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« Fun, Fun, Fun ‘Til Her Daddy Takes Her Calculator Away | Main | One Company's Ceiling is Another Company's Floor »

August 06, 2007

Comments

jim

Excellent stuff Michael, I would like to offer my help. What steps might we simply state we are suggesting when asked what we intend to do to alter distribution.

david

I asked previously why governments should try to reduce inequality. Michael, I hope you don't mind if I respond to your comment now.

"People acting democratically through state policy may want to reduce it for ethical or moral reasons (I note such an argument in today's Irish Times). They may want to do so because it is an economic cost. In this regard, its worth reading Will Hutton in The State We're In - his section on the cost of inequality is very strong. It's also worth noting that the wealthiest most competitive societies are those that have very low rates of poverty/inequality combined with progressive taxation and redistribution systems. They may also want to reduce inequality because the cost of not doing so is very high - if inequality is a factor in, say, poor health, this becomes a drain on the Exchequer. More equality, better health, reduced burdens. Ultimately, its all about the kind of society you want to live in."

Ethical/moral reasons.

Ethical/moral reasons are extremely important. I'd say most people would support anythig if they were convinced it was "moral".

I'm not much of a philosopher technically, but like a lot people I have an interest in ethics. And one thing I believe is that violence, and the threat of violence, is very rarely ethical.

Why would someone threaten violence against another person? If they are not doing it out of pure hatred, and are doing for selfish reasons, it's probably because they want the other person to do something for them, but they know that the other person is unlikely to do it voluntary. However, threatening violence does not take into account the feelings and desires of the other person, and of course the actual use of violence is a purely destructive act. For these reasons, the use of violence is generally considered to be smoething that should be avoided whenever possible.

These are basic lessons which we are supposed to learn and not specifically political.

However, I don't see anything to stop us from applying these ethical observations to the government. And the most obvious (one could say the defining) characteristic of government is that it both commits and threatens violence on a massive scale.

If you avoid paying taxes, you will eventually be sent to prison and your life will never be the same again. One can only presume that without that threat, large numbers of people would not pay their taxes. In fact, I think you can go further and deduce that people want to not pay their taxes so badly that only a life-altering threat of imprisonment is sufficient to make most of them comply.

Of course I am fully aware of many of the arguments which justify State coercion. However, proponents should concede that what they advocate are incredible threats of violence against the masses of innocent individals in order to carry out robbery.

Now I don't hold a prior assumption that robbery is never justified and that the use of violence is never justified, but extraordinary claims on behalf of the State's right to routinely carry out these actions should require some extraordinary evidence.

I read left-wing blogs because I hope that somebody will help reveal to me, if it exists, the sort of extraordinary evidence which would justify the incredible levels of violence, oppression and robbery carried out by governments.

Michael, I would obviously appreciate it if you could explain what sort of ethical/moral philosophy there is to back up State violence - in particular, why inequality justifies violence. If you want to take a strictly economic route rather than an ethical one that is fine by me.

Quote: "It's also worth noting that the wealthiest most competitive societies are those that have very low rates of poverty/inequality combined with progressive taxation and redistribution systems."

This is obviously not an argument that low rates of poverty and inequality (two separate concepts, by the way), combined with progressive taxation and redistribution systems, cause wealth and competitiveness, since correlation and causation are not the same.

But if you have such an economic argument for inequality, please share it with us.

Though I will definitely respond to you, it may be some weeks until I have the time. I am very, very busy so comments like these once in a while are about the limit of my commitment at this time. Thank you.

Michael

Jim - what sort of measures should we propose? That's the difficulty, there are no short-cuts. Wealth taxes have a chequered history and high income tax rates can increase incentives to avoidance/evasion. Taxes on property might have the perverse effect of harming people's ability to obtain shelter (e.g. a tax on second homes might lead to a withdrawal of rental places). None of this should deter us, just demand that we act with out eyes open. Here's a starter: phase out the PRSI exemption threshold on income and apply PRSI to all income such as capital gains and inheritances. PRSI is a solidarity levy so all income should share the burden (not just average PAYE and self-employed income). Another starter might be a 1% property tax on all residences above €1 million. The spectre of 'capital flowing out of the country' is always used to argue against capital taxation - but its rather hard to move a house. Also, reforming of certain tax subsidies (e.g. pension contributions, etc.) which are highly regressive. These measures won't rock the capitalist world but it will start to get some revenue for investment into modernising our economic base.

David, thanks for the considered comment. Like yourself, I'm not a political philosopher so I'm wary of straying into that ground. I will reflect on your points and get back on it but I would say that if you are using the 'state violence' argument, it might be helpful to distinguish between the different types of violence. I'm sure you would agree there is a world of difference between a state that is actively at war with its populace (e.g. North Korea, Sadam's Iraq, Zimbabwe, etc.) and the sanctions that apply to a tax cheat in a democratic society. And I fully take your point regarding causation in the arguments regarding inequality and competititveness. My response on that point would be to closely examine how such societies achieve that, and not just dismiss the argument for a higher-tax, higher-spend, higher service economy out of hand. Hopefully, you'll have more time in the future to continue contributing your comments.

conor mccabe

Excellent article.

jim

Thanks Michael, I agree that each element of fiscal policy needs to be dealt with individually (and cannot be simply lumped together in one concept), and agree with those you have highlighted. Could I ask if people feel that it is time to ease a little away from talking about distribution (while acknowledging its socialist and historical importance) and move towards wealth creation etc. The notion of a definitive amount of wealth to be shared can be perceived by the public through the current language. Maybe it is the 95:60 element we should concentrate on?

Michael

I fully agree with you, Jim, about the need to develop wealth-creation policies. Indeed, a large number of my posts deal with this topic. For too long it has been left to the Right and employers' groups to make all the running on wealth creation, while the Left has been content to dispute where the proceeds should be spent (e.g. health, education, social protection, etc.). However, I believe it is possible to marry the two concerns - inequality and wealth creation. This has been done in Nordic countries with considerable success. That's why I suggested that any moves towards 'splashing' the 5:40 group should be in the context of redistributing assets and wealth to ensure a greater more pluralist enterprise base. However, taking your point, I will attempt to address the wealth-creation issues with a little more concentration and focus.

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