The call, earlier this week, by the Liberal Democrats to tax the rich on incomes above £70,000 gives a curious perspective on who they think deserves to be called well-off and who just middle-class. For, while £70,000 is a very good salary, it hardly fits the image of the super-rich. Quite where it came from is a puzzle. For example, it certainly includes virtually all chief officers and many assistant and deputy directors of upper-tier councils, not to mention every single council chief executive in Britain. It also includes most secondary head teachers, many of whom are now touching £100,000 salaries, according to a survey last week, plus many deputy heads and, of course, GPs. While senior public sector salaries have increased, none of them are in the same ballpark as, say, the chief executive of Northern Rock, with his £760,000. The salary figure of £70,000 also includes successful electricians, plumbers and carpenters, even London taxi-drivers. Households with two earners on £35,000 each who would not regard themselves as rich, especially if they have families, would, technically, fall within the bracket. And there are others, particularly in London and the South East, who would aspire to such a salary, even if they are below it now. The fact that the Lib Dems also pledged to knock 4p off the basic rate of income tax and replace council tax with an LIT was, of course, subsumed into the headline ‘milk those on £70,000-plus' headlines. What the Lib Dems have done, though, is raise a subject that has become almost taboo, namely, whether the answer to public spending constraints is to raise income tax direct rather than find the cash through the Treasury equivalent of behind the sofa. There is certainly a suspicion among the public that a minority of very wealthy people are doing well in the global economy. Translating that into a policy that the electorate will accept is another challenge. Indeed, send out a questionnaire, as the Lib Dems did, and ask the public whether the rich pay enough tax, and the answer will surely be in the negative. The problem is that most regard the rich as other people, not themselves. Income tax is likely to continue to be taboo for a while yet. Michael Burton Editor, The MJ
