Saturday, August 27, 2011

A crisis tax for the rich

There is a bit of hypocrisy in recent declarations made by wealthy people like Warren Buffet, an American billionaire and others who followed in several countries like Luca de Montezemolo, the former president of industrialists n Italy or Etienne Davignon, a Belgian politician and businessman (as well as an influential member of the Bilderberg club). They acknowledged that their tax bill is too low and that all declared that they are willing to pay more taxes. Is that because the super rich are becoming more generous and are affected by a crisis of philanthropy?

The point is that most of these people made money with money and taxes on capital gains are ridiculously low relative to taxation on labour or productive capital. They got richer and richer, and inequality got bigger and bigger. If we look at effective tax rates over time, they have been declining substantially for those who are very rich. most governments introduced substantial tax cuts which benefited to them in a much larger proportion relative to the other categories of the population.

In fact, capitalists who became even richer are afraid of the social consequences of the crisis which led to  austerity programs which hit severely the poor and middle classes. Right wing governments as well as those led by socialist parties were so far reluctant to introduce higher taxation on capital. In fact, left wing parties are even more discredited as they failed to promote social justice and solidarity. It is not a coincidence that Merkel and Sarkozy pledged for a tax on financial transactions together with the'golden rule' on balanced budgets in all euro area countries.  

The rich should therefore pay their fair share, not only for moral reasons but also for economic reasons. A wealth tax (not limited to capital gains) would  alleviate the debt burden of the States which in large part is caused by the economic crisis and the  massive injection of public money into the banking system and other parts of the economy.  In the past decade or so, there has been a massive shift of resources from wages to profits. In other words, the money went to capital, not labour.

Against the 'less tax' slogan of the neo-liberals, we call for Tax justice to reduce poverty and inequality.

1 comment:

  1. Jean-Claude Juncker, prime minister of Luxemburg and president of the Eurogroup states that “It is a good thing that multimillionaires conclude that they need to make an effort and show solidarity. However, I am in favour of a structural redistribution of wealth. It should not be about charity, but about solidarity” 

    Soir: Interview de Jean-Claude Juncker : "II n'y a pas de crise de l'euro" page: 29 info: by Delvaux BĂ©atrice date: Saturday, September 3, 2011