'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.

A Tory driven ideological class war attack on British workers won't promote growth

It was bound to happen here, as it did in Wisconsin and other American states. First the capitalist class, or 1% if you prefer,  creates a crisis, a crisis of financial capitalism which nearly brings down the world economy. It does so through its ideology, neoliberalism; which means destruction of public services by privatisation; letting the banks and corporations run riot through deregulation; and the looting of natural assets by corporations through globalisation. Then, using their tame politicians in the UK, USA and Europe, it makes the middle and working classes and unemployed, the 99%, pay to bailout the banks and save the skins of the bankers. This is privatising the gains and nationalising the losses. Socialism for the rich, capitalism for the rest of us.

So the banks get saved but there is still a big problem because much of that debt incurred by the banks has now been transferred to governments and taxpayers leading inevitably to a sovereign debt crisis, which is where we are now. The Eurozone crisis has been triggered by the sovereign debt crisis brought about by the banking crisis. Still with me? We are nearly there.

In response to the sovereign debt crisis governments in the UK and Europe implement austerity programmes, ostensibly to bailout government debt, particularly in Greece and Ireland. But its not the poor old Irish and Greek taxpayers who are being bailed out, the money is being used, once again, to bailout French, German, Spanish and Greek banks. So taxpayers have been shafted twice, first in the bank bailout and secondly by austerity - which is just another bank bailout.

To top all this the right wing politicians who are the friends of the bankers and the 1%, are now using the crisis to try and smash workers rights. In the USA, in Wisconsin, the Tea Party backed Governor Scott Walker has used the deficit to not only slash services but to try to deny unions their collective bargaining rights. Now in the UK today we hear that the government is contemplating undermining workers rights by making them easier to sack and limiting further their already limited rights to an Employment Tribunal. This crude, class war attack on workers is being carried out in the pretence that it will encourage growth.

The real irony is that the rising unemployment, increasing poverty and lack of growth in the UK are a direct result of this government's austerity programme. Economically, this government is already a complete failure and its only to be expected that it should dishonestly try to pin the blame for that failure on working people and the unemployed, that, after all, is what class war is all about.

There is a solution for the 99%

Growing economic inequality in the USA, and throughout the West, is something that I have commented on before in this blog, and it is well documented. The incomes of middle class Americans have been stagnant or falling since the 1970's whilst those of the capitalist class have been growing. According to Rupert Cornwell in today's Independent:

"Income disparities are wider than at any time since the Wall Street crash of 1929, and almost 50 per cent of financial wealth in the US is now in the hands of 1 per cent of the population."

The American middle classes are really suffering the impact of 30 years of neoliberalism, and the effects of the financial crash, which began with the sub-prime mortgage scandal. Its important to make a distinction because 'middle class' means something different in the USA and the UK. In the UK, the middle classes are well-off professionals such as doctors and lawyers, whereas in the USA the term 'middle class' includes working families that would be described as 'working class' in the UK. Middle class Americans are crucial to the USA because they are at the heart of America.

Because the USA has always had privatised healthcare and higher education and a weak welfare system, the American middle classes have always lead a potentially precarious existence. If you get ill, you get large health bills, if you can't work because of your illness you can lose your job and your house. In a short space of time you could go from a fairly comfortable lifestyle to being out on the street. In the past the US economy has been strong enough to ensure that this didn't happen to most Americans. That is no longer the case. Millions of Americans are now finding themselves in a situation where they are living hand to mouth, knowing that if they lose their job they will lose everything they had. They are living in fear of joining the millions of families who have already suffered this fate.

We are the 99% is a website which documents the fears and suffering of middle class Americans. Many of these people are hanging on just one paycheck away from disaster and shouldering thousands of dollars of debt.

This photo is typical of the plight of people on We are the 99%

We are the 99%, like occupywallst, which I have been following from its start in mid September, is a reaction against the bailout of Wall Street, and growing poverty, unemployment and economic inequality. The Tea Party was also a reaction to the bailout which came largely from the middle class right and which was rapidly absorbed, manipulated and funded by the capitalist class as I reported here:

"That is what the Tea Party is all about. Millions of Americans are angry, bewildered and frustrated at the recent crash and the fact they aren't getting richer anymore. But there is a huge problem here - they are directing their anger against the wrong enemy. The people who caused the crash - the financial capitalists and corporations of Wall Street aren't being blamed. Instead, the anger is being directed at the government." 

Unlike the Tea Party, the occupywallst movement is really about social justice. It is a recognition that the growing inequality has to be reversed, and that the neoliberalist policies pursued by successive governments have failed the American people. As yet the movement appears to be leaderless and doesn't have a coherent programme and specific demands for change. But it is growing and spreading to other cities in the USA. It is beginning to cause concern to politicians like Obama, who have begun to take notice.

What should the demands of the occupywallst movement be? Well, it's not for me to say, but if you read about the problems of the 99% the solutions are fairly obvious. What Americans need is freedom from fear through access to jobs and public provision - in health, education and social security. These are things that we have in the UK, but we are in the process of losing, due to the Coalitions government's austerity programme, if we don't fight for them. Like us, Americans need a Green New Deal to provide jobs and tackle climate change, they need a properly funded system of public healthcare and higher education. What they need is social security as a right, not welfare as a handout.

One of the greatest of Americans tried to ensure that Americans had all these things but was unable to complete his project before he died. His name was Franklin D. Roosevelt and he enshrined the freedom from fear in his economic second Bill of Rights. His bill of rights is what the American middle classes need. The occupywallst movement don't need to invent a programme because they already have a ready made one, now they have re-discover it and fight for it.

Loony right trumpet the benefits of slavery

I just had to do a post on this. I have been wondering how long it would be before someone from the right in the USA started to bang on about the benefits of slavery. Well why not? Since the financial collapse caused by neoliberal 'economic' policies, which started in 2007, the capitalist class have been trying to make ordinary people pay the bill through a succession of bailouts. Look what has happened to workers in the USA. In places like Wisconsin workers pay, pensions and bargaining rights have come under attack. How long would it be before workers were expected to work for nothing? Why hang around? Why not just bring back slavery? It would be so much simpler, after all.

In the past few years, the loony rightists of the Tea Party have plumbed new depths for extreme 'free' market bullshit. So it comes as no surprise that Michelle Bachmann, their current darling, should have signed up to a pledge which said that children in the USA who were born to black slaves were better cared for than the modern day offspring of black Americans. Huh? The opening statement of the pledge actually read:

"Slavery had a disastrous impact on African-American families, yet sadly a child born into slavery in 1860 was more likely to be raised by his mother and father in a two-parent household than was an African-American baby born after the election of the USA's first African-American President"

This is the kind of racist extremist ignorance and prejudice that the lunatics of the Tea Party embody. Pledging in itself is just the kind of saddo activity which right-wing Americans love to indulge in. Of course, Bachmann has distanced herself from the statement, claiming she didn't read it, despite the fact she signed it - and, doh! - it was on the front page. The problem here is that Bachmann wants to be president of the USA. Ordinarily, we would look on people like Michelle Bachmann as a bunch of relatively harmless backwoods knuckle-draggers, but we should be more wary, because if let loose, the Michelle Bachmanns of this world pose a genuine threat to any decent society. As far as we know, unlike other female Tea Party nine day wonders,  she's not a witch, though being a witch would obviously be an improvement on being what she is.