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Archive for the ‘Tax’ Category

The State and the Citizen: Or, Why I am a Democratic Socialist, part 1.

Warning: Long, probably unoriginal and intensely self-indulgent post focused on ideological rambling to follow. Ignore if you (perhaps justifiably) suffer a tendency to hurl accusations of pomposity at such posts; it’ll be better for us all.

The State and the Citizen: Or, Why I am a Democratic Socialist, part 1.

We move from first basics; we assume, in general, that people seek what they define as happiness, as Bentham suggests. It’s the only definition of human activity beyond the soul-destroying vagaries of genetic struggle which accommodates the more perverse elements of human behaviour. And it creates few problems; who would deny they want to be happy in life?

This should, for the most part, mean people are left to their own devices; happiness is subjective, and can only be achieved for each individual by those individuals. Anyone who pursues their own happiness and does not infringe upon the attempts of others to do the same only does what seems natural. They have every right to do so.

There are, however, conflicts likely to arise; some citizens will attempt to derive their pleasure at the expense of others. Say, if an individual chooses to steal from another the fruit of their labour; thereby furthering their pleasure at the expense of another. A state is thus necessary, with its primary purpose to balance the interests of citizens. It must seek to create the greatest happiness for the greatest number - in essence, a utilitarian tool.

Clearly, by virtue of universal humanity, we can assume certain freedoms are essential for that pursuit of happiness. The state must seek to safeguard those freedoms if it wishes to create the greatest happiness for the greatest number; and the classical libertarian definition of freedom won’t do, as it allows individuals and corporations to assault individual freedom. The state must, of course, have clear boundaries and be bound by the rule of law - but we must accept an interventionist state is necessary for greater freedom.

Instead of the libertarian definition of freedom, we should consider a doctrine of applied freedom; where theoretical liberty characterised by absence of legal restraint is useless if held back by real-life circumstances. Clearly, people aren’t free if they’re hungry; they cannot focus on the pursuit of happiness as they need to find food first. People aren’t free if a thief breaks down their door and ransacks their home. People aren’t free if they’re freezing - or suffer extreme poverty and have no escape, or lack support in their old age, or are orphaned, or ignorant, or their planet is dying through the negligence of others. They cannot act independently, and so cannot move towards happiness.

The state must guarantee these essential needs and freedoms if it’s to create the greatest happiness for the greatest number. Taxation becomes necessary; those who can afford it should be taxed at a level which won’t seriously impede their ability to seek happiness to allow those who can’t to seek that same happiness. The money raised funds the apparatus of freedom; state education to ensure all have the chance to pursue happiness, a police force to protect that chance and pensions to allow those who can’t work the same chance.

But even that’s not enough. The power of organised capital and corporations can be as damaging to individual freedom and happiness as any level of state power. Consider the relationship between an unskilled worker and a multinational corporation; there are many of the former, and despite the absolute necessity of many of the roles they fill, their sheer numbers ensure that employers can, in effect, screw them over. They need to work to survive, and so will work for virtually any wage - yet their employers don’t need them in particular, so can pay them any wage, no matter how low. The workers can’t refuse that piddling wage, as they’ll lose their jobs; and without those jobs, they’ll find themselves thrown on the mercies of society. In short, a clear example of certain individuals grossly profiting and the expense of others. So, the state must intervene, ensuring all employers pay a minimum wage on which it is possible to survive.

Likewise, if a group of selfish individuals control an essential and universal service, they can wreak havoc on the lives and livelihoods of others; witness the cruel absurdities of healthcare in the USA. Those who control an industry can take control, jack up the prices and so the profits - and if people can’t afford the service, they suffer. Universally necessary services in private hands are conducted to the benefit of those private hands - not the majority who desperately need them.

So, the state must take any essential services for which there is a universal human need, and ensure they’re universally accessible. You cannot be truly free if you’re sick; so a universally accessible national health services is necessary. You cannot be truly free if you’re freezing; so mass energy generation should be nationalised and energy - or the means of generating it at a household level - made accessible to all. This can take place on a partial basis too, if it’s all that’s needed. You can’t be free if you’re homeless but want a roof - so the state should build and control some housing. You can’t be free if you can’t reach your place of work as you don’t own private transport - so the state needs to provide some level of nationalised transport. And so on. The objective is to prevent one group of individuals gaining so much power over others as to make those others’ existence a misery; and the means of delivering this is placing the means by which life might be made into a misery into the hands of a neutral entity which exists for the benefit of all.

To ensure those services are rendered to the benefit of all, those who control the state must be rigorously accountable - and subject to regular elections. The power of the electorate to demolish any government that doesn’t act in the interests of the greatest number ensures that governments will act in the popular interest. Here, we see the superiority of nationalised essential services over the same services when they exist in private hands; democratic elections ensure those services are administered to the benefit of citizens, rather than the owners as they are when privatised.

