As ‘normal’ life is paused to bring the disease under control, pre-pandemic struggles for justice and cultural power are playing out in new formats. Daily disruptions, from fiery protests in the streets to corrosive virtual cruelties on unprincipled online platforms are the new norm. As the virus alters culture and media in real time, it makes visible tax injustice, pedagogies of oppression, and the scale of economic inequality. Socially transformative moments in human history are not unfamiliar. But, what is original about the anatomy of human destructiveness unfolding today is the range of budding variables at play, their litheness and their short half-lives.
Beneath the pandemic and the putrid odour of the decay accompanying the cortège is the Frankenstein of debt sustainability. It is a taint worse than the virus itself. The health of public debt during viral spread is under severe threat from corruption, cronyism, incompetence, corporate profiteering and political jockeying. It is a wave embalmed in tinctures of formaldehyde to abate a rancid smell and induce widespread amnesia during the daily briefings. With no fiscal responsibility the misguided have no axis and the maimed limp along in solemn procession.
State contracts worth over £1bn have been awarded with no competitive tender after suspending the standard rules in the UK. Benefiting from a taxpayer-funded pandemic goldmine, the new fast-track rules buoyed purveyors who benefited from the ‘extreme emergency’ guidelines to supply: COVID-19 test kits, food parcels, free school meals, laptops for schools, face shields, new mortuaries, housing for the homeless, drive-in test centres, contact-tracing apps, malaria and HIV drugs when it was theorized that they might be useful in the fight against the coronavirus, food-boxes for the vulnerable and personal protective equipment.
Procurement laws that ensure transparency and value for money and the rules that require state bodies to advertise all new contracts over a certain value and to use competitive bidding were superseded. Instead deals were signed without competing or advertising the requirement.
Extreme emergency was a fire blanket for the blank cheque method killing every control around transparency and accountability. The absence of competition set a dangerous precedent. With the start of the COVID-19 crisis there has been a spike in non-competed direct awards. As for the poor –they benefited from a chance to count not coin but all of their heavenly blessings. But benedictions don’t add up to a balance at the bank and can’t pay for a bread at the bakery. Eulogising this heart break, Elle King sings in ‘Baby Outlaw’ – I been runnin’ since the day I was born; I’m the definition of warn; Shed a tear for each soul set free; Call me a criminal, maybe; Baby, I’m an outlaw.’ Marshmello and Khalid in ‘Silence’ lengthen the lamentation singing: ‘I’ve been quiet for too long…My whole life, I’ve felt like a burden…So I’ll sit here in the silence; I’ve found peace in your violence.’
To fund a no-touch future under hasty construction and workout who pays for the pandemic, it is plain that from 2011 to 2018 in the UK, income has been taxed on average 29.4% while wealth – from rising house prices and the increased value of personal pensions – has been taxed at 3.4%. What this bares is that if we treat all sources of financial gain whether from income or from accruals in the value of assets as being equal, then we see that the underprivileged pay the highest tax rates, whilst those with the highest income pay at the lowest rates. Overall, the tax system in the UK remains largely regressive. Gains from swelling wealth tend to be concentrated among the opulent, while council tax, VAT, and duties on alcohol and tobacco wolfed a larger slice of the incomes of the poorest people. When income and wealth are combined, the effective tax rate for the richest 10% of the population was 18%, less than half of the 42% effective tax rate for the poorest 10%. If anything is clear is that the poor need a tax cut to survive beyond the pandemic.
Inequality is fuelled by dilapidated tax systems. Reform is necessary. The poor can’t even reach the low hanging fruit. They are now picking up what is on the floor. The Office for Budget Responsibility has pencilled in a budget deficit of £280bn in the 2020-21 fiscal year. If wealth is taxed at the same rate as income, the government can raise about £174bn/year to fund the COVID-19 recovery roadmap. The problems created by the pandemic can’t be solved by charity, no matter how generous. Jeff Bezos donated $100m during the crisis. That figure represents 0.1% of his estimated worth. Recently, a millionaires’ letter was organized by Resource Justice, Club of Rome, Tax Justice, Patriotic Millionaires, Human Act, Tax Justice UK, and Bridging Ventures. Eighty-three of the world’s richest people including Sir Stephen Tindall, Abigail Disney, John O’Farrell, Jerry Greenfield and Richard Curtis have called on governments to permanently increase taxes on them to fund the recovery from the crisis. COVID-19 helps us to discern that present tax rules distort behaviour or simply do not meet their policy intent.