[2023] C06 Tax raising measures and fair taxation

carried motion
Carried motion

Received from: ,

Motion 20, and 21 and amendments

Congress proclaims that working people are facing unprecedented pressure on their household incomes as wages continue to lag behind inflation.

This isn’t true for everyone though. CEO pay is up 23 per cent in the last year, bankers’ bonuses are at a record high since the financial crash and dividends are rising three times faster than wages.  Corporate profit margins are at their highest in 70 years, but the UK’s corporate taxes are below the OECD average rate.

In short – wealth is being rewarded, work is not.  What is worse, under our flawed system this expanding wealth is not being taxed fairly.  This must now be addressed.

Of course, a strong and growing economy is a prerequisite for funding decent public services and fairly rewarding our public service workers.  A fair tax system is critical to that too.

The provision of high-quality public services, including welfare support, relies on the fair taxation of people and companies. The UK is taking proportionately less tax than our neighbouring countries and our public services are falling behind as a result.

The latest figures show that the UK’s total tax-to-GDP (of 33%) is lower than the OECD average (34%), well below the EU14 average (39%) and significantly less than that in Scandinavia (41%).

Furthermore, whilst individuals’ taxes are comparable with the OECD average, they are lower than other Western European countries. The UK’s social insurance taxes are also below the OECD average.

Who pays tax, and how much they contribute, are political choices. They have direct impacts for our essential public services and our wider infrastructure. These choices impact directly on fairness and the cost-of-living of working people too.

The money you make from working hard shouldn’t be taxed at a higher rate than the money shareholders and property investors generate from their existing wealth.

Equalising capital gains tax and income tax would generate an extra £10bn into the Treasury, to fund public services and public sector pay.

There are other options to explore as well, including applying a wealth tax, ending inheritance tax loopholes that benefit the already wealthy and implementing a tax on share buybacks.

Congress notes that the Public Accounts Committee said in January 2023 that the UK is missing out on £42bn of unpaid tax because HMRC does not have enough resources including staff.   Whatever shape the tax system takes it can only be delivered through a properly resourced and funded HMRC.

Congress commends the STUC report “Options for increasing taxes in Scotland to fund investment in public services”. Congress calls upon the TUC to develop proposals by Congress 2024 to enable the General Council to lead a debate on reform of our tax system in the UK to deliver fairer outcomes for working people, public services and public sector pay. Congress also calls upon the TUC to lobby the Government and the Labour Party to introduce a fairer system of taxation.

The report should include, but not be limited to proposals for:
• how companies of all sizes could pay a larger and fairer share of taxation;
• how taxation (including social insurance) may be increased in a more progressive manner;
• how Scandinavian and other Western countries configure their taxation and social insurance systems, outlining the benefits to public investments arising from such higher rates of investment;
• an increase in staffing to crack down on tax evasion and close the tax gap;
• a fully resourced cadre of Civil Servants to effectively deliver taxation policy; and
• recommendations on closing tax loopholes at the UK level.

Mover: EIS
Seconder: Accord
Supporters: CWU, PCS, FDA