Taxation: Who Pays? Who Benefits?

New Series: Volume 3, Issue 3

7 June 2023

Editorial: Who Pays? Who Benefits?

Gurminder K Bhambra

Taxation – and the ways in which it is returned to citizens through welfare – is one of the main ways in which the ‘imagined community’ of the nation comes into being. That is, the relationship between taxes and welfare is part of the process of constructing the institutions that contribute to the idea of the nation. While taxation was initially seen to be a significant factor in a state’s ability to wage war, by the mid-twentieth century it became more extensively bound up with its implementation of domestic welfare measures. The relationship between taxation and welfare, then, is integral to the idea of who we are nationally.

It is also part of the configuration of global structures of contemporary inequality. If we were to recognise that the ‘imagined community’ was built not only through national taxes, but also colonial ones, how might that change our understanding of what it is to be British today? Few in Britain understand the extent to which national projects – from social welfare and health services to cultural institutions such as country houses, museums, and galleries – have been enabled through the taxes paid by former colonial subjects.

In this issue, the various contributors examine different aspects of the relationship between who pays and who benefits, addressing the longer colonial histories that have shaped national institutions and ideas of legitimate claims upon a supposed national patrimony.

Alex Cobham argues that this is not just a reckoning with the past, but also a rebuilding for the future. If the social contract in Britain currently appears broken – as 62 per cent of those questioned believe – perhaps that contract can be rebuilt around ideas of tax justice. Cobham suggests that it is only when a population believes that the money disbursed is its own that it is motivated to hold the government to account for how it is spent. The corrupting influences of historical colonial bounty and on-going practices of tax havenry have violated the generalised webs of reciprocity that legitimate the relationship between taxation and welfare. These can only be repaired, he argues, by starting with a full and frank conversation of where the money has come from and how we account for its legacies in the present.

In discussion of non-domiciled tax-payers, Mike Savage similarly suggests that what may seem like an arcane loophole – the non-dom clause – is nonetheless ‘deeply redolent of embedded cultures of class, race and imperial power’ in Britain today, highlighting a variety of dimensions of inequality. In discussing the history of the clause, Savage highlights Lloyd George’s statement in 1906 that ‘the citizen of the empire, who is not domiciled in this country’, was exempted from income tax on their overseas income. Interestingly, as I’ve argued elsewhere, this did not exempt colonial citizens domiciled elsewhere from having to pay income tax to the British government in Westminster!

The special treatment of elites has been clearly illustrated in the inheritance rules applying to the monarchy as Charles became king. Laura Clancy sets out the many ways – beyond simply not paying inheritance tax – that the monarchy evades such generalised obligations through claims of historical precedence. Accountability is central to the legitimacy implied in the question of this issue, ‘Who pays? Who benefits?’ Clancy suggests that who gets to decide what accountability is, is also a necessary question to answer in addressing the broader issue of how systems of global inequality are reproduced.

Karen Rowlingson focuses on how stereotypical ideas of who taxpayers are and who the recipients of welfare are skews the debate on the relationship between taxation and welfare, as is evident in characterising the former as ‘hard-working’ and the latter as ‘idle’. The two groups – taxpayers and recipients – tend to be presented as distinct and yet in reality almost everyone is a taxpayer and everyone has some benefit from public spending. The inequalities that actually structure the relationship are much less discussed – for example, that taxes on income from wealth are taxed at a far lower rate than taxes on work. Reform of the tax system by increasing taxes on wealth and restricting tax loopholes would provide more money for public services for us all.

If the relationship between taxation and public services – specifically the NHS – is only thought about within a national frame, as John Narayan sets out, it obscures the contributions that have been made, and continue to be made, by others beyond the UK. Building on research that demonstrates the centrality of empire to the establishment of the NHS, Narayan highlights ongoing extractive processes by the NHS. He focuses on its recruitment of nurses and other healthcare personnel from countries on the World Health Organization’s red list, that is, countries from the Global South that already have an insufficient availability of health workers. These poorer countries pay for the education and training of healthcare workers that are then recruited by the NHS for the benefit of the population here. The broader implication of Narayan’s argument is to upend the standard understanding of who pays and who benefits that has been a central part of populist politics over the past decades.

When John Hills drew attention to the redistributive effects of the welfare state three decades ago, he argued that this ‘cannot be judged just by looking at who benefits from it … One also has to look at who pays for it through the tax system and in other ways.’ As the articles in this issue show, we need to consider those ‘other ways’ in much broader terms than is usual to also include the contributions made to Britain by those from its formerly colonized territories.

Gurminder K Bhambra is Professor of Postcolonial and Decolonial Studies at the University of Sussex. She is author of Connected Sociologies and the award-winning Rethinking Modernity: Postcolonialism and the Sociological Imagination. She is also co-editor of Decolonising the University and co-author, with John Holmwood, of Colonialism and Modern Social Theory.

Header Image Credit: Pedro Ribeiro Simões


Bhambra, Gurminder K 2023. ‘Editorial: Who Pays? Who Benefits?’ Discover Society: New Series 3 (3):

Nasty, solitary and brutish: How the UK undermined its own social contract

Alex Cobham

A poll in May 2023 found that 62 per cent of those questioned agreed with the statement, ‘The social contract in Britain is broken’. Just eight per cent disagreed. The question posed in this issue: ‘Who pays, who benefits?’, is the key to understanding how the UK got here – and why, perhaps, tax justice points the way forward.

