At last, novel solutions are entering politics! Mike Dowson considers the "Buffet Rule", for catching wealthy tax-evaders.
Imagine you have $10 billion dollars, like some of the super-rich. Consider that figure for a moment. That’s a million dollars, ten thousand times over.
It’s hard to visualise, isn’t it? In $100 bills, a million dollars would fill a microwave. Now imagine ten thousand microwaves. That’s a large warehouse full of $100 bills.
Imagine that this year you increase your fortune by another billion dollars. That’s another thousand microwaves full of cash.
Do you find that prospect exciting? Think of what you could do. Try it. Make a list.
I bet you run out of ideas long before you get to a billion. Most people don’t get past real estate for the family, a few fancy toys and luxury holidays. Even the actual rich mostly settle for horse studs, football teams and private jets.
What could you do next year, with $11 billion, that you couldn’t have done with ten? What would you buy? A small country?
Perhaps you’re a person with a grand vision, like Elon Musk, or a major philanthropist, like Bill Gates. But the statistics say you almost certainly aren’t.
In truth, it’s likely you would just keep it, probably in a tax haven, invested where it gets bigger all by itself. The only benefit you would derive from it is the miserly satisfaction of having pushed your way up the scoreboard of global plutocrats. Is that a good use for a billion dollars?
Panama Papers: How Malcolm Turnbull made his $3million tax haven windfall https://t.co/86c68U5fYU via @FinancialReview
— Stuart Tomlinson (@virgotweet) March 29, 2017
What if, instead, we divided that billion among the million poorest Australians. That’s a thousand dollars each. That could mean a rental deposit, a child’s dental care, or a computer for work. For a million people. And that benefit would flow on to another million people who provide those services. Money circulating is money working. Money in Panama is on holiday — or worse, up to mischief.
Well, you might say, I can do what I like with it, I earned it. But did you? Where did it come from? Even if you worked colossal hours, that’s about three microwaves full of cash every day. What contribution could anyone make, day in, day out, that is worth that much?
You probably got that money just by having money in the first place. It stayed where it was, tucked away in its tax haven, invested for profit.
Well, you say, that’s useful. I provided capital to industry, for growth and jobs. But did you?
Investment in the productive economy has been falling for years. Rising profits haven’t gone back into productivity, they’ve gone to shareholders like you. Because wages are stagnant, ordinary people must work longer hours just to stay where they are. That’s where our meagre growth comes from. Meanwhile, the industries you invest in are getting rid of jobs with automation, or sourcing them in cheaper countries.
Perhaps your traders just played the markets with it, harvesting gains from volatility. Perhaps your businesses gobbled up smaller players, shed jobs and handed you the proceeds. Perhaps you invested in alcohol, or gambling, or payday loans for the desperate poor. They’re growth industries, after all.
But, you insist, those activities are all perfectly legal. These are markets. People decide what they want and how much they’re willing to pay.
'Inequality increases instability and damages economic growth' https://t.co/3WpIApsuCl
— Catherine Anderson (@cmalinx) February 4, 2017
But do they? Not when they can’t find a job, or their wages are barely enough to live on, or they’re disabled, or caring for someone who is, or escaping domestic violence. That’s several million of your fellow Australians.
People don’t decide what to pay for essential services, like privatised power. And not when the market is starved of competition, as it is in banking, supermarkets and housing construction — possibly other things you invest in. Perhaps you even managed to secure some lucrative taxpayer subsidies for your industries, so ordinary people pay you all over again.
The fact is, you didn’t "create" that wealth at all. Even if you invested in something genuinely productive, you only provided money. The market, the innovation, the skill, knowledge, human energy and supportive infrastructure — all that was provided by others.
Well, you protest, I didn’t make the rules, at least not until recently. So, the world isn’t fair. I just made the most of it. I was rewarded for being clever.
Really? Is that so clever? Exploiting weaknesses in the system. Taking from the greater good because it was carefully left unattended by the derelict officials you helped to promote.
Because that’s the truth of it. In a properly functioning system, you wouldn’t be able to do any of this. Any more than I can rob people at gunpoint on the motorway.
If the corridors of power weren’t crawling with your lobbyists, if you weren’t stuffing the coffers of our political parties, if you couldn’t launch a campaign of disinformation every time an idealistic legislator tries to serve the interests of the country, you’d have to do something useful for a living.
When the measures of well-being for ordinary Australians are improving again, you can tell us how clever you are. When there are no more starving children, no more homeless people, no more working lives ending in poverty, you can show us how much of that wealth you created.
We’ll know it had nothing to do with you. But we’ll humour you, if it makes you feel better.
Until then, shut up, and pay some tax. At least you can do that much.
Did you earn over $1 million last year? Did you pay zero income tax? No? Then you want a Buffett Rule: https://t.co/86ll6EKpza #auspol pic.twitter.com/Qk2YTYME5r
— Australia Institute (@TheAusInstitute) February 21, 2017
We’ll help you. So you don’t have to supplicate Satan’s minions to minimise your contribution to the society that sustains you, we’ll just apply a non-negotiable flat tax rate above a certain amount, let’s say a boot load of microwaves.
Yes, we know you’ll threaten to take your money elsewhere. Since most of your investments are scams for extorting money from the rest of us, that’s fine with us.
We don’t really need the money. If we had a government that cared even slightly about the national interest and the plight of ordinary people, we could fix our problems without you. You’re an irrelevance to the real economy. The most you do is lead some other poor fools astray.
This is about principle. If we allow people who already have everything to take, and take, and take, and give nothing back, and raise their children to do the same, we have lost the heart and soul of civilisation. That’s the end of the fair go. We might as well be ruled by a corpulent aristocracy.
Of course, this is just a thought experiment, isn’t it? We’re only imagining you have a billion to throw around. Since you’re reading this, you’re one of the great majority who doesn’t.
So why would you defend them? Or vote for anyone who does?
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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and speaking of class warfare @JeSeGrey - here's a multi billionaires take...#auspol #BuffettRule pic.twitter.com/yWSX7SDuNL
— Michael Tull (@Michtull) February 22, 2017
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