Covid-19 has had a devastating impact on families across the country and made exceptional demands on the health service. At the same time it has brought the vast bulk of the UK’s economy to a hard stop. Responding to both the health service costs, the social and economic lockdown the Treasury has spent billions of pounds.

The automatic stabilisers of transfer payments during times of recession have been magnified by both the depth and breadth of the economic impact. This has added enormous sums to the Government’s annual deficit which will in turn increase total government indebtedness to levels last seen after World War Two.

This level of indebtedness is certain to increase before it comes down. Cuts to government expenditure and increases in taxation in the midst of an historically unprecedented economic downturn will only deepen the depression and make recovery even slower.

At some point however a reckoning will come and taxes will have to be increased to address the costs of the combined health and economic consequences of CovEcon-19. When that day comes there needs to be some principles as to how the pain is distributed.

The first principle is taxation should be fair. In other words those with the broadest shoulders should carry most weight. This means the rates of taxes applied should be progressive with the rich and super rich paying very significantly more than those who are not within those categories.

There are a number of reasons for this. Firstly there is a moral argument that the riches of the rich and the super rich are so far distant from personal effort. The argument they are the just rewards to innovation or hard work have always been thin but now are non-existent in the vast majority of cases.

Second, the claim that the enormous rewards are what makes the economy grow thus providing the tide to lift all boats is discredited by the fact even when the economy grows most boats are stuck in the mud. Their crew’s, far from being lifted up are being drowned.

What is more in the 1950’s and 1960’s when the distribution of incomes was much less extreme than now the economy was more productive with better growth levels. As the captains of industry have increased their pay growth has gone down. It is time this was reversed.

There is another, economic, argument which is critical in societies based on consumer capitalism. Basically, the need for consumers. The rich and super rich tend to save very significant proportions of their incomes, buying financial assets.

The vast majority of the population save much less, indeed, many save nothing. All of their income is spent. They are the consumers of consumer capitalism. In aggregate, over the past thirty years the share of income going to workers as opposed to owners of capital has gone down. Thus reducing aggregate demand in the economy. A bad thing.

Redressing the balance therefore would not just be morally, but also, economically good.

The second principle is that everyone should pay their taxes. This seems obvious and for the vast majority of the working population is an inescapable given. For those with large incomes however taxes become more optional.

Governments talk about addressing this at the same time as they reduce the number of tax inspectors, and allow the Crown Dependancies like the Isle of Man and British Overseas Territories, like the Cayman islands to provide opaque financial locations for those with large fortunes to hide their wealth.

As the recent Report of the Intelligence and Security Committee has indicated, London, always an innovative financial centre, became the ‘laundromat’ for the illicit finance of Russian oligarchs. This enabled them to park the wealth extracted from their country into a stratospheric property market having detrimental knock-on effects for the rest of the housing market in the City.

The Russian elite are not the only ones using the City to hide their wealth. Plenty of locals take advantage of the creative skills of the big four accountancy firms to avoid and evade taxes, a distinction which needs to be redrawn to provide clarity and more tax.

The two principles do not appear revolutionary. But they are. To make them effective will certainly require new legislation and investment in resources to implement that legislation. However, much more than this will be a political determination to drive through the radical transformation to the economy they require.

Failure to do so will undermine the support for taxation which is critical in a democracy. Eventually, consent to tax will be withdrawn and we will no longer be able to purchase civilisation.