The state thus exists to benefits citizens - and only to benefit citizens. Regular elections should ensure this; while a codified constitution setting out the fundamental rights of citizens and the barriers of government ensure the same in between elections. If, though, the state breaks that constitution, and so assaults the population’s basic liberty, then citizens have a right to legal redress; the state is as bound by the constitution as citizens are by the rule of law, and so must be answerable. If the state prevents that legal redress from occurring, it ceases entirely to act in the interests of citizens, and so becomes a Tyranny. If a state descends into Tyranny and sheds the essential manacles of democracy, then citizens in turn are no longer obliged to obey that state’s laws.  Why should they sacrifice their happiness and liberty if they receive neither security nor the happiness of others in return? They shouldn’t. They have a right to rebel, throwing off the chains of the state which betrayed them and reclaiming that happiness. This right to insurrection must be written in the constitution; for only then will potential tyrants remember their peril.

Funny, those pensioners don’t look like blind cyclists…

Andrew Gilligan spent yesterday gloating. Take a look at this:

When, next month, the full report comes out, and the GLA’s new cost-cutting chief executive, Tim Parker, starts work, we will see that second essential revolutionary moment: the part when selected victims are led out to the firing squad. It will be politically correct London’s equivalent of the credit crunch and, with any luck, it will be goodbye to the groundbreaking cycling-for-the-blind initiatives, farewell to the gay Bengali workplace sustainability forums.

Very pleasant, Mr. GilliJohn (Littlegan?). But it’s probably not going to be just the “gay Bengali workplace sustainability forums,” that go, is it? Your friend BoJo’s been employing some pathological service cutters who’ll not just slash, but slash, burn, pillage and put their wages up.

Take, for example, Ian Clement, former head of Bexley Council and now Boris’ Deputy Mayor for Local Government. The Tory Troll’s highlighted this morning that he wasn’t a lovely, fluffy builder of communities but a ruthless tax-cutter who slashed essential services for housebound pensioners.

But the cuts weren’t limited to those the Troll mentions. In the local elections, the Conservatives in Bexley promised to deliver consistently below-inflation tax increases, which this year meant less than 3%. They were flagged for this at the time: with a shaky economy, such an iron promise was risky. Clement and his council were accused of putting common sense and decent services on the line to win the election.

And they did just that. The 2008 Budget made massive cuts across the borough amounting to £6.071 million. And in those cuts went not just Meals on Wheels for the housebound, but elements of grants for school uniforms, children’s social care, Green Flags for public spaces, road safety schemes, decent service in libraries, and jobs. Fees for most council services went up at the same time: libraries, sports centres, rubbish tips, car-parks, planning applications and more.

This from the News Shopper:

Education and youth services hope to save nearly £1m on next year’s spending.

This includes £50,000 on discretionary grants to help fund things such as schools trips and school uniforms and £53,000 by getting better value when finding placements for children who need social care.

There will also be more than £200,000 savings from reducing staff in areas such as children’s social care and safeguarding.

Emphasis mine. Clement’s council presumably feels children’s social care and school uniforms are non-essential services that could be cut. And I thought it was the Tory papers that most often screamed “Think of the children!”…

They need to, though, looking at the News Shopper report:

But it could make £207,000 by insisting schools pay the full price for any council supplied services.

Of course, that’s not cutting the overall cost of education at all. It’s shifting that cost from the councils, back onto those schools. Those schools which have limited budgets which remain at a fairly similar level while the cost of council services goes up, meaning the schools have less money to spend elsewhere. And less money to spend elsewhere potentially means falling educational standards…

But, of course, that’s not the council’s fault, as the schools have responsibility over their own spending. Of course.

Elsewhere:

Community forums will lose their grants and will have to bid with others for cash.

The logical conclusion to this is that some Community Forums will disappear. They’ll lose out in the bidding, possibly narrowly - and so lose their funding. And so their voice.

Councillor Katie Perrior, community affairs cabinet member, said some forums were “not good enough” and if the council wanted to consult people on an issue, it would use the best group for the job.

Because, of course, the best way to help a group improve is to take away the money it’d use to improve. Chyeah…

And on the environment:

“There will be no more Green Flags in public parks and open spaces, which will also face reduced maintenance.

Weed killing on pavements and roads will be cut and funding for Operation Cubit, which removes abandoned cars, will be cut.

Also being reduced are the budgets for road safety and traffic schemes.”

Parks, road safety, even weed-killing goes. This probably tells us something about Clement’s tax-burning abilities: his team will go through every line of a budget and cut out anything the council won’t be blamed for. These are often still important services - who wants weeds growing on their roads? But the council won’t take the direct blame for it, so it loses money…

All because of a reckless election promise, you see.

