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Tax Cuts: The Great Conservative Scam

Conservatives have run on an economic message of tax cuts for a long time. Keep more of your hard-earned money, they say. I would like to discuss two issues around the policy of tax cuts and then look at their implications. Given what I am going to say about tax cuts in this piece, I believe a disclaimer is in order. Please do not take this to mean that I oppose all tax cuts. I simply believe that they should be targeted and done in a fiscally responsible way. I insert this disclaimer both to provide context for what follows, and to avoid potential charges of being a conspiracy theorist.

Part One: The Targets

The first is the fact that the tax cuts rarely, if ever, apply to the peasants. The tax cuts offered by conservatives are very often for the rich and corporations. This is, simply put, because conservatives believe (or are paid to believe) the great lie that is ‘trickle down economics’. This policy is the con that more money in the hands of the rich will result in job creation.

The fact that the last forty years of reality has shown that this does not work means that the decision to keep going back to this well is ideologically driven and not about actually helping people. Two examples will illustrate the point. First is Trump’s tax bill, in which 83% of the benefits went to the top 1%. Second is the Australian Liberal Party’s attempt to pass tens of billions of dollars in corporate tax cuts. I do not believe it is conspiratorial to suggest that conservatives seek to create a feudal society of lords and serfs.

Part Two: The Hidden Agenda

The second aspect of tax cuts as an ongoing economic policy is what I see as the truly sinister element. Tax cuts as a policy plays on the natural human impulse to benefit from your work. Cynically put, it plays on human greed, something that is never in short supply. However, what the wider society is seemingly too blind to see is that tax cuts, while benefiting the (rich) individual, deprives the government of revenue. This is what American Republicans in the 1990s called ‘starving the beast’. You deprive the government of money so it is unable to provide those pesky unprofitable services for the peasants. This is an example of what Noam Chomsky referred to as ‘the standard technique of privitisation: defund, make sure things don’t work, people get angry, you hand it over to private capital’.

The argument here is that tax cuts, when done irresponsibly, can be (and indeed have been) used by conservatives to justify massive cuts to government services. We cannot afford this, they screech. But you will notice that they are hypocrites on this issue. The services that they cut are only ever things that matter to the wider society, including the ABC (NPR in America), medicare (pick your country), the NDIS and other things that help the disadvantaged. There is never any talk of cutting defence (again, pick your country), or politicians’ pay, or corporate subsidies. There is seemingly unlimited money for these things, but the government seemingly has no money when it comes to services for the peasant underclass for which they have already paid. Spare me.

Political Implications

This playing on human greed, intentional or otherwise, allows conservatives to present themselves as an ally to the everyman. It is, of course, a lie, but it serves as effective propaganda for Sky so-called news to disseminate to the masses. They believe this allows them to portray the left, who often want to actually pay for their policies, as ‘tax and spend’ radicals. Indeed, the very notion of tax, and especially tax on the rich, has been demonised so effectively that the idea of government services is something to be decried. The fact that the left (or even the centre-right) actually wants to pay for their government policies, which requires taxation, is bad by definition (or, if you prefer, because reasons).

Consider the recent example of the Liberal Party criticising ‘Bill Shorten’s $200B is new taxes’. This number, like so much propaganda, lacks vital context. Indeed, a google search for ‘Bill Shorten tax’ brings up as the initial result a website devoted to ‘Labor’s (insert issue here) Tax’. In Liberal propaganda then, Labor is associated with tax, and tax bad, ergo Labor bad. This is hardly a recent invention: recall the ‘carbon tax’ and ‘mining tax’ against which the LNP moved so vociferously. Essentially, for the conservatives, tax is bad because it funds government services. However, this is only a problem when it funds government services they do not like. See how consistent their ideology is?

Conclusion 

We need to set this anti-tax nonsense aside. Tax is how government pays for itself. Indeed, it is necessary to fund all the crap that conservatives love. On a wider scale, tax is citizens contributing financially to their society. This in turn pays for the government services those citizens enjoy. This is Rousseau’s social contract. In the modern world, this means that everyone contributes to the cost of, and enjoys, health, education, infrastructure, transportation and other essential services. But that’s communism according to conservatives. My response to that is if you hate socialism so much, resign from office immediately and claim not one penny of that big, fat pension. As I have said previously, conservatives do not hate socialism per se, they hate certain recipients.

The anti-tax propaganda needs to go and we need to, as the line goes, be a society, not just an economy.

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15 comments

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  1. Bronte ALLAN

    Very well put Dr Jones! The trouble with ALL these bloody COALition liars is that they seemingly really believe what they spout to all Australians is the only “truth” & especially there is nothing Labor will do to alter these “facts” (sic). They somehow “conveniently” forget that the supposed “really bad debt” that Labor left when they were kicked out has now doubled! But nowhere will this mob of lying. flat earth, climate change denying, obscenely over-paid, so-called “politicians” ever admit that this debt has now more than doubled since they came to power! After all, this latest crop of of lies disguised as the budget only talks about the billions they will have saved to continue on their merry way when (IF!) they were to be re-elected! Lying bastards the lot of them!

  2. Alcibiades

    Such clarity, a truly articulate appraisal of the situation.

    However, may one respectfully suggest it is not truly an ideology of the conservatives, but an entirely faux ‘constructed’ ideology for the gullible & unknowing among the conservatives & other devotees of neoliberalism. And as a sop/crutch for the few who have a conscience in order to be able to rationalise the consequences of their actions.

    Suggest the Donors & owners of the neoliberal ‘partees’, major or minor, do not give one single damn about politics or ideology of any kind, even neoliberalism. The 1%, with devoted assistance from their minions of the 10%, already own more than half the worlds wealth.

