Should We Mourn Our Cancelled Tax Cuts?

Political Currency: Though they’ll never admit it, the logical consequence of the Taxpayers’ Union’s policies is indistinguishable from that of every other “taxation is theft” outfit: expanding the domain of public pain by deliberately reducing the opportunities for its concerted public amelioration. Like the far-Right American lobbyist, Grover Norquist, they are determined to get the state down to “the size where we can drown it in the bathtub”.

“THIS IS THE WEEK tax cuts introduced in 2017 would have come into effect.”

In reminding us of this fact, Taxpayers’ Union spokesperson, Lois Houlbrooke, laments the Labour-NZF-Green government’s decision to spend money that would otherwise have been returned to “working New Zealanders” on undeserving students and superannuitants.

“It’s as though the New Zealanders doing the most to keep the Government afloat are held in its lowest esteem.”

These “working New Zealanders” (the stock right-wing description of taxpayers as “hard-working” appears to have been discarded) are invited by Mr Houlbrooke to “mourn” the loss of their well-deserved windfalls.

A few years ago, Mr Houlbrooke’s words would have fallen on a host of receptive ears. Today, I’m not so sure. In the months since their new centre-left government was sworn-in New Zealanders have begun to realise what happens when insufficient revenue is collected and insufficient public resources expended on the things that make for a civilised society.

The scandalous condition of the Counties Manukau District Health Board’s facilities, shocking enough in themselves, have raised questions in the minds of citizens throughout New Zealand about their own DHBs. How much urgent remedial work to local health infrastructure has been deferred out of fear of ministerial rebuke? Are Middlemore Hospital’s walls the only ones filled with toxic mould? How many other DHB’s are hiding leaking sewerage pipes?

These “bricks and mortar” problems pale into insignificance, however, when we are confronted with the ongoing crisis in New Zealand’s mental health services. With roughly one in every five Kiwis afflicted with mental illness at some stage of their lives, there are close to a million people out there in need of help which, assuming it can be accessed at all, will (in all but the most acute cases) be intermittent and inadequate. The pain and suffering, not only of the mentally ill, but also of their families and friends, is immense and unending.

The British political philosopher, Maurice Glassman, in his book, Unnecessary Suffering, observes: “The distinction between necessary and unnecessary suffering defines the limits of political rationality. In delineating a domain of pain which is amenable to concerted public amelioration from a sphere of grief that is immutable, it defines the power of society to respond to the miseries of life.”

Though they’ll never admit it, the logical consequence of the Taxpayers’ Union’s policies is indistinguishable from that of every other “taxation is theft” outfit: expanding the domain of public pain by deliberately reducing the opportunities for its concerted public amelioration. Like the far-Right American lobbyist, Grover Norquist, they are determined to get the state down to “the size where we can drown it in the bathtub”.

It’s hard to avoid the conclusion that many in these groups would happily see 99 percent of humanity drowning in there with it, providing the heads of the dominant 1 percent could be kept safely above water.

Seldom has the Labour Party and its ideological allies been presented with a better opportunity to expose the National Party’s propensity to short-change the electorate. Under the rubric of “responsible economic management” (whose discredited mantras Simon Bridges has reiterated all week without shame) money that should have been spent on keeping New Zealand’s social infrastructure fit-for-purpose, was instead presented to the electorate as a financial “surplus” – fit only to be returned to the pockets of “working New Zealanders”.

As one commentator observed: “That’s like putting your household accounts into a healthy surplus by refusing to feed your kids!”

If ever there was a time for Jacinda Ardern and her Finance Minister to walk away from the “responsible economic management” falsehood – it is right now. What New Zealand has been subjected to for the past nine years does not merit the word management; had precious little to do with rational economics; and most certainly wasn’t responsible.

In its place, the Labour-NZF-Green government should pledge to govern New Zealand justly and fairly by raising the taxes required to reduce – swiftly and substantially – the unnecessary pain and suffering of its citizens.

If it didn’t sound so Orwellian, I’d favour the “Tax Heroes” meme contributed to The Spinoff by IRD: “Tax is Love”. Because, in essence, that’s what progressive taxation is all about. Healing our sick. Teaching our young. Helping our poor. Sharing our wealth.