A new volume, Imperial Inequalities, edited by Gurminder K Bhambra and Julia McClure, connects directly to practical questions of tax justice today, as Quinn Slobodian highlights in the Preface. It is motivated by thinking through how a new fiscal sociology conceives of a ‘web of generalised reciprocity’ emerging in communities subject both to ‘relations of extraction’ (that is, taxation) and to relations of distribution (welfare). The question is this: how is that ‘web of generalised reciprocity’ affected, once we recognise that the populations subject to relations of extraction and distribution are very often not the same?

Colonial histories, as the many chapters show, are replete with such cases – from the British welfare state, built on extraction from colonial citizens largely denied its benefits, to the many and complex stratifications of colonial populations with differential tax and benefit treatments. The case of a single population subject to closely mapping relations of extraction and distribution would be the exception, far from the norm.

The emergence of a relatively ‘pure’ web of generalised reciprocity may then be equally atypical. That is: those who pay, and those who benefit, are rarely identical. For colonial populations, a common response is the rejection of taxation unaccompanied by either representation or meaningful distribution. The emphasis on taxation in post-independence state-building, and its frequent presentation as patriotic, reflects the resulting need to reclaim the legitimacy of taxation.

The problem is less immediately visible in the metropolis. It may be largely unknown and sometimes openly denied. But it has the potential to be equally damaging to the maintenance of an effective state, and perhaps also to the web of generalised reciprocity.

The corrupting power of imperial bounty

In the framework of the 4 Rs of tax, the main benefits of effective taxation are identified as revenue; redistribution; repricing (e.g. of tobacco consumption and carbon emissions); and the 4th R, often overlooked, representation (Cobham).

One of the only consistent associations to be found with improving political representation and reducing corruption, is that of the share of taxation in government spending (e.g. Prichard et al.). That is, when governments rely more on taxing [their own] citizens, they tend over time to be more responsive and accountable to that same population. When significant spending is based instead on for example natural resource wealth, or sustained high levels of foreign support, the longer-term effects on governance are pernicious.

A population that sees government spending as a bonus if it benefits them, and otherwise deems it irrelevant, has a quite different sense of (tax) citizenship than one that considers government to be spending their own money, and holds it accountable on that basis. Over time, unsurprisingly, it is the latter scenario that results in better and more inclusive governance.

In the context of these findings, we can speculate on the results when populations of (former) imperial powers and settler states benefit from relations of distribution that are built upon relations of extraction that encompassed many others. The cumulation of colonially extracted wealth underpinning the introduction of the welfare state in the UK, effectively implies a share of taxation in government spending that is lower than the apparent figure. That in turn would imply that the UK – for example – is on a weaker governance trajectory than might have been understood from the long-term association noted above.

In other words: the ‘bounty’ of empire may be a corrupting influence on the UK.

The corrupting power of tax havenry

My chapter in Imperial Inequalities, ‘Imperial extraction and “tax havens”’, explores the UK’s global dominance, across three imperial ages of illicit financial flows. In the first of these, the age of formal empire, we see illicit extraction by violence. That extraction very often takes the form of taxation – including by colonial administrations and by imperial charter companies, in each case operating with the force of arms, as well as via local figureheads.

The second age of illicit flows occurs in the first half or so of the 20th century. Growing and increasingly successful calls for independence gave rise to fears that those who had expropriated wealth under empire, may find it re-expropriated by newly independent states. At the same time, the rise of direct taxation (and war) in the metropolis created a liability if wealth were to be fully repatriated.

The twin fear of expropriation and taxation results in what Vanessa Ogle has aptly labelled ‘funk money’, and provides the driver for the first real tax havens to emerge: jurisdictions within empire, and ultimately backed by the same military power and legal institutions, but that are able to engineer forms of ownership for these illicit flows, that are defended from the twin threats of expropriation and taxation.

British institutions including the Treasury and Bank of England reacted to and sometimes encouraged further developments in 1950s and 1960s, in part motivated by a desire to reduce aid to dependent territories and to bolster the City of London’s position; while at the same time concerned over tax abuse if it would affect the UK (Shaxson). Sævold’s detailed exploration shows the haphazard nature of policymaking in this regard, and the absence of a deliberate, overall strategy.

This set the basis for the third age of illicit flows – in which we are all living today – that we might label ‘tax haven empire’. The provision of financial secrecy and low- or zero-tax regimes became increasingly widespread, as a growing number of dependent territories, US states, and countries including the Netherlands, Luxembourg and Ireland, competed to commercialise their sovereignty (in Ronen Palan’s resonant term). By offering their legislation for hire, these jurisdictions allowed international law firms, banks and accounting firms to design and put in place the ideal conditions for illicit flows including corporate profit shifting.

The UK and its network of dependent territories (the UK ‘spider’s web’) emerges consistently as the most damaging single actor worldwide – whether by measures assessing the risk of illicit financial flows broadly or of corporate profit shifting in particular, or through direct estimates of the tax losses imposed on others (some $189 billion, or 39% of the global total).

The UK also suffers, of course, and not only through its own exposure to tax losses. The ‘finance curse’ (Christensen, Shaxson & Wigan) posits the existence of mechanisms similar to the natural resource curse, for economies that become highly dependent on financial services. These can include exchange rate appreciations that make other sectors internationally uncompetitive; property price and other inflation that makes the cost of living oppressive for those outside of the leading sector; and a reliance on revenues from that sector. Over time, this weakens the role of other taxation and can, again, weaken the state-citizen relationship.

