The fifth Democracy Cafe was held in the Hawkings Bar at Salisbury Playhouse and featured discussion of two topics: recycling and whether taxes should be raised to better fund public services.
The proposer of this topic wanted to discuss both recycling and Donald Trump. There was some discussion about putting the two topics together but although “Recycling Donald Trump” may have generated an interesting discussion it was felt to be more appropriate to separate the two out. Some of the main issues discussed were:
• The use of plastics for food packaging and the difficulties of recycling such material. Dickie provided an example with his plastic bottle of water set on the table in front of him which prompted discussion about the over consumption that is promoted by the food industry in order to generate profits, even from such basic products as water
• Reference was made to many examples both in the UK, such as re-using milk bottles, and abroad, buying fruit and vegetables in paper bags, which avoided the use of plastics
• Not all plastics are bad, some plastics are recyclable, plastics are being developed as a replacement for the use of sand in the building trade and biodegradable forms of plastic are being worked on
• A combination of taxation of non- recyclable plastics and “nudges” to encourage consumers to choose recyclable packaging rather than non-recyclable may be effective in changing consumer behaviour. The UK Government is considering a tax on plastics. Taxes would however lead to higher prices which may impact low income families, therefore there need to be lower cost alternatives for consumers to switch to
• Recycling in other countries was mentioned. In Switzerland there is a great deal of emphasis on recycling with the expectation that citizens sort their rubbish into recyclables and non recyclables and there is plentiful provision of recycling bins. On the other hand, in Hong Kong all rubbish is thrown out together and goes to landfill, so recycling there is minimal
• What is our view of the future? Do we take a pessimistic view where we see an economy which is run on behalf of the big corporations who exert undue influence on decision making processes and in which profit is paramount leading to an unsustainable future, or is there some hope in the ideas of Schumpeter and his notion of creative destruction which would suggest that new more sustainable businesses will develop because they will be more profitable and destroy the outdated unsustainable industries? Doughnut economics with its emphasis on recycling and re-using resources provides an alternative approach to economic development. The increased emphasis on the importance of recycling in schools and the recognition by young people of the need for sustainable solutions is cause for optimism.
• One view was that nothing would change unless the public were better educated. We need to realise that the convenience offered by plastic has a price unless it is disposed of properly and with regard to its effects on the environment.
2. Should taxes be raised to better fund public services?
The discussion started with a vote and the idea of raising taxes to provide more funding for public services was overwhelmingly supported. We then got into discussing the issues around the proposal.
• Hypothecation of taxes may help people to understand what their taxes are paying for, and there have been aspects of hypothecation in the UK tax system in the past, road tax and national insurance, but these were largely abandoned in the 1960s when the costs of the services provided outweighed the revenues raised
• Private provision of health care was regarded as being inadequate. Examples were given of the inequitable and exploitative nature of the US system. Public sector provision was seen as preferable
• Perceptions of tax are mostly negative and it is very difficult to win votes by saying that you are going to put up taxes. More needs to be done to promote the benefits of tax and what it pays for. There is a perception that taxpayers money is spent wastefully. This is partly due to the amount of transparency in the public sector and the work of organisations, such as the National Audit Office. Such transparency does not exist in the private sector and the considerable amount of waste there goes largely unreported. But, there is an issue of trust in politicians to spend taxpayers’ money wisely
• Privatisation of public services would reduce the need for tax revenues to fund services such as health and education. It was pointed out that most things that could benefit from privatisation have already been privatised and that privatisation of health and education is eroding the universal nature of the services provided
• National tax systems are being abused by big corporations, such as Amazon. A global approach to tax avoidance by corporations is needed to ensure they pay a fair rate of tax. The self assessment income tax system is also open to abuse and needs reform. What is taxed was also discussed in the light of Thomas Picketty’s book Capital in the twenty First Century
• The power wielded by the banks through their ability to create money and in turn inflation undermines the tax system, as does the independent City of London. This is the financial centre and the richest square mile in the UK, which Richard Shaxson and others from the Tax Justice Network suggest acts as at tax haven in its own right by providing advice to rich clients on how to make offshore tax arrangements
• Given the majority view that taxes ought to be raised to pay for improved public services we ought to consider which taxes to raise. It was suggested that corporation tax should be raised to recoup some of the £5bn per year lost to the Treasury since it has been reduced. The top rate of income tax should be raised given that it has fallen from 95% in the 1960s to 45% in 2018 and that more should be done to tackle tax avoidance and evasion.
The next Democracy Cafe will be held in the Hawking’s Bar at Salisbury Playhouse at 10am on Saturday 10th February.