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1 May, 2020 16:26

More government spending is needed in Britain & it should be paid for with a ‘War Tax’ on companies profiting from Covid-19

More government spending is needed in Britain & it should be paid for with a ‘War Tax’ on companies profiting from Covid-19

When it comes to the coronavirus pandemic, the UK government and right-wing press love a war analogy. So let’s fund the fight as we always have in times of conflict: through taxing excess profits.

Read most of the British press or listen to government spokespeople and you’d think Covid-19 was wearing knee-high leather boots and strutting around an office in Berlin (or perhaps Beijing), directing helmeted virus droplets on military offensives across the globe. Nazi Germ-any, if you will.

Commentators and cabinet ministers alike cannot resist a war analogy, speaking of fighting and defeating the virus. We’re encouraged to summon up “the Blitz Spirit” as if we can stoically support “our boys” (virologists?) in their fight against this evil invader. I, for one, cannot wait until the Allied vaccines land on the beaches of Normandy.

It’s all faintly ridiculous and embarrassing (and oh so typically British), but if this is how they want to play it, then let’s do it properly. Wars cost money and goodness knows this one is costing a fortune, so we should fund it how we’ve always funded wars: tax. Ok, it was that and invading other countries to rape them of natural and human resources, but the latter isn’t really the done thing these days.

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King after queen after emperor after pretender to the throne has raised money for their wars through taxation. If you were a minor baron or serf or farmer in the feudal system, you’d definitely be a pacifist, because conflict meant coughing up.

In later years, things got more sophisticated. In fact, when Britain found itself at war with Napoleon’s France in 1799, the then-Prime Minister William Pitt the Younger (so-called because he became PM at 24 and his dad, William Pitt the Elder, had also led the country - kind of the Dubya of 18th-century politics) needed to get his hands on a lot of cash. One measure he took was to invent something called income tax. You might have heard of it.

But it’s the 20th century’s two World Wars, the ones whose ghosts are being summoned by our Spiritualist leaders, that offer the best blueprint for how we should fund our current battles.

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During war or, in the current case, a pandemic, many businesses suffer. However, others thrive, not in spite of the war, but because of it. Sometimes this is through blatant profiteering but sometimes it’s just sheer fortune. Hello Amazon, Deliveroo and manufacturers of toilet rolls.

In World War I, the British government introduced a tax on “excess profits”.  It charged 50 percent on any profits above a company’s pre-war level. This went up to 80 percent in 1917 because the country had spent an absolute fortune on the pointless slaughter of young men. Income tax was also raised along with excise on luxury items, by the way, but there was no sales tax, so poorer people were not disproportionately shafted.

This tax on excess profits was also used by the USA, although they only entered the war in 1917, the glory-hunters. But both countries repeated the trick in World War II. The levels gradually increased as costs soared, with the UK at one point reaching 100 percent and the USA eventually hitting a flat 90 percent in 1942, although US companies received a 10 percent rebate once the war had ended. So that’s something.

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Why not do this to fund our ‘war’ on Covid-19? Why not help those in trouble, those struggling for income through no fault of their own, not to mention paying for our ‘army’ of healthcare workers on the frontline, through a War Tax on excess profits? 

It’s not as if, say, Amazon has been paying a proper amount of tax in ‘peacetime,’ so making them contribute more to the cause when most of the country is getting everything delivered to their door is hardly asking too much. After all, the firm’s earnings for the first quarter of this year were $75.5 billion, up 26 percent on 2019, almost certainly thanks to the virus – and that’s before many countries’ ‘lockdowns’ had really kicked in.

A War Tax is fair and sensible, but if that isn't enough to persuade politicians and journalists, perhaps this is: they get to say ‘war’ even more.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.