Riots on the streets

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According to the London Evening Standard (as reported in the Guardian):

65 people who filed a tax return in 2004-5 declared a taxable income of £10m. But, according to the Sunday Times Rich List there are more than 350 people in Britain with fortunes big enough to generate incomes of £10m a year through investments. Added to this, at least 60 City traders and company directors are thought to earn £10m a year.

As Sir Ronald Cohen, a private equity buccaneer saaid in response:

If people are "left behind" in the race to accumulate riches, riots like those that hit Paris in 2005 could be seen on the streets of Britain. When economic situations get bad, it takes a spark to ignite a violent reaction.

He's right. Extreme wealth ais bad for a country. And as the FT reports today:

The ranks of London's highest earners have swelled by nearly 60 per cent in just four years and their buying power compared with the average citizen is now greater than at any time since the 1930s

They add:

Individuals with incomes in the top 1 per cent of the UK's taxpayers pulling away even from the merely well paid in the final years of Tony Blair's premiership. But it is the incomes of the top 0.1 per cent that have grown most strikingly.

Consider this:

The income required to enter the top 1 per cent has risen almost twice as fast as incomes in the middle of the pay scale since 1990-91. 16 years ago an income of £57,000 ranked an earner among the top 1 per cent. By 2004-5 the admission price to the inner circle had more than doubled to £117,000.

In contrast, the median income rose from £10,600 to £16,400 over the same period, a rise of only 54 per cent.

Societies cannot survive this degree of inequality. The case for seriously progressive taxation is now so compelling that action has to be taken.