A key channel beyond those of the natural resource curse is that maintaining a bloated financial services sector increasingly requires legislation and regulation to be put at the sector’s disposal – which gradually disenfranchises citizens, as the political space for progressive changes is restricted by policymakers. In addition, the reliance on financial secrecy to facilitate tax abuse and other corruption elsewhere, makes it increasingly difficult to maintain basic transparency and institutional accountability at home. The corrupting nature of tax havenry may be more immediately evident in smaller jurisdictions like the British Virgin Islands or Jersey, but a larger economy like the UK is not exempt.


If the existence of a web of generalised reciprocity linking those who pay and who benefit is the basis for a functioning social contract, what can we expect from a state based on explicit violations of that reciprocity?

One answer might be a commitment to exclude. Recognising the range of peoples who have paid, and how often this can be characterised as illicit or violent extraction, a state might take an increasingly aggressive stance to limit those who it allows to benefit. This exclusion might influence not only policies around migration (physical access), but also those on institutional access (who is uncounted?) and stigmatisation (social access).

On the latter point, many high-income countries are characterised by narratives that stigmatise poverty and the access to benefits of lower-income households – while at the same time often failing to pursue abuses at the other end of the distribution. The UK has reached an extreme point in its divergent treatment of tax fraud and benefits fraud. On the government’s own conservative estimate, tax fraud costs the UK nine times as much – but the government dedicates three and half times as many staff to benefit fraud, delivering 23 times as many criminal prosecutions and more than eight times as many custodial sentences (TaxWatch UK). It is estimated that benefits due to households but unclaimed in the UK now stand at £19 billion per year (Clegg et al.).

Successive cuts have weakened the capacity of the tax authority, despite consistent evidence that each £1 spent here brings in multiples more in additional revenue (Advani et al.) – because the returns are so high to audits of major companies and high-income households, who can otherwise act with impunity. Estimates of the resulting tax losses range widely, but are in the many billions of pounds.

The weakness of progressive taxation in law, and the additional failure to ensure compliance at the top end, is also at the root of the way that tax systems, including in the largest economies like the UK and US, tend to exacerbate rather than ameliorate the existing inequalities that affect women and racialised groups (Brown; Decolonising Economics; Elzayn et al.) – including, disproportionately, people whose family origins trace back to (former) colonies and enslaved populations.

A path back to the social contract?

The UK’s role at the heart of three ages of illicit financial flows has created an unrepayable debt. But even for those theoretically on the over-receiving side of the unbalanced web of reciprocity that has been build on the proceeds, many are in practice excluded and there is a powerful sense that the social contract is failing. 

The UK’s debt extends not only to people and countries who have faced its illicit extraction, but also to the jurisdictions within the spider’s web. The case for the UK to end its global role in tax abuse is clear. At the same time, however, it must take responsibility for the vulnerability of dependent territories whose people suffer a more intense dependency on an exploitative financial sector than even the UK itself. Support is needed – and owed – for those territories to develop and pursue alternative economic models, just as the UK itself must do. And while ending its role in tax abuse cannot repay the UK’s debts, it can at least stop the clock on the debt’s continuing growth.

The same steps would create the possibility for the UK also to reset its own approach to tax and benefits. Winding down the reliance on finance, rejecting further proceeds of illicit extraction and committing to tangible reparative justice measures, would also create the opportunity to re-establish a more balanced form of the web of generalised reciprocity.

In doing so, the UK could start to reverse the exclusionary and ultimately self-corroding nature of its social contract.  As has been suggested to King Charles III, newly crowned head of state for the spider’s web, an insufficient but necessary first step would be the start of a full public discussion over the extent of the UK’s past and continuing role in imperial extraction and tax abuse – and the overlapping inequalities that persist as a result.

Alex Cobham is an economist and chief executive of the Tax Justice Network. He is also a founding member of the steering group of the Independent Commission for the Reform of International Corporate Taxation, and of the technical advisory group for the Fair Tax Mark. He has been a researcher at Oxford University, Christian Aid, Save the Children, and the Center for Global Development, and has consulted widely, including for the Economic Commission for Africa, UN ESCWA, UNCTAD, UNDP and the World Bank. He has published two books: The Uncounted (Polity Press), and Estimating Illicit Financial Flows: A Critical Guide to the Data, Methodologies, and Findings, with Petr Janský (Oxford University Press, open access). A new book is forthcoming in 2023 with Sage Publishing, titled ‘What do we know, and what should we do about tax justice?’

Header Image Credit: Word cloud of words selected to describe Britain (New Britain Project polling by More In Common, May 2023)


Cobham, Alex 2023. ‘Nasty, solitary and brutish: How the UK undermined its own social contract’ Discover Society: New Series 3 (3):

Why non-domiciled tax payers are a sociological – and political! – issue

Mike Savage

It is tempting to see the British ‘non-dom’ clause – a declaration for tax purposes that you intend to move back to where you are declared to be domiciled – as an odd quirk of the British tax regime. As such, it is no more than a loophole that is exploited by a few rich people to gain tax advantages, but not necessarily revealing of more structural features of British society. In fact, the non dom clause is deeply redolent of embedded cultures of class, race and imperial power that continue to operate in 21st century Britain – and are indeed resurgent.

I am old enough to remember the Conservative minister Norman Tebbit’s inflammatory call in 1990 for a ‘cricket test’ which asked: ‘When England play India, which team do Britons of Indian or Afro-Caribbean origin, who were born and grew up here, support or should support?’ His expectation that such immigrants should fully ally with the English cricket team was deeply contested at the time and was seen as a lodestone of the racist assumptions of the Conservative estsblishment.  

