Issue 01 — 21 September 2004

01 Inheriting trouble

According to the famous aphorism, there are only two things certain in life: death and taxes. However for more households today, the two have merged uncomfortably in the form of inheritance tax. Initially levied on the estates of the fabulously wealthy, today inheritance tax starts at £263,000, less than the average value of a three-bedroom semi detached in the South East. The issue has thus become a major topic again, following the release of the increasing number of postcodes in the inheritance tax band by the Conservatives and a report calling for more tax bands from the Institute of Public Policy Research.

Renewed opposition to the tax, or at least to the huge rise in people above the threshold, has been the predictable response of the right. Whereas support for the tax, or minimal reform of the existing regime is the favoured solution of the left. Both sides however have missed the crucial point that taxation should not be debated devoid of the expenditure it is meant to be financing. The right point to the fact that, inheritance tax is double taxation (i.e. it taxes income that has normally had income tax and national insurance deducted already), and secondly that it acts as a disincentive to save by penalising wealth generation. These arguments, though strong, could apply to most taxes such as excise duties, VAT or capital gains tax on shares, all of which tax people on income which presumably has been taxed already. As for abolishing taxes that destroy incentives to save, then a case for eliminating income tax on savings could be made on the same basis.

It is true however that the tax burden has now become onerous for the vast majority of people. The key point is that, taxation collected should be viewed as a means and not as an end in itself. Taking this approach should lead to a zero based approach to expenditure rather than the annual incremental inflationary model favoured by most western politicians. The largest area in the UK government expenditure is neither health nor education, but social security. Having millions of people on the state’s payroll is by any objective metric an indictment of the economic system. What is required is a more rigorous debate on how best to tackle the problem of welfare, a largely taboo subject in contemporary politics.

02 Hijab: French ban opponents should debate the fundamental point

Until recently, most people would expect to find the term ‘laicité’ on a menu at Starbucks. Yet the term has gained currency internationally due to the debate about whether the hijab, or headscarf, should be allowed or prohibited in French state schools. Following the passing of legislation earlier this year, the new law prohibiting the hijab came into force this September, coinciding with the beginning of the new school year. Though the legislation in theory covers all ‘conspicuous’ religious symbols including gigantic crosses and Jewish skullcaps, the principal targets are Muslim girls who wear the hijab. Many Muslims in France and elsewhere believe the legislation compromises their religious identity and contradicts the principle of equality before the law. They also predict that far from promoting integration the law will have the opposite effect, driving Muslim girls into private tuition or religious schools, which are beyond the ambit of the new law.

However the Muslim opposition have so far missed the real target in the debate. They have opposed the specific legislation without questioning the French political tradition and its secular philosophy. The term ‘laicité’ refers to a specific type of secularism, established in France after the revolution, which amongst other things was a revolt against the Catholic Church’s influence over the French state. In 1905, the Separation Law formalised a policy of removing religion from the classroom. Therefore to argue that the new ban somehow contradicts France’s secular principles is not accurate, as it arguably conforms to the principle of laicité. The real challenge for opponents of the hijab ban is to argue why secularism is an inappropriate political model in a world where religion is becoming increasingly important. The key point of debate is whether secularism is the only appropriate political model to govern societies where more than one religion exists. By concentrating on the ideological basis behind the legislation, rather than the law itself, they may have more of a chance of affecting the French public, who currently support the introduction of the new law.

03 Iraq Post-Handover: The quagmire deepens as reporting decreases

While George W. Bush still claims he was right to go to war, he has admitted that the US underestimated the scale of resistance they would face. Yet despite the ‘transfer’ of power to an Iraqi civilian body, something one commentator calls a transfer to a government and not to a state, the rate of casualties sustained by US forces continues to increase. July, the first month after the handover, was much bloodier than June, and August has been a bloodier month than July. According to military affairs website globalsecurity.org, August was the fourth worst month since the war ended, with 72 US soldiers dead and 1112 injured. In addition to the rise in casualties, respected thinktanks like the Royal Institute of International Affairs now believe that the most realistic scenario in Iraq is fragmentation with increasing Kurdish separatism, Shia assertiveness and Sunni resistance threatening a civil war. Yet despite the surge in casualties and bleak assessment of the political situation, media reporting since the June 28th handover has tailed off, mirroring the scant attention and coverage now paid to the situation in still-turbulent Afghanistan.

Even Donald Rumsfeld, the once-ubiquitous US defence secretary, has reduced his public profile. The man labelled the administration’s rock star, who used to give daily progress reports at the Pentagon during the first months of the war, has appeared only rarely at Pentagon briefings since May. According to analysts such as Ivo Daalder of the Brookings Institute, this reduction in profile is no coincidence. He believes that the Bush administration has formed a deliberate strategy of shifting the focus away from Iraq. Quoted in the LA Times in August, Daalder says ‘Look at the front page-Iraq is not there. I think this is a deliberate strategy by the Bush administration: This is what [the transfer of sovereignty] was all about.’ Bush officials deny this, citing the transfer of power as the reason for a lower profile by the administration, however they also told us that Iraq had WMD’s.

04 EU gaffes provide cheap headlines

Hot on the heels of the Olympics closing ceremony, British tabloid editors suffered paroxysms of rage at yet another sign of EU ‘tyranny’. The European Commission spokesman Reijo Kemppinnen provided post-Games headlines by stating that the EU had “swept the floor” in Athens with a combined total of 82 gold medals. While Europhiles might have treated such comments indulgently, the Euro-sceptic press was convinced that this was the latest evidence of “superstate” ambitions in Brussels. Romano Prodi, departing European Commission President, only compounded the insult in the eyes of The Sun in a press release that mentioned his hope that in 2008 he would see EU countries bearing “the flag of the European Union alongside their own national flag as a symbol of our unity.” This offered them the latest proof that he is: “a dangerous megalomaniac whose aim is a European superstate.”

While the right-wing press is always keen to seize on any sign of malign intent on the part of Brussels, opposition to the European agenda, and specifically the proposed new European constitution, comes from across the political spectrum. Many on the left consider that the constitution is a blueprint for a “businessman’s Europe”, which will whittle down protection for workers and slash funding for welfare benefits. This sits oddly with fears on the right that the EU threatens to hamper Britain’s labour markets with a mass of red tape and enhanced rights to strike for workers. Such opposition on both left and right across Europe means that the pro-constitution camp face an uphill task in the various referenda and parliamentary votes over the next year. This is the case even in countries such as Germany and France, which are portrayed in the British press as quintessentially pro-EU. More than anything else, the statements from the Commission indicate that functionaries there are yet to grasp the depth of resentment felt towards them.

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