Friday, August 12, 2011

In search of a justification.


Many laughable statements come from the Neo-Liberal right, but the ones that seek a moral or economic justification for greed and meanness are the most comical. (If the effects were not so serious).

Like the one from a bailed out US bank manager. "God thinks I should have a bonus". :-)

The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
– John Kenneth Galbraith 

 The Standard.
 Debunks the idea that taxing the rich more cuts total tax take. In fact the opposite has happened. As taxes to the rich have been cut in Western countries, Government revenues have decreased in most cases.
As I have said before. In the time of its greatest prosperity the US top tax rate was 90%.
Recent top rate tax cuts in New Zealand have resulted in decreased revenue each time.

Decreasing taxes on business and high incomes means more capital  is free for more investment.
Did not work. Capital investment by private investors in NZ, the UK and the USA has decreased while they hid the money offshore, to dodge even more of the tax they should pay, or spend it on holidays in Hawaii. AND financial gambling. (Where we will have to bail them out next time they lose).

What's worse.
Cutting tax rates, and therefore revenues, cuts Government investment in the local economy in favour of those who take the money offshore. Never to be seen again.
In New Zealand the Government is borrowing offshore to pay for tax cuts to the rich. A double blow to the national deficit.

Similarly. Cutting wages is supposed to be an incentive for business to invest.
Trouble is cutting the wages of the businesses customers is even more of a disincentive. Low wage workers do not buy much.
Since the 1984 attacks on Unions and steadily dropping wages in New Zealand, direct investment in New Zealand production has dropped to 1/3 of what it was in the 70's.

Make the rich richer and they will give people jobs.
Jobs are not something the rich gives. Jobs are workers supplying their labour.
The rich are awash in money at present. 20% increase in the wealth of the richest in New Zealand. In the USA the rich are sitting on trillions. Where are the jobs??

In recent history job growth has come from State initiatives. It was not the private sector that pulled the USA out of the 30's depression, it was massive State spending, on the new deal, then WW2.

Lastly. The idea that the rich earn their money and we have no right to take it from them.
Who earns millions?
Most have millions because their family had millions. They contribute nothing and consume much more than poorer people.

Some entrepreneurs  have started new business, produced services and ideas of great benefit to many people. It can be said that they earned their money. 

It is notable that most of these people are philanthropists.

The rich benefit so much from our society it is only fair that they give back.

 Better to take some if this money back and reinvest in infrastructure and the necessary green technology to ensure humanities future survival.

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