So Julia Gillard has floated the idea of a temporary flood levy – an income tax on workers – to pay for the cost of reconstruction after the floods across Australia.
The Labor Government wants us to pay for the damage the bosses’ system has inflicted on us. This damage is not just from bad planning in the name of profit; it is also caused by the extreme weather events their climate change is creating and the retribution it is wreaking on workers and others.
Why not tax the almost 50 percent of big business who pay no income tax?
This is the Government which watered down its resource super profits tax to cover just a few minerals and far fewer companies and lost billions in revenue as a consequence. The latest non-government estimates put the lost revenue from the back down at almost $20 billion – the difference between a possible $25 billion under the Resource Super Profits Tax and $5 billion under the Minerals Resource Rent Tax.
But why limit a rent tax to minerals? Super profits arise because of monopoly or oligopoly. Why not tax the super profits of the banks, the supermarkets, the insurance companies, the utilities?
It is money for jam. Taxing super profits doesn’t impact on investment decisions or jobs. Because it is an above average return the investment will occur, either by those already undertaking in the field or by others wanting the extra return.
As that well known revolutionary economist and head of Treasury Ken Henry pointed out many of these super profits are location specific. They can’t flee offshore.
Of course these companies will try to increase prices to recoup the profit loss. Stop them if the impact is going to be to reduce our living standards. Impose price controls on them and increase our wages to compensate.
Labor could tax the super profits of big business to pay for the costs of the flood reconstruction, with plenty left over for better public health, education and transport. Why do they want to tax us instead?
Because Labor’s priority is profit, not people.
