Thursday, April 22, 2021

i want to be clear that i am in favour of tax increases, just not sales tax increases, which are a regressive way to raise money because they make everybody pay the same percentage. the focus should be on getting people to spend more, not on punishing them for doing it. this is an idea called "flat taxation" that is generally championed by political conservatives, but is really preferred by the wealthy more than any particular political grouping.

rather, it's the people at the higher end of the income spectrum that should be carrying a higher burden, by paying higher income and property taxes. this is called "progressive taxation" and is the type of taxation that liberals and socialists prefer, as it takes the burden off of working people.

now, with the pandemic, we're exiting a period of neo-liberalism, so what this article by the tory media represents is a sort of confusion about where the economic doctrine is moving in the future. this idea of "broadening the tax base" was a part of the washington consensus, but that's been left behind, now, as we return to a softer kind of keynesianism.

we're going to have to push back against it, clearly. but, if politicians are concerned about winning re-election, they want to avoid flat taxes or sales taxes. we didn't like the gst - you might even remember that. rather than broadening the tax base, politicians in the future are likely to be concerned about broadening their voting coalition, and progressive taxation is the smarter way to do it in a country where the middle class has been ripped apart.

put another way: it may have been true thirty years ago that raising taxes on the rich was politically dangerous, but the result of that policy has been that a generation of people has found themselves with declining amounts of wealth, as a small elite makes off like bandits. that has now flipped over - that source of income has now been raided for all it's worth, and the only politically feasible way to balance budgets is to undo this historic shift of wealth upwards and go after the rich.

so, yes - taxes have to go up, and i agree with it.

but, we should be increasing taxes on the rich, and not on consumption. let's boost property taxes, income taxes, corporate taxes, inheritance taxes...that kind of stuff. that's where the money is. and, it's where the popular will is, now, too.

...because things change, and policies have outcomes; history is still unfolding, after all.