What is tax justice?
The world is increasingly facing environmental and economic challenges. The wealth gap is widening globally, and the 2020 coronavirus pandemic proves that the current economic system cannot effectively deal with a large-scale crisis. The gap between rich and poor is becoming larger and larger.
One way that we can deal with many of the problems – economic and otherwise – facing the world today is by seeking tax justice.
Tax can play an important role in building more just and sustainable societies. According to Church Action for Tax Justice (CATJ), healthy tax systems can enable societies to:
- allocate resources towards ensuring quality public services and infrastructure for all;
- redistribute income and wealth, providing the basis for an effective social safety net, and is therefore key to tackling poverty and inequality;
- support a just and orderly transition to a low-carbon, sustainable economy and thereby combat the climate crisis;
- ensure everyone pays their fair share, so we all have a stake in society.
But today, the tax system doesn’t work for everyone – both in the UK and elsewhere. CATJ state that the gap between what the UK government is owed and what it receives annually ranges between estimates of £34bn and £120bn.
Current legislation in the UK and overseas means it’s too easy for corporations and wealthy individuals to avoid paying their fair share, which means the rest of society loses out.
Why is tax justice important?
Under the current system, many people in society are being left behind. Developing countries lose up to $400bn every year in tax, which could be spent on crucial services such as healthcare.
Tax can help to create a fairer society, but at the moment, the richest 1% own half of the world’s wealth, but the wealthiest 10% of the UK’s population pay less tax as a proportion as income than the poorest 10%.
If our tax system was set up more robustly and fairly, and everyone paid their fair share, our economy would be better placed to take hits like the pandemic, and society would become more equitable and fair.
Why should Christians support tax justice?
Paying just tax is a way of showing love for our neighbour: by paying tax, we are able to maintain the systems and welfare support which keep many people in our communities afloat.
The current situation allows an unjust economic situation to flourish. But tax justice would allow everyone to have ‘a stake in a generous society which cares for all’ – as Michaela Youngson, President of the Methodist Church 2018-19, says.