Sunday, 22 January 2012

'Free' market myths no.2: low taxes are good for you

The saying that 'only two things in life are certain, death and taxes' has been attributed to Benjamin Franklin, and taxes are certainly something which has vexed the political right for a very long time. The Republicans in America have set their face against taxes even if it makes economic recovery harder, and for the Tea Party low taxes is an article of faith. Surely they are right? Isn't it a no brainer? Low taxes have to be good for you, don't they? That is what we have been told almost day-in and day-out for the past 30 years, and, in that time, right wing governments have lowered Taxes all over the world. Are we better off because of this? If you take a hard look at what is happening - clearly the answer is no.

Pieter Brueghel the Younger, 'Paying the Tax (The Tax Collector)'

The simple fact is that low taxes only benefit the rich, or the 1% if you prefer, and the politicians who have been telling us that low taxes are good for us are well aware of that fact. In the USA we have seen an ever widening gap between the 1% and the rest of society, as they take a larger slice of the economic cake and pay less in tax. To be fair, some of the richest Americans, like Warren Buffet, have called for the 1% to be taxed more heavily. I'm not that bothered about the super-rich being taxed more heavily. What I want, in a democratic society, is for everyone to be taxed equally, and for workers to get a real share of the wealth they create. I don't want redistribution. Redistribution is only necessary in a capitalist society because the capitalists expropriate wealth from workers through the mechanism of surplus value, as Marx showed us. Everyone should be taxed equally. Full stop. If I earn £10,000 and pay £3,000 tax, you should pay £300,000 tax, to the penny, if you happen to earn £1,000,000. But in capitalist democracies tax regimes don't allow for this. The rich pay less tax on their earnings than the poor. 

We need taxes to pay for the infrastructure and services that we all depend upon. The 99% rely on those taxes to fund education, healthcare and public services that they all need. And it makes perfect sense for all for those services to be paid for collectively for the benefit of everyone. Only the rich can afford to pay for these services themselves, so they have a vested interest in low taxes. Don't be fooled. Low taxes mean diminished public services that most of us can ill afford to live with. Our politicians have betrayed us by promising low taxes and great public services. That can't happen because you only get what you pay for. Taxes, as long as they are fair, are a good thing for the overwhelming majority of citizens in society.

3 comments: said...

As long as the system of collection is fair too. Put the millionaires on P.A.Y.E.

Kamil said...

Low taxes mean diminished public services that most of us can ill afford to live with. Our politicians have betrayed us by promising low taxes and great public services
Unfortunetly gov. take to much duties which he shouldn't because it is private matter ofthe people. FOr example health service, pensions, insurance and welfare.

If you delete these benefits you can bring tax down without harmfor the people.

I think that more responsibility for the people could be better. It is not save to be dependet from somebody. Specially from the goverment.


Howard Thorp said...

Kamil, on the contrary it makes perfect sense for a government to provide services, paid for through taxation, for the majority who cannot afford those services themselves, and never will be able to, even if we have low taxes.