When the rich get poorer, poor
disappear’. If after some thought we consider this a sound goal
then what do we do to implement it?
To make the rich get poorer, and to make the poor
disappear’
There are all sorts of reasons put forward to justify the misguided belief that wealth will drift downward.
There are all sorts of reasons put forward to justify the misguided belief that wealth will drift downward.
Most are just rubbish and can
easily be proven to be wrong. New Zealand proves the point. OECD General
Secretary said “the assumption that the benefits of economic growth will
automatically trickle down to the disadvantaged are not true."
Roger Douglas attacked the financial norm in NZ by selling off
assets, contracting out services etc. This directly led to massive profits made
by his mates as they brought at giveaway prices and then stripped the assets
and sold off what was left, one good example was New Zealand Rail. These few
individuals made millions if not billions.
While this was taking place Douglas and the Labour
Government and later Ruth Richardson and National continued down the same
Neoliberalist Capitalist pathway the workers and especially the poor were
forced ever downward toward poverty. This from Susan St-John:
“I warmed to Jim
Bolger considerably after his Mea Culpa moment. His government indeed was responsible for the unfortunate
gutting of the unions and the massive redistribution to the wealthy under
National’s failed trickle-down theory.
In contrast Jenny Shipley has no such insights or humility as to her role in the social chaos produced
by her government in the 1990s. One of my vivid memories was listening to the
dulcet tones of Ruth Richardson and Jenny Shipley announcing benefit cuts in
Parliament and the audible sucking in of breath. The ill-effects of the
ill-fated 1991 budget reverberate 26 years on.
The wealthy present heart-wrenching stories via the MSM
about they will be effected if taxation for them is increased, cosh they’d have
cut their time with their personal trainers. Only take two monthly holidays
overseas rather than three months. They suggest that if they buy less
Gulfstream jets thousands of workers will be laid off, according to them they
are the mainstay of the economy…this is basically a lie.
Since buying and
selling money has become the only real business…production and the rewards from
production effort has devalued. I have no sympathy for depriving the wealthy
their massive incomes, after all if you cut CEO’s three million dollars per
year to one million I’m sure they will be able to survive. After all we expect
workers earning eighteen thousand to survive.
Most of the friends of Douglas and Richardson now live
overseas in luxury and make maximum use of world-wide tax havens etc. New
Zealanders had their welfare or pension lowered by Richardson at a time when
Douglas had driven up the unemployment figures to record highs not seen since
the great depression. And these people can’t move overseas and use tax-havens
to protect their incomes, when laid off they suffered a massive loss of income
by going on a benefit and to have these benefits cut was a double whammy.
We all know that when the poor [and these days even the so-called
middle class] receive a boost in income; they spend that increase, to pay their
bills catch up on outstanding accounts, buy the kids new shoes clothing etc. So
if a country wants to reduce the huge gap between the rich and the poor it
needs to ensure that the poor receive an increase worthy of the name.
But the government keeps telling us ‘we can’t afford it’, at
least not until we balance the books’…this just crap, government debt has gone
through the roof since Key took over from Clark as the chart shows; it proves
that National has no idea how to manage the economy. When private debt is added
we are amongst the most indebt countries in the developed world.
All this has taken place while both parties lowered tax for
the wealthy and made it easier for them to avoid tax by making use of
tax-havens or trust accounts. Keys bashed the poor particularly badly when he
broke his promise not to increase GST from 12.5% to 15.5%, most other countries
that use a GST tax, don’t use it on food, but we even ad GST to rates…in other
words a tax on a tax. GST has little or no effect on the wealthy.
Take Key for example, if his rate of tax was lifted by say
twenty percent, the effect be that he would spend a week or two less in his
Hawaii mansion, whereas the massive increase in GST reduced those on benefits by
twenty to forty dollars per week [minimum] or higher depending on individuals
circumstances. The Nats waited two years before restoring in part some of the
cuts introduced by Richardson and they did this just before the upcoming
election.
Once upon a time our top tax rate was as high as 75 to 80
cents in the dollar, and I should point out that wealthy people didn’t flee the
country…but today even with the top tax rate at 33 cents our wealthy send their
money off overseas to avoid paying this tax rate. Data tells us that very few
wealthy actually pay the 33 cent rate.
Of course the lower paid and those on benefits can’t send
their money off shore, should they have any spare money. But hey, the wealthy
have always believed that there is only one direction for the poor to move and
that is to become poorer…that to them is the law of nature in action.
So maybe you would like look for a party or push your
preferred party to introduce a policy of changing the top rate of tax and
removing GST off food and rates. In the last six years we have given away
around 2.6 billion per year to the wealthy while collecting the same amount
from the lower paid via GST and reduced benefits.
Of course the one tax that both major parties avoid
discussing is a capital tax, on property other than the home one is living
in…this is a big no-no, too hard. Labour attempted to tackle the problem but
got cold feet because of the number of neo-liberal acolytes that still reside
in that confused parliamentary party.
References:
http://www.stuff.co.nz/national/politics/opinion/81658900/Duncan-Garner-Mind-the-gap-the-growing-gulf-between-rich-and-poor-in-this-country
http://norightturn.blogspot.co.nz/2017/05/inflation-and-poverty.html
http://norightturn.blogspot.co.nz/2017/05/inflation-and-poverty.html
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