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Diary of a (Maybe) Retired Pastor

Tag: economy

  • Ancient Economics For Modern Times

    mayberetiredpastor

    Ancient Economics For Modern Times

    6 This is what the Lord commands concerning the daughters of Zelophehad, “Let them marry whom they think best; only it must be into a clan of their father’s tribe that they are married, 7 so that no inheritance of the Israelites shall be transferred from one tribe to another; for all Israelites shall retain the inheritance of their ancestral tribes.

    Numbers 36:6, The Bible, Old Testament

    So, at last, we have a half-way sensible budget! Last week, the UK Chancellor delivered her first budget. Thankfully, the neo-liberal rhetoric of the general election was just that – rhetoric. What was actually served on budget day was a clear expression of traditional Labour values. Half-way sensible because General Election promises has meant the Chancellor resorting to raising employer national insurance contributions – a maybe dubious move. But, at least there was a return to common-sense economics – you get what you pay for! Someone has to pay in order to restore public services to good health and for investment in the economy. The new government has decided that it should be businesses.

    What the Chancellor’s first budget demonstrates is that the economy of a society is determined by the ethical framework that is applied. The social ethics of the Bible as expressed in the law of the Jubilee (1) are usually considered irrelevant and unworkable in a modern capitalist society but the underlying principles are, in fact, directly applicable. As encapsulated in the biblical quotation above the gift of the Promised Land is for the people of Israel – not just a ruling elite. It insists that every family possesses an inalienable right to their own parcel of land.

    What we see here is the delineation of society’s stakeholders as the people. The social ethics of the Bible lay down the principle that each and every stakeholder in society should have the same inalienable right to the economic resources necessary to support themselves and to flourish. In modern economies land is not the basic resource we use to measure and allocate economic resource that role is taken by money. Applying this fundamental biblical principle thus means that every individual should possess appropriate financial resources to support themselves and to build their lives. The idea of a universal basic income/universal basic wage sometimes discussed amongst economists is thus not so far-fetched if you are keen on seeing biblical principles applied in modern society. This is the idea that every adult receives out of general taxation, as a right, an income that would enable them to live at a minimum standard.

    Many Christians when first encountering this notion feel that this is something for nothing and a recipe for laziness. But this is exactly what it was in the Bible – inalienable land by right for nothing! But they still had to work their land wisely. In the same way, people receiving a universal basic income could choose to do nothing, but to prosper and be fruitful they have to work and use their basic income wisely. For the state, the advantages seem numerous: welfare support, welfare benefits, state pensions etc. all  become unnecessary. Administration of a universal benefit is simple and inexpensive (no need to means test or assess eligibility). Taxation becomes simple as all earned income  can be taxed directly at some appropriate level without the exemptions and allowances that bedevil most taxation systems and which create cliff-edges when benefits/exemptions are removed/reduced as earned income increases.  People would still be able to prosper and, for some, become rich, but inheritance tax (the year of the Jubilee) will ensure that excessive wealth accumulated by individuals is returned to the wider economy and thus to every stakeholder.

    The law of the Jubilee and its underlying ethical principles might have been originally decreed for an ancient agrarian society, but they can be applied directly to great benefit to modern society. For Christians this must surely be a good thing.

    1. The Most Hated Tax, Diary of a Maybe Retired Pastor, 25.10.2024

  • When Is A Tax-Cut Not A Tax-Cut

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    When Is A Tax-Cut Not A Tax-Cut?

    But speaking the truth in love, we must grow up in every way into him who is the head, into Christ …

    Ephesians 4:15

    When is a tax-cut not a tax-cut? When it’s a Tory one! We are in the throes of general election hype and spin. The Conservative Party has announced that if voted back into government the state pension will never be taxed even if it increases above the current tax-free threshold of around £12,500. They are presenting this as a tax-cut, which it isn’t because the state pension does not currently exceed the tax-free threshold and won’t for a good few years to come, so nobody’s actually paying any tax on their state pensions! Setting that aside, in itself it’s not a bad idea and certainly worth considering. I was pleasantly surprised at the amount  I received in state pension (currently around £800 a month) but it wouldn’t be easy to survive on it if it were all the income you had as a pensioner. So, to have the assurance that it will never be taxed would reassure those who do rely wholly or mostly on it.  But it isn’t a tax-cut.

    Which brings me to Rachel Reeves and Labour. On Sunday, she ruled out any increases in income tax or National Insurance if she were to be Chancellor in the next government. Instead, she reassures “us” (which “us” would that be I wonder?) that Labour is the natural party for business and will “grow the economy” in order to raise funds for the spending plans of a future Labour government. Nonetheless, she concedes that she would have “difficult decisions” to make on spending! Meanwhile, Keir Starmer has pledged to hit the 18 week waiting time target for NHS consultations within five years of assuming power. So, I wonder how is Labour going to do that – closing all the prisons and releasing all prisoners into the community perhaps, maybe this is the “difficult” spending decision Rachel Reeves will make? It would certainly save a lot of money which could be diverted to the NHS!

    Our political culture is one in which the major protagonists refuse to be honest. We cannot have an honest debate on tax and spending, instead of setting out the alternatives and the costs and consequences of the various alternatives we are fed sound bites intended to lull or deceive into acceptance. Why can Rachel Reeves not say I have to raise £x billions to ensure that we can hit the 18 week NHS consultation targets which may mean raising taxes by  x%, but if the economy grows by a  certain amount it may be less? Why do the Tories have to dress-up a proposal worth considering as a “tax-cut” when it is nothing of the sort? The Bible teaches us to “speak the truth in love” but as a society we seem incapable of doing this. Unfortunately, this simply opens the doors to Satan, the father of lies as Jesus famously described him, with the terrible consequences that we see and hear about all too frequently.