Debt deal: anger and deceit has led the US into a billionaires’ coup by George Monbiot starkly highlights the ongoing bizarre nature of US politics and voting, mostly with regards to the latest political spat surrounding the debt bill.
There are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor.
Monibiot says there are exceptions to these rules, but they’re largely solid. In the US, like most countries, there’s absolutely no balance between rich and poor:
As the Nobel laureate Joseph Stiglitz points out, in the past 10 years the income of the top 1% has risen by 18%, while that of blue-collar male workers has fallen by 12%.
In fact, in the US, as in other countries, even the middle classes are now finding costs spiralling. Logically, then, the vast majority should demand over the short term to make the super-rich pay more tax, in order to rebalance society and not have everyone but billionaires screwed over. But in the US, the reverse happens, because the super-rich control the media and have a sneaky plan:
So the rich, in a nominal democracy, have a struggle on their hands. Somehow they must persuade the other 99% to vote against their own interests: to shrink the state, supporting spending cuts rather than tax rises. In the US they appear to be succeeding.
Thus, you have poor, jobless people and even the reasonably well off fighting tooth-and-nail against tax rises that wouldn’t affect them but that would potentially make their lives better, and demanding breaks for people who already have more money than they know what to do with. As Monbiot says, many people in the USA therefore
mobilise against their own welfare.
It’s a depressing state of affairs, but the UK’s getting sucked into this way of thinking. Rather than looking east (or north-east) at the genuine big societies of Scandinavia, where there’s a high-tax but also high-support and high quality of life agenda, we have people begging for taxes to be slashed, while the Tory-led government argues for a Big Society that means “deal with everything yourselves, but we won’t support you and, in some cases, we’ll demand you don’t do what you want to, if we decide you shouldn’t be doing it”. Marvellous.
I’m really not sure what the solution is. UK politics will in 2015 take a depressingly huge swing towards partisanship again, when the Liberal Democrats return a dozen or fewer seats. We’ll again see the Tories and Labour trading blows, trying to win an election by using policies to seduce a few important seats, probably in part by pledging to keep taxes low, even for people earning millions. (Scotland will be a partial exception, since the SNP will remain strong, although that party’s tax plans appear to be in almost constant disarray.)
I don’t want to see a return to the kind of Wilson-era supertax, which inspired George Harrison to write Taxman. I don’t think a 95% tax on the super-rich is sensible, and it would almost certainly be detrimental. You’d end up with a ton of tax exiles, more tax cheats, and a lack of willingness in the entrepreneurial space. But the Tories seem determined to scrap the 50% tax band (applied only to earnings over £150,000—about seven times the skewed national average), which doesn’t seem a particularly sensible move. And when you look at the compromises in the USA—slashing benefits for the poor, in order to ensure the rich don’t have to pay an extra penny in taxes—arguing for a low-tax society seems like precisely the opposite of what civilised nations should be doing.