What Tebbit did not mention is that the British state actually institutionalises a form of the ‘cricket test’ in allowing UK residents to indicate on their tax returns that although they are living in Britain, they do not see the UK as their permanent home, with the implication that their prime loyalty is to another nation. It is strange that a supposedly autonomous nation state should allow such a clause, and even more strange that it gives advantages to those who tick this box. Yet in Britain, “non-dom” status is available to individuals who, although they may live for much or even all of the year in the UK (and hence are “resident” for tax purposes), also claim that their permanent home (“domicile”) is abroad. They are exempted from paying tax on any income earned from outside the UK (so long as it is not remitted to the UK), including not having to pay inheritance tax on overseas assets.

The origins lie in British imperial history. The role of domicile was introduced with the first levying of income tax in 1799 (introduced to fund the Napoleonic Wars). British residents were exempt from paying income tax on their foreign income unless it was remitted to Britain. When income tax was introduced on a major and permanent basis by Lloyd George in 1906, he explicitly brought out its imperial basis: ‘the citizen of the empire, who is not domiciled in this country’, was exempted from income tax on their overseas income. The scope of this generous provision was curtailed for most UK residents in a series of reforms during the twentieth century but never abolished.

In recent decades there has been growing public dispute about the fairness of the non-dom clause, with extensive criticism of high-profile figures – working in the heart of government and corporate affairs at the commanding heights of British power – whilst claiming for tax purposes that their ‘permanent home’ was somewhere else in the world. These include revelations that several sitting members of the House of Lords – such as the powerful Tory peer Lord Ashcroft – were claiming non-dom status, along with the former governor of the Bank of England, Mark Carney, and Zac Goldsmith, the Conservative candidate for Mayor of London. In April 2022 there was a major outcry when Akshata Murty, the wife of the then Chancellor Rishi Sunak, was exposed as a non-dom.

Together with Arun Advani, David Burgherr, and Andy Summers, we were the first to systematically research the scale and significance of the phenomenon. We took advantage of the fact that the HMRC, the UK tax authority, necessarily records who is claiming to be a ‘non-dom’ individual, and we can link this information to their reported income, their geographic location in the UK, their age and sex, and their nationality.

It turns out that non-doms are not some peripheral phenomenon but hugely matter for appreciating the full dimensions of inequality within the UK. Figure 1 shows that only 0.3% of those with income below £100,000 are non-doms, but this rises dramatically to about 40% of those with income above £5 million. A hugely disproportionate number of the highest paid thus take advantage of the non-dom clause. 

Figure 1: share of non doms (and anyone who ever claimed non-dom status between 2001-18) among top earners, 2018.

It is well known that in recent decades the top earners in the UK have pulled away from average – and even above average – earners, but now we have prima-facie grounds to think that this may be facilitated by the non-dom phenomenon.

There is also a very distinctive international geography at work. We are increasingly mindful of the significance of imperialism as a force shaping the modern world and this imprint is still very much with us. Figure 2 shows that still today, many non-doms claim links to former imperial nations. It shows that well over half of non-doms claim affiliation to the UK or a former imperial territory, and further analysis reveals the significance of Ireland, Canada and the USA; South Africa; India and Australia. We can also see a strong link to European nations, especially the original 6 nations of the European Union – France, Belgium, Luxemburg, Netherlands, Germany and Italy. By contrast, links to the former Soviet nations, or to the Middle East oil territories are much less significant than media stereotypes might imply.

Figure 2: breakdown of nationality of UK ‘ever non-doms’, grouping similar types of nations.

Returning to Tebbit’s cricket test, we can draw an important conclusion. Tebbit was bothered about the allegiances of immigrants from predominantly non-white nations. By contrast, the non-dom clause attracts migrants from nations with predominantly white populations, notably the ‘white settler’ dominions of Australia, Canada, Ireland, New Zealand, South Africa, as well as the USA. We can also see substantial numbers who have European ties.

Immigrants from nations with predominantly non-white populations are much less important, with the striking exception of India where the number of non-doms has expanded rapidly in the past twenty years. Perhaps Norman Tebbit would be reassured that the vast majority of immigrants to the UK are in fact committed to living here and do not claim on their tax return that their ‘permanent home’ is somewhere else. The exceptions, it appears, are predominantly white economic elites. This is surely a matter of political, as well as sociological, concern.

Mike Savage is Martin White Professor of Sociology at the London School of Economics and Convenor of the ‘Wealth, elites and tax justice’ research programme at the International Inequalities Institute, London School of Economics

Header Image Credit: Gwydion M. Williams


Savage, Mike 2023. ‘Why non-domiciled tax payers are a sociological – and political! – issue’ Discover Society: New Series 3 (3):

How can the British monarchy contribute to the ‘public good’ if it abuses the tax system?

Laura Clancy

Upon the death of Queen Elizabeth II in 2022, her son Charles became king and with it inherited everything belonging to the sovereign. Distinct from their wealth as private individuals, the sovereign’s wealth refers to anything that is owned by the sovereign ‘in right of the Crown’. This includes the lucrative property portfolio The Crown Estate, which owns swathes of property and land around the UK including the whole of London’s Regent Street, and is worth around £15.6 billion.

King Charles paid no inheritance tax on the ‘sovereign-to-sovereign’ bequests from his mother. This is because inheritance between monarchs is exempt from the 40% tax normally applied to assets valued at more than £325,000, a clause agreed by then Prime Minister John Major in 1993. The monarch is also not legally liable to pay income tax, capital gains tax or inheritance tax.

