Tax the rich in Australia
An unpublishable letter I sent to the Australian Financial Review today.
Australian Treasury Secretary Martin Parkinson is predicting a crisis of funding into the future as a consequence of the collapse of the revenue bubble and increasing demands for government services. (Mark Ludlow and Jacob Greber ‘Treasury in spending wake up call’ The Financial Review Friday 17 August page 1.)
This could well result in savage cuts to governments spending, including services.
Is there an alternative to attacking vital services, an alternative to cutting down the forest to watch the weeds grow? I think there is.
How about taxing the rich?
A recent Tax Justice Network report showed the global super rich were hiding up to $32 trillion offshore. That’s the equivalent of the US’s GDP more than twice over.
The share of the Australian super rich could be up to $600 billion. Instead of cutting services maybe investigating more fully and then taxing the super rich on these hidden treasures might be a good way of funding vital services, including the National Disability Insurance Scheme, equal pay for women in the community services sector, a denticare scheme, and increased spending on public education, public health, public transport and addressing climate change.
But that is only a small part of the problem. There is much more scope to make the rich pay a fair share. After all they are the ones whose wealth has grown exponentially over the last 3 decades under Labor and the Liberals.
In Australia the income share of the top 0.1 percent has trebled and that of the top 1 percent doubled since the 80s. The super rich now have an income share greater than at any time since the 1920s. The top 20 percent own more than 60 percent of the wealth, the bottom 20 percent just one percent.
Abolishing business tax concessions would yield around $10 billion, ending the shoveling of our money to the rich for their retirement a similar amount, taxing non-residents on their capital gains perhaps a billion, a super profits or monopoly profits tax on all economic rents would yield perhaps $20 billion, taxing the 50% of big business which pays no income tax would yield billions, and a wealth tax and inheritance tax together with a capital gains tax on the homes of the rich would also bring in billions.
There’s perhaps $50 billion to spend on a better society.
Only one thing is missing – the political will. Neither Labor nor the Liberals, the two parties of the 1%, will tax that 1%.