax uprising in the 1380s!) So battles over taxes are not always inconsequential if people feel aggrieved enough.
This is also why the battle over a wealth tax is such an essential part of the current political landscape, not because a wealth tax will pay for everything under the sun (it won’t) or solve the problems of long term economic decline (it won’t do this either) but it establishes the political principle that the richest should pay more and that their wealth – which is created by the surplus value of workers – is something that should actually be used to benefit society more generally rather than just allow them to buy another super yacht or another mansion.
Property and power
But there is one thing the constant debate over taxes rarely addresses. Wealth redistribution is built into the management of capitalism, intended to benefit working people without overthrowing the entire economic system. More progressive tax-and-spend policies can be found in various countries, and several of them are associated with better welfare and healthcare systems.
But none of this really changes the reality of how to get a world which provides a good quality of life for all.
These taxes still exist in a bourgeois hegemony where some people own property and run corporations, and others work for a living (or try to), so the debate is limited to where to put the percentage sign on which group of people.
An ecosocialist system is radically different because, then and there, the wealth created by working people is not controlled by capitalists or shareholders but is redistributed across society under democratic control. Yes, you can implement a tax on the wealthiest, but a better model is to socialise profitable industries into public ownership so that all the profits are used to improve society.
This is what neoliberalism set out to destroy by making the idea of public ownership ‘old-fashioned’ or considered a hindrance to economic growth. Now industries are only nationalised in a crisis – when they are on the brink of collapse – or when state subsidies have become so huge that they might as well be nationalised anyway (trains).
What we need is a broad, radical conversation about economic ownership that challenges the view that only the private sector can run anything. We can start with the renationalisation of privatised companies like water, but we have to go further, why not the supermarkets, banks, mobile phone providers, broadband and all adult social care? Expanding social ownership, with a mix of workers’ control and wider democratic forums to decide on production and distribution, enables more rational decision-making.
It also answers the question of what would happen if the super-rich left Britain if the taxes were too high – easily, we would take over their industries and enterprises that made them rich in the first place. If they try to shut them down in advance, then they are taken over, run under democratic ownership and incorporated into a plan of production.
They can then undercut rivals because they will not be producing for the benefit of shareholders’ inflated stock options. It will also allow us to reduce excess production, which results from the anarchy of the marketplace and inefficiencies in the distribution of goods, thereby helping the planet.
Campaigns like We Own It already exist and are doing important work to shift the narrative on these points. The fight over property and the socialisation of the economy marks out a really ecosocialist programme from a wealth redistribution model that only regulates capitalism rather than overthrowing it.
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Despite the reference to the poll tax, this article does not consider at what level taxes should be levied – state wide, national/regional or local council levels?
Socialists in the 20th century have largely concerned themselves with state-wide schemes of taxation, and even in the 21st century much discourse assumes that tax policy is solely made at the state level. Yet the UK has a quasi-federal tax system and a history of significant local taxes and struggle around them.
There is significant “devolution” of UK taxes already – all three devolved legislatures have powers over various taxes, though these are very lop-sided and inconsistent: Scotland fully controls income tax bands and rates, but Cymru can only vary Income tax rates by minuscule levels, while the Northern Ireland Assembly does actually have the power to vary Corporation Tax rates (a move brought in by the Tories in the hope that the 6 county legislature within the UK state would be pressed into actually reducing tax rates because of the comparative low rate brought in by right wing neo-liberal governments in the 26 county state and the large flows of business and trade north and south of the border, as well as encouraging multinational capital looking to maximise profit and set up operations and HQs in both parts of the island).
Other taxes are also devolved, including the main property transaction tax levied on the purchase of land and buildings (called “Stamp Duty Land Tax” in England and the north of Ireland, where rates are determined at Westminster, Land & Buildings Transaction Tax in Scotland determined by the Holyrood parliament and Land Transaction Tax in Cymru determined by the Senedd). Local taxation that councils largely determine across Scotland, Cymru and England is still largely based on the Tories highly regressive “Council Tax” that replaced the even more regressive Poll Tax (“Community Charge”) back in 1991, though there have been minor modifications to it by the devolved legislatures (the north of Ireland still has the old “Domestic Rates” system that pre-dates the Poll Tax) . There are also varying system of commercial property taxes (often, inaccurately, called “Business Rates”). These sets of taxes are the main forms of property taxation across the UK state but vary significantly across the state.
Back before the first world war in 1914 the total income raised by local taxes (then universally called “Rates”) across the UK state (that included all of Ireland then) was actually significantly LARGER than that raised by the largest central government tax (Income Tax). This was both because most public services were based on property and were delivered locally by elected council “corporations” (electricity, gas, water & sewage, education including further education, health including hospitals, etc were all delivered by councils alone with little central government role). The need to raise central funds to mobilise and support the imperialist war meant that central taxes began to outstrip local ones and the century since has seen, initially, massive, centralisation of services and taxes (particularly by the Attlee government in 1945 with the NHS, CEGB, etc) followed by privatisation under the Tories from the 1980s onwards. There were constant struggles by left wing led councils to assert their rights to raise taxes – from Poplar Council in the 1920s to the battles by many councils in the 1980s, culminating in the struggle by the left wing Liverpool and Lambeth councils. Even despite the general post-1945 centralisation, in the 1970s and 1980s left wing led councils were able to use the revenues generated by a “2p rate levy” loophole for any purposes they envisaged, often using the funds to promote radical and participative initiatives that led to Tory charges of “Socialism On The Rates” and a centralised process called “rate capping” that has continued largely to this day.
So, for ecosocialists in the 21st century, an important question must be “At What Level?” should both services organised and taxes be levied? what should be the limits of central government control? and what are the democratic mechanisms of local control? raising issues about the use of systems of proportional representation to elect local councils and genuine participation in determination of local priorities (as developed and pioneered by Fourth International supporters two decades ago in the first Workers Party presidency in Brazil, and building on Trotsky’s 1938 demands for “Open the Books to workers’ representatives” in both private AND public sectors).
How should communities be able to use taxes to both raise revenue for public services AND protect local environments from exploitation from capitalist growth? What are the limits to this and the balance between local, regional, national, state and European wide taxation systems? Should ecosocialists support locally determined tourist levies, road pricing, pollution taxes, property taxes and what are the systems for democratic control to ensure revenues are spent sustainably eg through investment in local public transport such as municipal bus and rail services?
These are important debates. While principles might guide us, the challenges are complex and immediate (for example proposals for tourist taxes on hotel stays are already well advanced in many parts of the UK state and will be a key debate in the elections in May 2026).