While Charles not paying inheritance tax has made news headlines around the world, the other ways that the monarchy evades taxation through historical precedence remain largely obscured. The wealth of the monarchy and its exemptions from various taxes raise important questions about accountability; particularly as the monarchy is a public institution. Indeed, the revenues from the Crown Estate are paid to HM Treasury, and then 25% of the profits are paid back out as the monarchy’s official funding – the Sovereign Grant – which amounted to £86.3 million in 2022-23. This means that the monarchy is taxpayer funded, even whilst exempt from paying many taxes itself.

Public discourses of ‘skivers versus strivers’ to position those out of work as ‘scrounging’ from the state do not seem to apply to elite institutions, despite them extracting much more money from the state than your average benefit claimant (and, indeed, despite them having many thousands of times more wealth themselves than your average benefit claimant).

This is not to say that the monarchy is entirely unaware of the optics of this, and there are points when there has been a gesture towards notions of accountability, even if these are hollow. In 1993, responding to public anger over the news that public funds would be used to restore Windsor Castle after a massive fire, the monarchy announced it would pay ‘voluntary’ income tax and capital gains tax on the Privy Purse (the Sovereign’s private income, mostly from another property portfolio, the Duchy of Lancaster) and private investments, but only ‘to the extent that the income is not used for official purposes’. However, they don’t reveal the amount of income that the tax is payable from, leaving us with little information on the percentage of tax they actually pay. This presents taxation as a kind of benevolent giving that we should be grateful to receive, rather than a civic responsibility.

In 2011, royal finances were restructured in the shape of the Sovereign Grant, explicitly with the stated aim of aiding accountability. The annual payment is calculated from a

percentage of the Crown Estate’s net income, and the National Audit Office and Public Accounts Committee undertake regular examinations. However, anti-monarchy campaigners Republic have shown that any concerns expressed in the course of these examinations are often dismissed by the government. Furthermore, the framing of the Sovereign Grant as coming from the Crown Estate’s income makes it appear as though it is, as the Financial Times put it, ‘performance-related pay’. But the payment does not reflect actual profits or losses or the Estate. A House of Commons research paper says this was just ‘a means of arriving at a figure’.

The arbitrariness of this calculation is reflected in the history of payments. In 2011, the Sovereign Grant was 15% of the Crown Estate’s net income surplus, but in 2017 the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse) agreed to 25%, with the addition of 10% annually to fund the 10-year project to renovate Buckingham Palace. A clause in the Sovereign Grant also says funding cannot decrease even if Crown Estate profits do, but it can increase when profits go up. This reflects a neoliberal culture which socialises losses and privatises profits, and is especially notable considering the austerity cuts to public institutions like the NHS. Given the profiles of the members of the Royal Trustees, who all have investments in maintaining systems of elite wealth, this also raises questions of the accountability of those ‘trusted’ to make these decisions.  For whom is ‘performance-related pay’ prioritised? A nurse who saves 20 lives this week is rarely given such rewards.

Gestures towards accountability, then, seem merely used to assuage public criticism of elite privilege. The monarchy uses discourses of accountability in strategic ways, while manipulating the financial outcome to benefit the institution.

The monarchy might be a unique case study for this given its legal exemptions and reliance on historical precedence. But the institution also reflects issues of elite accountability more broadly. The monarchy’s promise to pay ‘voluntary’ income tax is not a million miles away from the promises Starbucks made in 2012, after receiving public criticism for paying no UK corporation tax for three years. The managing director of Starbucks, Kris Engskov, announced ‘we will propose to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years’. He then admitted that ‘the tax authorities were unaware’ of these plans. Given that it is not based on profit calculations, the announcement essentially boiled down to ‘voluntary corporation tax’. Tax lawyer Conor Delaney said this ‘made a mockery’ of the tax system.

On the one hand, as I argued in my book, this comparison reveals to us how useful it is to consider the monarchy itself as a corporation: committed primarily to reproducing its own wealth and power. It might use different means to get there (i.e. historical precedence, rather than moving its operations to another country), but it’s the same end point. Indeed, there are times when the monarchy even uses identical means to global corporations: in 2017, the Guardian revealed that the Duchy of Lancaster had put investments in a Cayman Islands fund as part of an offshore portfolio. The leak of documents showing the investments, the ‘Paradise Papers’, listed the monarchy alongside other companies like Apple and Nike.

On the other hand, it also shows us the broader workings of elite accountability, and how this is used in strategic ways. What does accountability look like in different contexts and for different groups? Who gets to decide what accountability is? And how do we differentiate between “actual” accountability (whatever that is) and “performed” accountability? How can discourses of accountability be used in strategic ways for the image management of an institution, while behind the scenes it’s business as usual?

As a public institution that receives taxpayer money, accountability for the monarchy should be paramount. In defences of the monarchy, it is often claimed that they represent “the people” and work on behalf of “the people” for the “public good”. Leaving aside the issues of which “people” are (not) included here, royal finances also counteract these claims. If tax justice is a tool for creating equal and just societies, the monarchy’s abuse of the tax system is inherently unjust, reproducing elite privilege, and sustaining systems of global inequality.

Laura Clancy is a Lecturer in Media at Lancaster University.

Header Image Credit: Michael Garnett


Clancy, Laura 2023. ‘How can the British monarchy contribute to the ‘public good’ if it abuses the tax system?’ Discover Society: New Series 3 (3):

How stereotypes of ‘the taxpayer’ obscure the need for greater taxation of wealth

Karen Rowlingson

Stereotypical images of ‘the taxpayer’ often loom large during discussions about public spending with questions routinely posed about whether or not ‘the taxpayer’ is receiving value for money from the taxes they pay.  This image of ‘the taxpayer’ is typically of someone who is working, or more precisely in paid employment, because we tend to think of tax in relation to income tax on earnings.  We then contrast these ‘hard-working (income) tax payers’ with those ‘others’ on social security benefits who are typically seen as out of work and therefore not paying taxes.  Indeed, some stereotypes portray and stigmatise such people as ‘scrounging’ directly off those ‘hard-working tax-payers’.  In other words, dividing people into ‘skivers and strivers’. 

