Why we shouldn’t demonise the wealthy
May 29, 2014
Every year around this time a well-known broadsheet newspaper publishes its annual rich list profiling the wealthiest people in Britain.
Its publication makes headlines around the world and, understandably, leads some people to question the morality of people having more money than they could spend in several lifetimes.
Since the recession of 2008, public feeling towards the super wealthy has notably shifted, particularly in light of scandals relating to bankers’ bonuses and celebrities avoiding tax.
While the argument against such riches has validity, we should not underestimate the important role the wealthy play in our society.
At the most basic level, the super wealthy have the spending power to sustain jobs and the economy, not to mention what this spending contributes to the public purse in income tax and VAT receipts.
While some have inherited their wealth, many of those on the list are entrepreneurs who’ve made their fortune selling a business they built from scratch. They’ve used this liquidity to become serial entrepreneurs, starting new businesses and creating further jobs.
They often invest in commercial property which helps to provide better facilities for other businesses, regenerate communities and encourage inward investment.
They will also look to invest in other people’s businesses, with many putting money into ‘seed investment schemes’ that provide financial backing for start-ups, helping to give other budding entrepreneurs a chance to succeed.
Then there’s the philanthropy argument. Many wealthy people are incredibly philanthropic, either having their own charitable foundations or giving generously to other causes.
This is not to mention the inspiration our entrepreneurs provide for young people. If Lord Sugar, Michelle Mone and Sir Richard Branson, can start with nothing and become some of the best-known entrepreneurs in the country, why can’t they?
Of course, we don’t want a society where the rich are given preferential treatment, but we also don’t want a society that penalises the rich.
You only need to look at the French government’s recent decision to introduce a 75 per cent tax rate for the super wealthy. Many decided to move to countries like Belgium and are now investing their money away from France.
We must be careful as a society not to make scapegoats of those who create wealth and jobs. Otherwise we risk becoming an anti-business, anti-prosperity society.
Graham Gordon is managing partner at Chiks and head of the firm’s financial planning and wealth management division.