Wealth, Taxes and Responsible Societies

Sam Harris wrote an article on his blog called ‘How Rich is Too Rich’ (17 August, 2011) in which he makes the assertion that many Americans see taxation as intrinsically evil and that Conservatives view taxation as a species of theft. Harris has his tongue in his cheek when he says that tax ‘appears to be a form of theft that we require, given how selfish and short sighted we are’. It is an interesting article and mentions many commonly argued beliefs that I recognise.

Sam Harris from his web site

He points out that many wealthy people have not become wealthy by creating value for others, although quite obviously that can be a spin off from wealth creating activities. No capitalist starts off to make jobs for others. It is about making money, unless it is a spin off from doing what you have to do as in Gates’ and Buffet’s cases. And they are indeed different from the average capitalist. Corporate tax in America is about the same or more than other industrial nations. Its marginal rates favour the individually wealthy disproportionately.

In any case, jobs spin-offs are increasingly diminished as technological advancements reduce the need for human labour. Harris imagines a scenario where technology has made human labour all but redundant. It is a scenario that many have contemplated. The resultant ideas for the future make some good reading.

Harris’s main thrust is that of wealth inequality or lack of wealth distribution, with no reason to think that the gap is not widening still further. His thesis is that the rich people and the ultra-wealthy members of American society do not pull their weight in terms of tax revenues as a percentage of GDP and there are not many Bill Gates and Warren Buffetts around. Harris sees that America’s current and continuing financial woes may be ameliorated by a greater contribution by the very wealthy. He is possibly right. It won’t happen though.

I basically agree with him and have seen the obscene wealth that was splashed across the newspapers as the banks begged for bailout monies while their CEOs pocketed millions for life-time pensions.

Harris has written this piece at an at an interesting time. The so-called riots in England look more and more like an uprising of the (no jobs) working class against the wealthy. I have already blogged about that here.

I commented on Harris’s article on a friend’s facebook page:

Harris says: “But it appears to be a form of theft that we require, given how selfish and short sighted most of us are.”

Harris is talking about taxes for public infrastructure and the proportion of taxation affordable by different wealth levels of the populace. Lifting marginal rates of taxation to account for greater affordability by the rich does nothing to harm wealth creation. It does, or rather, can increase travel, education and health care infrastructure so that a larger proportion of the not-wealthy and the downright poverty-stricken members of the society can live in the knowledge that they won’t arbitrarily be left out in the cold.

Harris also points out that humans are as yet unable to adopt libertarianism because of our inability to pursue a proper form of enlightened self-interest, ie one that does include the ‘other’, does have concern for those disadvantaged members of society and their well being, does consider that everyone has a value and part of [wellbeing] it can be met by more publicly collected taxes to fund safety nets, roads, schools and hospitals.

A society that is moving toward sophisticated civilisation does take account of its whole society. I think Harris is utterly cognisant of that and he is proposing a way to advance it. I can’t agree with his ‘economics’ correspondents who trot out the tired old ‘technology’ will make us free AND fully employed. It won’t, it can’t, there are just too many of us for full employment to ever become a current concept again.”

Harris was slated in the comments to his article and I had some replies related to my wee comment. All the comments had to do with economic criteria, apart from the disgustingly stupid and vicious ones that Harris received. Now obviously (well, it is to me) without tax contributions to GDP, mainly corporate (in industrialised countries) and mainly individual (in service oriented countries), without tax collections sitting at reasonable levels, public infrastructure cannot grow and/or be maintained adequately as is needed.

America contributes about 27% taxes to GDP compared with Sweden contributing about 48%, the UK about 39% and Australia about 31%. These figures are part of 2010 figures from the Heritage Foundation, an American economic think tank.

But this is a bigger discussion than a purely economic one. A truly modern, humanist society that desires to keep its community in a state of well being so far as that society considers its social responsibilities to its community has to organise universal services.

These do include transport infrastructure, rail and transit services, communications infrastructure, energy supply and distribution networks, state funded secular education and universal health care.

In countries like America and Australia – big countries – transport, communications and energy infrastructure are massive undertakings and need constant maintenance.

Historically we all lived in smallish, tribal-ish groups and pretty much stayed put and made our living with each other while seeing outside groups as a threat. Listen, watch and read J (Andy) Thomson on in and out groups and primate behaviour. In any case, our concern for each other didn’t extend beyond the tree line.

Things moved on, power bases evolved and human greed started to show itself in a far different fashion. Wealth meant power and power meant control and more and more. So the story goes.

The industrial revolution exacerbated that. Tribes went global and that has been the problem ever since. We moved into centres that became cities without having ever been designed to accommodate urban living. In fact, there are those who think that we have never learned to live properly urbanised lives. Necessary infrastructure is an afterthought, ghettoes accumulate, industrial and urban pollution grows in leaps and bounds, our natural resources are mined, dug and siphoned out with the concomitant residual dross. I mean the list just goes on and on.

People became wealthy, often by being in the right place at the right time and with enough financial and other resources to hit the top Forbes 100. The cities became overcrowded and no one knew each other so it was inevitable that a dog eat dog attitude prevailed. Who cares who the ‘other’ is; I will look after my own and if the ‘other’ looks different then keep him further at bay.

It is this that we have to combat if we are to survive the coming century. We have been living on a consumer/capitalist model for so long now we are addicted. All our rhetoric is geared around maintaining this model. It will not take us through this century and we have to change or die.

My critic pointed to charities existing thus proving man’s concern for his fellow man. My answer is that charities ought not to have to exist because the society has a responsibility to its community. In any case, charities inevitably have a hidden agenda – often religious in nature – and should be discouraged rather than relied upon to supply a set of community needs more rightly laid at the door of the society itself. Charities, in any case, are usually funded by the ordinary citizen rather than the wealthy.

Another criticism is that as there come to be more of us, there will be more unfulfilled desires which can be served by people working. This sort of statement shows up a fundamental fallacy that there will always be enough to fulfil these burgeoning desires and there will always be those willing to work to achieve those desires.

Creating wealth from technology is a two edged sword and the other blade is the sharper – it trims jobs requiring human labour. Jobs will diminish – that is a certainty. Doesn’t matter how many of us there are.

This is a finite planet with China and India not even reaching the living standard to which they aspire. And they want all the trappings and more. When they do, it is estimated we will need about 3½ earth sized planets to accommodate these desires as (if) they become fulfilled.

We have to change our way of viewing our planet and ourselves, pull back on those desires so that those enjoying life at the moment can continue to do so in a far more equitable climate than the one we currently have.


3 comments on “Wealth, Taxes and Responsible Societies

  1. Anonymous says:

    I tried to leave the short comment “Good post” but it didn’t appear, it seems that comments need to be at least three words long. Anyway – Good post!

    • Veronique says:

      I am not sure why it takes more than two words to register as a comment. I will try to suss this out. In any case, thank you. You may well be on the smaller side of comment opinions. A lot of people disagree with this stance and prefer solely dry economics.

      • Anonymous says:

        “A lot of people disagree with this stance..”

        Yes, and a lot of people can’t see past their own greed and self-interest; the short-sighted FYJIAR attitude.

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