The alternative? The procurement of private advantage through public squalor.

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 6 April 2018.

The Price We Pay For Civilisation

A Winning Team?: Phil Goff and David Cunliffe (with a great deal of help from David Parker) have seized the high moral ground on fiscal policy. The 2011 General Election has finally become a genuine contest.

LABOUR’S TAX POLICY is as much a moral declaration as it is an economic statement. It speaks to our notions of fairness and equal treatment every bit as directly as it addresses the investor’s love affair with real estate.

This re-focusing of the electorate’s attention on the revenue-gathering aspects of fiscal policy is as timely as it is necessary. For far too long politicians of conservative mien have pretended that the only good tax is a dead one. That governments can go on blithely emptying-out the revenue side of the public ledger, (or, as they prefer to characterise it: “putting money back in the tax-payer’s pocket”) with impunity.

Not that they believed a word of their own propaganda. Even the densest conservative politician must have been aware that drastic cuts in revenue would, eventually, have to be balanced by equally drastic cuts in expenditure.

Nor were the more conservative sorts of politicians ever truly averse to a fiscal policy of slash and burn. Indeed, there are many on the Right who regard slashing and burning as the whole point of the exercise.

 

“MY GOAL”, boasted the far-Right American lobbyist, Grover Norquist, “is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.”

Nor was this idle rhetoric on Norquist’s part.

As anyone who follows American politics knows only too well, Norquist and his corporate sponsors have been as good as their eliminationist word. All over the United States, federal and state expenditures are being slashed, and tens-of-thousands of public servants laid-off.

And, in America, these firings have moved way beyond “the back office”. The United States’ once proud system of public education is being systematically starved of funds while massive sums are being voted to the corporate providers of private education in so-called “charter schools”.

To undercut the inevitable resistance from aggrieved public-sector workers, Republican Party governors have stripped the public-sector unions of the right to organise, strike, or engage in any effective form of collective bargaining.

So crazed has the American Right become since the onset of the global financial crisis, that the Republican majority in the House of Representatives is threatening to pull the plug on the US Government’s ability to pay its bills. Unmoved by the warnings of Wall Street that such a move would cause the United States to default on its debt – plunging the world into a new and exponentially more serious global crisis – the far-right “Tea Party” faction of the Republican Party refuses to be swayed.

Unless President Obama agrees to reduce federal expenditures by more than a trillion dollars, congressional permission for his administration to exceed the “debt ceiling” – i.e. honour America’s debts – will be refused.

That expenditure cuts on this scale would effectively dismantle what remains of the United States’ anaemic social-welfare system, far from restraining the Tea Partiers, explains why they have so far rejected every one of the President’s attempts at reaching a compromise. As one American pundit put it: “The Republicans are refusing to take ‘Yes’ for an answer!” 

THIS, THEN, is the logical end-point of the tax-cutting, expenditure-slashing, “austerity” mania currently gripping the Right – not just in the US but also here in New Zealand.

That’s why Labour’s embrace of a Capital Gains Tax is so important. It signals that a line in the sand has been drawn by the Labour caucus.

On one side stand all the democratic achievements of the New Zealand people: the public provision of health, education and welfare services; the State’s active engagement in the provision and maintenance of New Zealand’s basic infrastructure; it’s guardianship of our natural environment; its stewardship of our culture.

On the other side stand all those commercial interests slavering to turn these collective achievements into opportunities for private gain. The ideologues who would drown our state – along with all that it stands for and protects – in Mr Norquist’s bathtub.

The Norquists of this world see the welfare state as an unnecessary evil. But, in its place they would raise something even more malign: plutocracy. A state in which a citizen's worth is measured exclusively by their wealth, and where the only truly punishable crime is poverty.

It was the US Supreme Court Justice, Oliver Wendell Holmes, who said: “Taxes are the price we pay for civilisation.”

Labour agrees.

This essay was originally published in The Timaru Herald, The Taranaki Daily News, The Otago Daily Times and The Greymouth Star of Friday, 15 July 2011.