Closing the wealth gap may be achieved in a number of ways. We might simply reduce the incredibly excessive wealth of the few who own most of the nation’s financial resources, doing nothing for the poor; we might elevate the circumstances of the poor, whilst allowing the super-rich parasites to continue basking in luxury; or we might do the Robin Hood thing – use resources “liberated” from the mega rich to create programmes which enable the poor to lift themselves from poverty.
Whilst the idea of ripping off the filthy rich is attractive to people such as me, it’s unlikely to be entirely acceptable to society as a whole, and especially not to the filthy rich who ultimately control the nation’s governments.
The single factor that will prevent a fair division of our society’s wealth, is the fact that such an endeavour does not fit within the politicians’ basic, self-serving agenda.
Pollies’ primary drive is to be elected and re-elected, an expensive process under the present electoral system. The rich and powerful gain and retain power by financially supporting the election of pollies who are sympathetic to their wishes. By legislating to reduce the wealth of the privileged, pollies would be effectively cutting their own throats, so, if the present domination of politics by the filthy rich continues, we will never see change.
However, bear with me as I proceed to expand upon my delusion. Here are the steps which I propose:
- Dispense with income tax as a means of providing revenue for the nation’s government. Taxing a worker’s earnings is a disincentive for people who would choose to work more, in order to gain greater financial reward. In principle, additional effort should bring additional reward. In practice, it often moves a worker into an income tax bracket in which increased taxation means that the extra work is not appropriately rewarded.
Australia’s politicians, over decades, have structured tax laws that enable the rich, and often the politicians themselves, to avoid income tax. This has meant that a wage earner might be required to contribute, say, 30% of her/his earnings, whilst a company director who earns five times as much as that wage earner, manages to legally contribute only 3% of his/her income.
- Ensure that all companies, and any other revenue making entities, which operate in Australia, using our services (including our markets), contribute financially to the provision and maintenance of those services.
At present there are companies taking advantage of Australia’s tax laws (laws designed by pollies who are, perhaps, supported financially during elections by such companies) to minimise or avoid contributing to Australia’s income.
Journalist, Gareth Hutchens, writing in The Guardian , December 7, 2017 reports:
The tax office has revealed 36% of the largest public companies and multinational entities in Australia paid no tax in the most recent financial year on record.
It means there has been no significant shift in the proportion of companies paying no corporate income tax in Australia since 2013.
It covers the 2015-16 financial year, revealing key details of 2,043 of the largest companies with operations in Australia.
The ATO’s report lists the total income, taxable income and tax payable for each entity. It says a company has not necessarily done anything wrong if it has not paid tax on its taxable income.
It says while the majority of entities in the data made profits and paid tax in 2015-16, sensitivity to economic conditions, reinvestment back into the business, distribution of profits to other entities within the broader group, tax deductions and tax offsets could affect the amount of taxable income and tax payable for each entity.
But it shows a range of household names paid no or little tax in 2015-16:
- Adani: $0 tax paid on $724m revenue.
- Chevron: $0 tax paid on $2.1bn revenue.
- ExxonMobil Australia: $0 tax paid on $6.7bn revenue.
- Origin Energy: $0 tax paid on $11.9bn revenue.
- IBM: $0 tax paid on $3.6bn of revenue.
- Ansell: $0 tax paid on $326m of revenue.
- Glencore: $44m in tax paid on $24bn of revenue.
- Ikea: $11m tax paid on $1bn of revenue (its first tax paid in the last three years).
The Australian government has the power to ensure fairness in the paying of taxes associated with operating a company in this country, but, apparently, successive governments, of all persuasions, have chosen not to do so.
- Restructure the GST to create a system under which consumers can choose how much tax they are prepared to pay.
Some suggestions follow:
- – Remove the GST on all items essential for health and education.
- – Specify the lowest possible rate for basic food items considered essential for healthy dietary intake. Using the current model as an example, this rate would be around 10%.
- – Place a higher rate on foodstuffs considered to be non-essential for a balanced and healthy diet. This rate might be around 20%.
- – Place the highest rate on foods and beverages which are classified as luxury items. This rate might range from around 50% to 75%.