In reality, these stereotypes are incredibly misleading and stigmatising, and quite deliberately so, to support cuts to taxation and the welfare state.  Let’s take the stereotype of the ‘hard-working (income) taxpayer’ first.   This is very misleading as a representation of taxpayers because income tax only accounts for a quarter of all tax revenue in the UK.  There are many other taxes: National Insurance, corporation tax, council tax, VAT, duties on petrol, alcohol, tobacco and so on.  And this means that it is not just workers who pay tax.  Almost everyone is actually a taxpayer, including those who are not in paid work.  Indeed, a 5 year-old child that uses pocket money to buy a packet of crisps is a taxpayer.  

It is also, completely inaccurate to suggest that ‘taxpayers’ are a separate group of people, distinct from those who receive social security benefits.  People on social security benefits will be paying VAT and other taxes.  Indeed, many people in paid jobs also receive Child Benefit or Universal Credit or other benefits and so will be paying income tax and National Insurance while, at the same time, receiving social security.  And some pensioners who are fully retired from paid work and receiving their state pension will also be paying many different taxes including income tax if their income from private pensions is sufficiently high.  People also benefit from many other forms of public spending beyond social security, including public spending on health and education.

So the stereotype of the taxpayer is clearly misleading but, some might still argue that those who are on the highest incomes will be much less likely to benefit from public spending compared to others while, at the same time, they will be paying higher tax rates.  This sounds very plausible on a superficial level but the reality here is much more complex.

For example, if we think about public spending more broadly to include education, health and social security, and if we look at people’s contributions and payment over a whole lifetime perspective, John Hills’ book: ‘Good Times, bad times: the welfare myth of them and us’ clearly evidences the fact that “most of us get back at least close to what we pay in over our lives towards the welfare state”. 

And we can also question the extent to which those with more capacity to pay tax are actually contributing their fair share.  For example, the British Prime Minister, Rishi Sunak, revealed in March 2023 that he paid £432,000 tax in 2021/22 on his income of £2 million.  In total, this made the PM’s effective tax rate 22% which Tax Justice UK have pointed out is the same tax rate as the average nurse making £37,000 a year. 

This might seem very surprising but the explanation for this is that those on the very highest levels of income and wealth (the ‘super rich’) take most of their income from their wealth, not their work. And taxes on income from wealth, like Capital Gains Tax, are much lower than taxes on work, like Income Tax.  Unearned wealth therefore pays much more than hard-earned work – a point that Thomas Piketty demonstrates very clearly in his major study of ‘Capital in the Twenty-First Century’.  So the majority of Rishi Sunak’s tax is levied on dividends on the shares he owns and capital gains on wealth he had accumulated, rather than on his wages as Prime Minister.  Thus, overall, his effective tax rate is the same as an average nurse.

We could reform our tax system so that income from wealth is taxed at the same rate as income from wages which would mean that those receiving £2 million from dividend income would pay the same as those receiving £2 million from wages.  It has been estimated that such reform of Capital Gains Tax could raise an extra £15 billion pounds every year for the public purse – and ensure that the super rich pay a higher effective tax rate than the average nurse.

But Capital Gains Tax is not the only wealth-related tax that we might reform, however.  We tax wealth very lightly in other ways in the UK including very light transfers of inherited wealth or lifetime gifts.  We also tax wealth-holding very lightly indeed, which leads to not just wealth-holding but wealth-hoarding including land-hoarding and property-hoarding – with land left idle and properties left empty while people are homeless or roofless or paying extortionate rents.

The arguments for increasing taxes on wealth seem clear and strong.  So what are the barriers to doing this?

Many on the right, including the current British Conservative government, are ideologically opposed to increasing taxes, including wealth taxes, on the rich as they believe that low taxes stimulate economic growth which benefits everyone.  Indeed, in the March 2023 budget, the government actually reduced wealth taxes in relation to private pensions, giving £4b away to some of the very richest over the next 5 years.  But this view about taxation is now disputed by many highly-esteemed economists and organisations like the OECD. 

What about those on the left, where we might expect less ideological opposition to increasing wealth taxes?    The Labour party in the UK appears to be taking a very cautious approach at present, perhaps concerned that any plans to increase tax could lose votes.  The research evidence, however, suggests that the majority of the public would support increased taxes on high levels of wealth and also high levels of income.  This was very clear from a survey of over 2,000 members of the general public (‘tax payers’) which took place in the summer of 2020 right in the middle of the Covid pandemic.  People said that the main reason they supported wealth taxes was not primarily to pay for public services, which we might have expected at that time, but because they felt that wealth inequality was too high and had been increasing too much. 

The public do have some concerns about wealth taxes but the main one is that the rich would just find ways to avoid them.  It is therefore very important (and would be very poplar) for every effort to be made to reduce tax avoidance and evasion.

Clamping down on tax loopholes could also yield a huge amount of money for the public purse as Prem Sikka has documented by pointing to over 1,000 tax reliefs in the system worth £480bn which could be seen as the equivalent of hand-outs to the better-off.

Political parties should therefore have confidence that there is popular support for taxes on high levels of income and wealth.  But there is another barrier.  The rich are a powerful group and can lobby politicians and influence popular discourse which then frightens the politicians.  And we have certainly seen this globally as many countries have cut or removed their wealth taxes under pressure from powerful vested interests – as demonstrated by the research of Sarah Perret, from the OECD, and Elizabeth Clark and colleagues’ work for the Wealth Tax Commission.  

