Posted by John, March 9th, 2012 - under Tax the rich, Wayne Swan.



Wayne Swan’s article in The Monthly arguing that a few rich pigs (my words, not his) are subverting democracy has created a bit of a storm.

All across the nation the filthy rich and their apologists have pontificated about the return of class war. Let’s be clear. There has been a class war going. The rich won.

Gina Rinehart, Clive Palmer and Twiggy Forest evidently create wealth. Without them (apart from better poetry and football) we’d all supposedly be living in poverty.

Of course capital doesn’t create wealth. Labour does. It is the work you and I, or in the three amigos’ case, the mine workers do, that creates the wealth. Rinehart and co then expropriate that wealth.

Of course, Swan’s ‘class war’ rhetoric was spin, part of an attempt to differentiate the neoliberal Labor Party from the neoliberal Liberal Party. At best it might be softening up the multi billionaire mining magnates for a few minor (or should that be miner?) tax changes at the edges to help with the budget deficit ‘problem’.

Well Wayne, if there are these rich few who think their interest is the national interest, who threaten democracy and don’t contribute fully to society (I agree) why not tax them? Just to jog your memory, here is an article I wrote in February this year offering some suggestions for doing just that.

It all began with me reading one of those delightful stories, in the Australian Financial Review of all places, trying to paint the French as somehow a little odd and quirky.

A rich British magnate has a holiday flat in the ski resort of Val d’Isere. Sir Lindsay Owen-Jones – you just can’t make these names up – is trying to shut down a chip stand nearby because he doesn’t like the smell, the noise or the sight. (Henry Samuel ‘French spitting chips over pom’s frites court case’ AFR Monday 6 February 2012 page 13. By the way, who is the twisted genius doing their headlines?)

Sir Lindsay visits the resort for a month a year.

Well, hasn’t his claim for loss of value ignited a fervour of ‘class envy’ in France? Valerie Maertens, the chip stand owner, has said the tycoon is acting like a feudal lord wanting to crush the peasants. (Funny, that’s the same sort of description I use for University management and its relationship to its workers. We peasants are revolting.)

Well, the locals have supported the chip stand owner in their thousands upon thousands. maybe the French aren’t so different after all. This looks like the same revulsion many of us here in Australia feel about Gina Rinehart, the richest Australian, buying a big share in a newspaper.

In among this Financial Review story of class war was a message for the Australian Labor Party. As the report in the AFR says:

The French are notoriously wary of high-earning bosses. Francois Hollande, the Socialist presidential candidate, has seen his popularity rocket ever since pledging to ‘tax the rich’ and declare war on ‘finance’.

Tax the rich eh? Who’d have thunk that would be a vote winner? Bash the banks. Another vote winner.

Why not combine the two, Labor? How about a super profits tax on the banks to fund all those socially necessary expenditures like a universal dental health care scheme?

Apply it to all companies making a super profit from the stolen land of Aborigines and Torres Strait Islanders and who knows, we might even have enough money to negotiate a real treaty with our Indigenous brothers and sisters.

Here are a few other tax ideas driven by the fact that Australia doesn’t have a progressive tax system. According to the ACTU, the bottom 20% pay an effective tax rate of 26.7%. The top 20% pay an effective tax rate of 34.5%.

Now remember, the bottom 20% own about 1% of the nation’s wealth; the top 20% own over 60%.

A left wing government would begin by making the income tax scales more progressive, not less as they have been becoming over the last 30 years.

As well, it could impose a wealth tax on the rich, bringing in billions every year from a tax on the wealth they hold here and overseas.

It could implement a death and gift duty so the sons and daughters of the Rineharts, Packers, Murdochs and Fairfaxes would pay tax on their ill-gotten gains.

It could even impose a minimum company tax on business so that the 50% of big business who currently pay no income tax, and those who reduce their effective rates to well below the current company rate of 30%, pay a little more.

And it could attack the disguised grants to the business and the rich through the tax system known as tax expenditures. The Treasury figures are revealing.

According to the Treasury statistics released a few days ago the superannuation concessions will cost us about $30 bn next year. According to ACOSS 80% of these tax benefits go to the top 20% of income earners. Those earning below $37000 get no benefit from the concessions.

Disguised grants through the tax system for business (euphemistically called ‘business tax expenditures’) for 2010-11 are in the order of $9 bn. Abolish them and your budget deficit disappears.

And the houses of the rich (along with everyone else’s) are not subject to capital gains tax. Maybe now is the time to tax the gains those who live on the foreshores of Sydney Harbour make on their multi-million dollar houses.

And that’s just a few thoughts from a deranged Lefty, Labor. Imagine what the neoliberals in Treasury could come up with in a day of thinking about squeezing the rich till their pips squeak.

Tax the rich? Nah, it would never be popular, would it, Labor? Just ask Francois Hollande, the man who could well be the next President of France precisely because he says he wants to tax the rich.