- – Specify the lowest rate (10%?) for building products used in the construction of housing which lower income earners might be able to purchase. Limit the interest rates applicable to mortgages for home buyers purchasing from this range of houses.
- – Place a higher rate on building materials used in the construction of more luxurious homes, along with a higher interest rate on mortgages for homes in this elevated price range.
- – Place a premium GST on the construction of palaces.
- – The GST on basic model motor vehicles should be lowest, with an increasing scale applying to vehicles as their retail prices become more expensive, say 10% for the garden variety Holden, Ford, Toyota etc., increasing to 100% for Rolls Royce, Ferrari and the like.
- – The strategy of applying increasing GST on items as they increase in price and level of luxury, can be applied to all consumer goods, such as clothing and furniture, thereby enabling consumers to choose how much tax they can afford to pay. If I want to buy a boat, I’ll pay 10% GST on a 3 metre tinny, but when I save up for my $3 000 000 yacht, the GST will cost me another $5 000 000, which I will, of course, be willing and able to pay.
Better minds than mine can develop this concept further, creating legislation to make it extremely difficult, if not impossible, to avoid paying taxes.
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How much money should people have?
I firmly believe in the need for a “baseline” which suggests what it is that people need in order to live a life with dignity. To try to establish this on a global basis is beyond my present resources, so my comments will focus upon an Australian context, but even this task presents great difficulty.
Having personal experience of both relative poverty, and its impact upon human beings, as well as relative affluence, I am able to describe my needs and to attempt to relate these to Australians in general.
It’s important to differentiate between “needs” and “wants”. A simple example should suffice: I live in a rural area in which public transport is difficult to access, therefore I need a car in order to manage my life. I want to own a new car, but I’m unable to afford one, so I satisfy my need by owning an older car.
When determining how much money people should be able to access, a baseline which focusses upon the satisfaction of needs and not wants, is my starting point. What, then, are the basic needs of all Australians? I’ll list my thoughts and perhaps you can add to them.
- Adequate quantities of suitable food to sustain good health.
- Adequate shelter, of a standard that enables people to be provided with all of the services that are considered necessary for dignified living.
- Access to employment, which is appropriate to a person’s aptitude, skill set and preference.
- Access to completely free health care and education.
- Access to a means of transport, which enables a person to travel to work, for recreation and for family contact.
We must consider the satisfaction of needs in the context of contemporary Australian society.
We are a developed country with sufficient economic resources to provide for the needs of every Australian. The fact that those resources are inappropriately allocated is a political issue, which can be addressed elsewhere.
So, how do we ensure that all Australians receive a fair share of the cake?
First, we must ensure the presence of a political will to see that the cake is appropriately shared. We do this by electing representatives who demonstrate a social conscience.
This is the point at which my whole “house of cards” comes tumbling down – the point at which my best theories become no more than “pie in the sky”.
Australian politicians are notoriously incompetent, corrupt and self-serving. (Reference “Rant 8 – There Has To Be A Better Way”.) There needs to be dramatic surgery carried out on our political system, in order to excise the putrid flesh and leave a wholesome body. Sadly, this will never happen.
Secondly, the parliament must legislate a Bill of Rights, which stipulates the minimum entitlements of every Australian citizen. (You may note my absence of concern for non-citizens.)
Next, we ensure that government policies are directed towards establishing a socio-political climate in which people are valued:
All education must be free, available to all and sufficiently comprehensive as to enable people to learn according to their needs and desires. Remuneration for education professionals (those working directly with students, not those who are allegedly functioning bureaucrats) must be commensurate with their value to their community.
The housing market must be regulated in order to ensure that acceptable, affordable rental accommodation is available to those who choose not to buy a home, and that home-buyers have access to a market which has not been politically manipulated in order to provide massive profits for developers and investors. An “average” wage earner must be able to afford to buy a “standard” three bedroom home which contains adequate space in which to swing a decent-sized cat.
A universal standard of health care, which is not income-dependent, is essential. The same level of care currently available only to the privileged class, must be available to all. Remuneration for health care professionals must be commensurate with their value to their community.
Employment programmes must be designed to satisfy society’s needs while enabling people to become employable and employed in real jobs.
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