Even more concerning, perhaps, is that the rich are precisely the people in the most powerful positions who make policy in this space.  Rishi Sunak, the Prime Minister himself, is just one example given above from many in government positions.  And it was recently revealed in the UK, in May 2023, that three High Court judges had been investigated in controversial tax avoidance schemes that were challenged by HM Revenue & Customs, including one judge who has ruled on tax avoidance cases personally. 

Other evidence of the power of the rich is how they have managed to accumulate wealth in the first place – through processes of wealth extraction.  Gurminder Bhambra’s work on the relations of extraction and distribution within the British Empire provides a powerful global and historical perspective on these processes. So too does the work of the Decolonising Economics group that have pointed to extractive colonial practices which, in colonial India alone, facilitated the extraction of $45 trillion from the continent to the British State.  Other forms of extractive capitalist, patriarchal and racist practices also continue to facilitate high and growing levels of wealth inequality as highlighted in Runnymede’s ‘The Colour of Money’ report which indicated that the greatest wealth inequality in the UK is felt by families of Bangladeshi and Black African heritage, who have ten times less wealth than White British families. 

In conclusion, a fairer tax system, involving higher rates of tax on high levels of income and wealth, would help to reduce wealth inequality and provide more money for essential public services.  One of the steps that we can take to help secure this is to challenge the misleading ‘us and them’ stereotypes of the ‘hard-working’ taxpayer and the ‘scrounging’ benefit recipient.  But we also need to challenge the more fundamental extractive structures and practices which support the unfair distribution of income and wealth in the first place. 

Karen Rowlingson is Professor of Social Policy and Dean of the Faculty of Social Sciences at the University of York.

Header Image Credit: Craftivist Collective


Rowlingson, Karen 2023. ‘How stereotypes of ‘the taxpayer’ obscure the need for greater taxation of wealth’ Discover Society: New Series 3 (3):

How to pay for the National / International Health Service?

John Narayan

Neoliberal Britain is in trouble. Faced with the legacy of underinvestment and wage freezes after a decade of austerity and the inflation driven current cost of living crisis, workers across Britain’s quasi-public sector have embarked on industrial action not seen for forty years – with more workers prepared to act collectively and, importantly, with the public largely supporting such action.

Central to this return of class politics has been the context of the National Health Service (NHS) – which has seen the public move from clapping NHS workers during Covid to clapping NHS workers on picket lines during strikes. In reaction to a decade of relative underfunding, declining pay and a system at breaking point, nurses, junior doctors and ambulance staff have embarked on historical waves of strike action.

Writing about the Royal College of Nursing embarking on strike action in December 2022, the economist James Meadway made a sensible argument that, given its aging population and Covid induced backlogs, the UK couldn’t afford not to pay nurses properly if it wanted an NHS that functions. Given the figures of settling the dispute with nurses ranging from £2.6-10 billion, Meadway proposed two ways forwards.

1) an expansion of borrowing that would see all taxpayers foot the bill with the premise of growing the economy

2) equalising the rate of capital gains tax with income tax to raise around £16 billion as a possible solution to the impasse over pay and working conditions for nurses.

These debates are crucial as they rightfully put into focus the pay and working conditions of key workers within society – and set out a relationship between taxpayer, service user and workers within the NHS that maps onto broader debates about taxation and income and wealth inequality in British society.

Yet, what I want to suggest in this piece is that simply seeing the current confrontation of NHS workers with their state employers over pay and conditions as a national debate about funding and taxation obscures how such a national service has been and continues to be paid for, at least in part, by others far beyond Britain.

In our 2020-piece Brexit as heredity redux: imperialism, biomedicine and the NHS in Britain, my co-authors and I reflected on the role of the NHS in the Brexit debates – both on and beyond the now infamous red bus and its £350 million promise for the NHS. Part of our argument was that ideas for Brexit often racialised the idea of the welfare state and its constituent parts, such as the NHS. These debates delimited those deserving or non-deserving of treatment whilst whitewashing how the history of empire was key to the NHS and erasing the NHS’s current forms of imperialist extraction of human capital from nations in the Global South.

There is a global shortage of healthcare workers. The World Health Organisation (WHO) estimates a projected shortfall of 10 million health workers by 2030, mostly in low- and lower-middle income countries. Britain’s links to its former empire and its status as a ‘developed economy’ allows the NHS to extract migrant labour to mitigate the lack of investment and planning to produce its own healthcare workers.

For example, 7 of the top 12 suppliers of foreign doctors for the NHS in England are former British colonies or protectorates such as India, Pakistan, Egypt, Nigeria, Ireland, Sudan and Sri Lanka. This is also apparent across nursing where India, Ireland, Zimbabwe, Nigeria and Ghana make up 5 of the top 12 suppliers of foreign nurses.

Such ‘brain drain’ from the Global South leads to a significant inability of poorer countries to provide their own domestic healthcare and reinforces exploitative economic relations between richer and poorer countries. In effect, this creates an imperialist set of relations where poorer countries in the Global South subsidise richer countries in the Global North –  and health systems like the NHS – by paying for the education and training of their immigrant healthcare professionals often at the detriment of their own health systems.

