Monday, March 15, 2010

Aoteaeroa/NZ: Tax Cuts – Out with National’s knives


Taxing the poor and Bene bashing


We learn that over 34 thousand beneficiaries are not getting the ‘Temporary Additional Support’ they are entitled to under current law. http://norightturn.blogspot.com/2010/02/winz-rips-off-its-clients.html

WINZ is being run to take away benefits not provide entitlements. This is part of the NACTMP government’s welfare cuts to cut social spending as a drain on bosses taxes and profits, and the privatisation of welfare provision to Maori where so-called Not For Profit jails and social services will further cut social spending. The reason for this is that NZ is now fully part of the global capitalist economy and the cost of labor must not be higher than other low wage countries. If wages (including the social payments from the state) are not cut bosses will not invest in NZ and jobs will be lost, so they say.

But there are some social provisions such as public health and education where state funding cannot be replaced completely or overnight by the private sector. National Standards will lead to privatisation of education and similarly new private health clinics will do the same in health. But in the transition taxes will still be needed to pay for them and to subsidise the private sector. So the NACTMP government is going to make the workers pay out of their taxes instead of the bosses. That is the point of raising GST which is a 2.5% increase in the cost of living for all workers because they have to spend all of their income to live, compared to a much smaller share of the income of the rich who can save, invest to make profits, speculate in land and other commodities and make capital gains which this NACTMP will not tax in its budget.

But this is a bosses way of looking at “who pays”. It assumes that workers, bosses and landlords, each get a share of the national income, in the form of wages, profits and rents, and that politics is all about who gets what share, and is it a fair share? This inevitably comes down to taxes as these are the main way that incomes are redistributed. ACT and dry Nationals support a low flat tax and one law for all so we are all treated fairly as equals. Wet Nationals, Labour and the Maori Party argue that we are not all equals as some start life richer than others. Therefore taxing the rich at some higher level is fair to create equal opportunity. When the right ruled in the 1980s and 1990s they fell short of imposing a flat tax, but they won acceptance from Labour that equal opportunity was not a right but a responsibility based on work i.e. workfare.

Revolutionaries reject all these arguments. The working class creates the wealth so profits and rents are a deduction from the value of its total labour. Therefore the ACT position covers up the fact that profits and rents are appropriated from workers. Wages reflect part of the value of labour retained by workers to enable them work and prepare their children to work. State welfare is public provision of a social wage to subsidies the wage. It doesn’t matter how the distribution of taxes fall, they are all paid for out of the expropriated value of the working class. Therefore taxing the rich obscures the fact that these taxes are already paid for by workers. We oppose making workers pay higher taxes and we oppose forcing them to work for welfare. The answer is not to tax the rich but to expropriate their profits and their property which is nothing but the accumulated stolen dead labour of past generations of workers.

That’s why revolutionaries do not say “tax the rich” but rather “expropriate the expropriators”.

From Class Struggle 87 Jan-Feb 2010
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