The Conservative candidates in this leadership campaign have seemingly competed, not just on how hard their Brexit stance can be, but on how far they can go to give tax cuts to the rich. Except that, to them, the rich are merely middle class.
Various candidates have called for regressive tax cuts for this imagined middle class. Boris Johnson’s pledge to cut taxes for those earning over £60,000 by raising the 40 per cent tax rate threshold to £80,000 was pitched as a gift for the hard-working middle classes. The median wage in the UK is just £28,400.
Conservative politicians have been redefining class for the sake of higher earner tax cuts for years and across successive governments and budgets. George Osborne mastered the ability of painting his generous giveaways to the wealthy as for the aspirant “white van man.” Why do they get away with it, with seemingly so little damage?
There are two answers to this question: misperceptions of the median voter, and of social mobility.
Politicians can redefine the median earner to mean well over the average because perceptions in the wider population are skewed. Studies have shown workers consider ‘wealthy’ to be well above even the £60,000 earner that would benefit from the Boris tax cuts, and that ‘rich’ is often a distant concept.
A survey in 2017 by salary site Emolument, for instance, found that professional workers do not feel “wealthy” until they earn at least £370,000. Early career professionals wouldn’t feel “wealthy” until earning £93,000.
Why few people think they're average
Median voters’ preferences are often not predicated on a wider context of themselves as a median in an unjust system. Scholar Larry Bartels in a 2005 study on why people in the US supported Bush's 2003 tax cuts, despite 55 per cent of respondents agreeing that they benefited the rich, is a good example of this phenomenon.They did so, Bartel suggests, because the wider picture of inequality did not factor into their preferences: “Support for the Bush tax cuts was strongly shaped by people’s attitudes about their own tax burdens, but virtually unaffected by their attitudes about the tax burden of the rich.”
Perceptions of inequality itself, Bartel found, are determined by education. But they are also shaped by exposure. Political scientist Ian Shapiro has noted that voters are self-referential rather than comparative: “Workers do not compare themselves to their bosses…they do not compare themselves to the rich, but rather to workers like themselves.” Most are likely to be inward-looking, or downwards-looking—blaming themselves or their poorer neighbours for their shortfalls, rather than society.
We should take heed of Shapiro’s notes. People and places close to us matter more, so when we talk about tax, we should talk about local services and infrastructure, rather than creating conceptual stories so distant from everyday lives that we cannot grasp them.
The bootstrap burden
There is a second phenomenon to overcome: median voters not wanting to tax the rich—because they want to be, and believe they can be, one of them. Tory tax cut arguments have played on an assumption of existing social mobility and aspiration, and of a fantasy that this is solely achieved through merit and hard work so that incomes ought to be “rewarded” through tax cuts. Blaming yourself for not being wealthy, and wanting to be it, can deter ‘punishing’ the wealthy at the ballot box—because they are entitled to it due to their hard work.In reality, however, wealth is built with society's help. The roads, And that none of these things can be in place without tax. Wealth is owed to society that needs taxes to thrive. Anyone promoting cutting those taxes is, in effect, committing to a public spending commitment with bad implications.
In the case of Johnson, it was a vastly extreme version of this: to take from preparations for No Deal that may mean the life or death of communities (and the businesses that employ them) to give as gifts to those immune to Brexit’s consequences.
Labour needs to break out of the fear of a conversation on taxation and be honest about it: the public services that promote good living conditions and the basis of successful communities and businesses are reliant on tax.
Localise the story on tax; mainstream a conversation on average wages; and promote the often neglected connection between tax and the services essential to the prosperity of everyone, including those that hold social mobility close as a principle. With that, we could expose these tax cuts for the social scam that they are.