    Yet it is never enough. Never. The 1% want it all and even more. ‘Tis a mental illness, a pathology, that is driving societies & Terra itself to an inevitable reckoning if unchecked. Obsessed.

    Facts, evidence, consequences for ‘others’, lives, even their own nations/countrymen of which they are now supra-non-national citizens, matter not. Only the never ending systemic societal transfer and limitless accumulation of their wealth.

    To the 1%, ideology of any kind is for the ‘work units’, patsies & bought & paid for drones & politicians of all stripes.

    Greed is Good. Mammon is Dog. Enough is never enough.

    They were recently culled for a while via Madame guillotine, re-emerged globally, yet … squeeze too hard for too long, and a new Madame may emerge.

    Starving ? Let them eat crushed avocado.

    PS Fixed enforced rates of unemployment/underemployment is a mere policy of active choice, for exploitation. Just as for taxes, 100% full employment is practicable by the mere stroke of a pen.

  3. David1

    The debate that must be, excellent appraisal Tim it is off to Twitter. Incidentally I see the Twitter link is no longer available, no matter easy done.

  4. Patagonian

    The Lieberals have always practiced ‘magic pudding’ economics.

  5. helvityni

    Countries where people happily pay their taxes can afford to give the population what they want, good ( free of payments) schools/ universities, good age-care, healthcare, house the homeless etc. etc….

    Those countries are not obsessed with border protection; they believe in diplomacy and neutrality….They are not jumping to other countries’ battles at every turn…

    “‘ The anti-tax propaganda needs to go and we need to, as the line goes, be a society, not just an economy.”
    Spot on, well said Tim Jones..

  6. Harry

    I very much agree with the aim, ie to fund spending on public services and programs that allow even the poorest of us to live a decent life, (and much more) but disagree with the author about the role of taxes. I don’t think it’s just academic either: how we view taxes has crucial implication for a fair and just society, ie one that balances public well being rather than public squalor.

    Let’s be clear, State and Local governments must fund their expenditure from the taxes and charges it levies but the same role for tax does NOT apply to our federal government. It creates money by the act of spending and does need to levy taxes on income, goods and services, capital gains etc. It need not even borrow to cover any “shortfall” between the taxes it levies and its spending. Of course, the dominant paradigm is quite the opposite but It masks the reality.

    Taxes do have important functions though. If overall spending, whether by all levels of government, business or you and I exceeds or gets close to the productive capacity of the economy there will be undesirable price rises. Taxes function to destroy (there’s no other word for it) to some ability to spend so that the government can spend without significant inflation.

    That’s why we need progressive taxation, so that those who have the most income have relatively more of their income destroyed than those who have lower incomes. This also reduces the tendency towards high levels of inequality which is bad for social cohesion.

  7. Matters Not

    Re:

    On a wider scale, tax is citizens contributing financially to their society.

    Only partially true – and promotes the notion that tax-paying and citizenship go hand in glove. Fact is, one can be a citizen (entitled to vote) but not a taxpayer. And one can be a taxpayer (the biggest taxpayers are corporations) but not a citizen and therefore not entitled to vote.

    In the United States, that fundamental principle is undermined by the Supreme Court via decisions re Super PACs – which allows ‘money’ to buy politicians and elections. And they do.

    Time we moved our thinking from the concrete to the abstract. But that’s unlikely.

  8. win jeavons

    GST means EVERYBODY is a taxpayer, even babies and pets!

  9. Matters Not

    Re:

    GST means EVERYBODY is a taxpayer, even babies and pets!

    Indeed! So why do we even talk about it (taxpaying) re our role, rights and responsibilities as voting citizens. Having paid our taxes and therefore met our legal obligations, the money in question is no longer ours. Thus we have absolutely no control over what the government spends it on (or doesn’t), we can’t get it back, etc because it’s no longer ours. Yet some take comfort in the false belief that the government is spending (what was once) our money. Hilarious.

    But people believe what they want to believe.

  10. Jon Chesterson

    I posted this article to FB and got an FB message saying no-one else could see it because it was in breach of FB community standards. Has anyone experienced this? It concerns me because there is nothing in this article that could possibly breach Facebook’s community standards. Either it is a scam or our government is forcing Facebook to restrict any political debate or criticism it doesn’t like on Social Media. If that is the case we, the people of Australia are at war with our own government over free speech, censoring our voice, government over reach and abuse of power. Conversely there are numerous News Corp articles that would never pass FB community standards.

    If you cannot see this article on my page I would like you to let me know, thanks – https://www.facebook.com/jon.chesterson

  11. Kaye Lee

    Jon,

    It says page unavailable

  12. David1

    No luck Jon for me…

    This page isn’t available
    The link you followed may be broken, or the page may have been removed.
    Go back to the previous page · Go to News Feed · Visit our Help Centre

  13. Alcibiades

    Jon Chesterson,

    “This page isn’t available
    The link you followed may be broken, or the page may have been removed.”

    here too. 🙁

  14. Neil Hogan

    The LNP Electoral Strategy: Tie Labor to Tax.

    That’s good because it will highlight all of the LNP inadequacies as it is tax that enables a government to provide the following…

    All Health Services, a Quality Education System, Research & Development, Science & Innovation, Fair Pensions & Welfare, a Healthy NDIS System & a Productive TAFE System for Trade & Industry Apprenticeships, in fact everything this country needs to be a happy & decent society to live in…

    Depending on how a government collects & deploys those taxes is a real measure of just how good all those things are & anyone with half a mind would know that all of those things would be much better if we had a government that worked for the common good for every Australian instead of just increasing the wealth for the top end of town, the world’s richest moguls & multinational corporations.

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