Sport and leisure provision is being cut, with less cash for new books and the loss of late-night opening at six libraries.

The grant for Bexley Arts Council is being cut and subsidies to sports clubs reduced.

They’re trying to get the kids off the streets, you see…

Five handitills in libraries for people to pay their bills are being shut and charges will rise for virtually everything from sports facilities, social care, the BELL emergency system, parking and burials to planning applications.

Clement and his council claimed this was to increase choice: not everyone uses the services, not everyone should have to pay for all of it. But that’s only okay for those who could afford greater council tax rises in the first place, isn’t it? Those who can less afford council tax can presumably less afford high charges for public services - and so can’t afford the services. The Council shut out the poorer to put a few pounds back into the wallets of those who could live without that money.

Was it all cuts, doom and gloom, though? No, of course not! Spending went up in certain areas. Look here:

A BID by Labour councillors to stop a rise in councillors’ allowances backdated to April last year was dismissed by Tories as “a political game” at last week’s council meeting.

Labour leader Councillor Chris Ball proposed the £20,800 back pay would equal the grants withdrawn from community forums.

He suggested the payments be frozen and future payments used for something else.

But corporate services cabinet member Councillor Colin Campbell said Bexley was already the meanest of London councils for allowances.

He said the increase was “modest” and should be paid.

So - cuts all round, except for the councillors themselves. Need I comment?

Oh, and would it come as a surprise that the council sold off land that could have been used for social housing or other equally useful purposes - to redevelop the council offices?

And as for that promise to keep council tax rises under 3%; I believe the actual increase was 3.5%. Presumably they couldn’t find enough pensioners to kick.

Gilligan professes to hope that Boris’ regime won’t “slash and burn” services. He hopes they’ll fund them instead. Judging by the past behaviour of his employees, that doesn’t seem likely. Unless cutting services to the housebound no longer counts at attacking the vulnerable or slash and burn tactics.

EDIT: Actually, the letters here say this so much better.

Green Taxes…and spending.

Rumbold makes half of a fair point over at Pickled Politics. To whit:

Let us assume for the moment that green taxes are effective, in that they will lead to people being in a more environmentally-friendly manner. These taxes are thus desirable, so long as the overall tax burden does not rise. There is a simple enough way to convince people that green taxes are not just another means by which the government raises revenue; every pound raised by green taxes should be matched in cuts on income tax, by raising the threshold at which people start to pay income tax. Moreover, the tax on oil should be reclassified, so that 25% of the tax counts as a green tax. This 25% would then be spent on the basic state pension.

He’s right; people will become suspicious of “green” taxes when they’re self-evidently being used as stealth taxes. Where I disagree is on what to do with the money.

Environmental taxes should change behaviour. However, they can’t do that simply by disincentivising this behaviour: they need to provide alternatives. Green life needs to become more attractive economically than whatever took place before. It’s possibly possible (oops…) to do this entirely through the tax system, simply making environmentally damaging behaviour so expensive as to be unviable.

But that’s hardly fair, as the alternative could remain expensive. Here, rising fuel costs make cars less and less attractive to drivers - but if public transport stays as stupidly expensive as it is, then people will stick with them. So the state needs to provide those alternatives, or face a cynical public on green taxes and inaction on green issues.

The answer is to use the money from green taxes for green purposes. The millions from fuel duty should subsidise public transport and so make it easier for people to abandon their cars. Public scepticism would fall as everyone felt the benefits. And, most importantly of all, the issues which the taxes existed for would be addressed - which isn’t certain with matching tax cuts elsewhere.

Rumbold rightly argues that green taxes will lose public support if they’re actually stealth taxes. But they won’t work if the state doesn’t move beyond intervention. People will grumble about the green tax, gratefully take the income tax cut - and move on. Environmental issues remain unchallenged. In the case of rising fuel duties, many might well use the money saved on income tax to pay for exactly the same amount of newly-expensive fuel as before. Nothing would change.

That’s why green government needs green spending just as much as it needs green taxes. It’s not just about making certain behaviour unattractive. It’s about making the alternatives attractive as well. People will have no reason to change beyond what they hear in the news, otherwise - and they’ve been hearing that for 30 years. The most logical way of making that change is to use the money from making the former behaviour unattractive to make the other behaviour attractive. Surely?

If there’s any money over once that change happens, then great - bring on the tax cuts. But until then, it’s tax and spend we need, not tax and balance.

Optimum Tax Levels

Now here’s an interesting theory.  I can see absolutely no evidence that the “Laffer Curve” should be drawn as it is, but the most basic aspects of the theory make sense.