A good example of this was Sierra Leone, one of the world’s poorest countries. At the height of the Ebola crisis in Sierra Leone (2013–2015), which was hastened by the country’s lack of trained staff, the NHS employed 27 doctors and 103 nurses trained in Sierra Leone. This amounted to around 20% and 10% of the number of the doctors and nurses to be found in Sierra Leone itself at the time. This was compounded by the fact that Sierra Leonean trained doctors and nurses employed by the NHS amounted to Sierra Leone providing a financial subsidy to the UK in the region of £14.5–22.4 million.

Outlining the imperial dimensions of NHS recruitment is important to confronting false narratives engendered by Brexit and state racism about who was paying for and who should have access to the NHS. What we showed was that the divide between the NHS, its service users, and taxpayers was not confined to the UK, but opened into wider debates about how the international community – or rather some of the poorest states on the planet – were partly paying for and subsiding our most quintessential ‘British’ state institution.

Since Covid-19, and the unfolding of Brexit’s impacts on the labour market and immigration, the conditions that engender such an imperial transfer of human capital and subsidy to the NHS and Britain have deepened. There has been an acceleration of international health worker recruitment since the pandemic and increased movement of health care workers from poorer to richer countries as workers seek better renumeration and working conditions.

The WHO Health Workforce Support and Safeguard List identifies 55 countries as ‘vulnerable’ with an insufficient availability of health workers required to achieve the UN Sustainable Development Goal target for universal health coverage (UHC) by 2030. These countries have a health workforce density below the global median: 49 medical doctors, nursing and midwifery personnel per 10,000 people. The WHO recommends that such health systems are strengthened partly through limiting active international recruitment of workers in listed countries by developed healthcare systems.

At home, the NHS has seen an acceleration of international health worker recruitment. Research by the Nuffield Foundation has shown that the decline in EU staff recruitment in the NHS has been compensated by increased recruitment from the rest of the world. Although this hasn’t solved the NHS’s recruitment issues – with many specialist roles remaining unstaffed – there has been a shift in the make-up of the foreign work force of the NHS.

A good example of this has been nursing, which has been subject to the 2019 electoral commitment by the Conservative government to increase the number of nurses by 50,000 (full-time equivalent) by the end of 2023/24. Within nursing, EU and EFTA nurses and health visitors have decreased by 28%, from 38,992 to 28,007 between September 2016 and September 2021, whilst those from the rest of the world have increased from 67,055 to 97,731. To put this into context, a near 11,000 loss in EU nurses, has been accompanied by an increase of around 30,000 nurses from the rest of the world.

The NHS follows The Code of Practice for International Recruitment – which produces a  list of ‘red’ and ‘amber’ countries based on the aforementioned WHO Health Workforce Support and Safeguard List. Yet, due to the engrained flows of people from its former colonies and a decentralised form of recruitment in the NHS the current influx of nurses into NHS has often contravened this system.

The Nuffield Trust reported that in the six months to September 2022, more than 2,200 (20%) of new international nurses came from just two red list countries: Nigeria and Ghana. By the end of 2022 more than 1200 nurses from Ghana joined the UK’s nursing register and in the year to March 2023, the figure for Nigerian nurses has reached nearly from 3,500.

In addition to this, the UK government has developed bilateral agreements with red list countries like Nepal and Ghana that appear to offer a path for the NHS to actively recruit nurses from red listed countries. The latter agreement even appears to include a payment of £1000 per nurse.  What is clear here is that even at it breaking point the NHS continues to be propped up by unequal transfers of labour and capital from the Global South.

The current wave of strike action in the NHS has rightfully questioned neoliberal orthodoxy on the welfare state, income inequality, and issues such as funding and taxation. But the reality of the extraction of human capital into the NHS raises genuine questions about nationally focused tax-based solutions. The need to raise or redistribute tax revenue to alter the working and living conditions of those working in the NHS, such as nurses, should not be questioned or turned back.  

But the idea simply returning more money into a nationally-bound universal health service ideal – tax-funded by and free at the point of delivery for British citizens – fails to adequately deal with questions about global health worker shortages, global health inequalities or the neo-imperial extraction of healthcare workers.

The above is important because as the neoliberal orthodoxy is being questioned in Britain, we should pay attention to the answers being generated. As I have outlined with Ishan Khurana in these pages, even though the neoliberal global economy is in crisis at the international level, and we have seen a return of state and class politics at a national level, without a real understanding of the imperial underpinnings of neoliberalism such endeavours may leave us with a regurgitation of the racialised and securitised contours of social democracy.

For instance, reforming the NHS would entail not only providing just pay and working conditions through taxation for NHS workers or simply rejecting the idea of foreign workers in the NHS in the pursuit of national autarky – but rather should examine issues such as how the border regime and state racism prevents access to those who already pay or work for the NHS; reforming the training of NHS staff within Britain and by default linking this to industrial and higher education policies; and reparative readdress for unaccounted funding by, and the damage wreaked on those living within, the Global South.

In this sense, how can the British taxpayer and the national health service contribute to a wider international health service for the many and not the few? To expand the idea of class this way is thus to examine how the cost of living here impacts the cost of living over there – and to organise to reduce the cost of living everywhere.

John Narayan is a Senior Lecturer in European and International Studies at King’s College London and an anti-racist scholar of globalization and inequality.’ John’s most recent publications have focused on Black Power and the political economy theories generated by groups like The Black Panther Party and Black Power groups based in the UK. His current research centres on anti-racism, abolitionism and IPE, and the political economy of the influential anti-racist scholar Ambalanaver Sivanandan. He is Chair of the Council of the Institute of Race Relations and a member of the Race & Class Editorial Working Committee.

Header Image Credit: NHS Employers


Narayan, John 2023. ‘How to pay for the National / International Health Service?’ Discover Society: New Series 3 (3):