The Trades Union Congress (TUC) is urging Prime Minister Gordon Brown to increase tax on the wealthy in order to pay for morale-boosting tax cuts for the low-paid, with the UK teetering on the brink of recession.
Brendan Barber, the general secretary of the TUC, the umbrella organisation for the UK's trades unions, told a news conference on the eve of the TUC conference, which starts on Monday, that the Labour government should demonstrate it is on the side of ordinary people by redistributing wealth from those who are in a better position to ride out the economic storm, to those at the bottom of the pay scale who are now starting to feel the pinch of rising prices and slowing wage growth.
Specifically, Barber wants the government to put in place anti-avoidance measures for those earning GBP100,000 per year (USD176,000) or more so that they are guaranteed to pay at least 32% of their income in tax. This, along with other measures to close tax loopholes for the wealthy could raise GBP5bn to provide income tax cuts for those at the other end of the wealth spectrum, he believes.
Barber also argued that the government could raise an additional GBP8bn per year in revenues by putting in place some form of windfall tax on the profits of energy companies.
With its popularity nosediving and the economic forecast getting gloomier by the week, Brown is coming under increasing pressure from the unions and from within his own party to consider more populist tax policies that would appeal to the party's core vote, especially with a general election looming ever larger on the horizon.
Brown and his Chancellor Alistair Darling have so far resisted this pressure, rejecting calls for windfall taxes on companies and an increase in the 40% top rate of tax, although the government is said to be keen on the idea of extracting more tax revenues from the energy sector through the auctioning off of emissions permits under the proposed EU emissions trading scheme.
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