Tax cuts favour wealthier people. And the rich spend less of their tax cuts than the poor.
Tax cuts favour wealthier people. And the rich spend less of their tax cuts than the poor.
Opinion by David Cormack
Co-founder of communications and PR firm, Draper Cormack Group. He has worked for the Labour Party, the Green Party and has interned for Bill English.
COMMENT:
Tax cuts suck. That's not just my ideological belief. There are actually studies that back this up. Obviously tax cuts are good for some people. Just not many.
In the United States the non-partisan Congressional Research Service did an analysis of Donald Trump's tax cuts and found that the$1.5 trillion overhaul didn't result in wage growth. It didn't result in a surge of investment. In fact it didn't come remotely close to even paying for itself.
That's the story we're spun whenever tax cuts are floated. That having more money in our back pocket will result in more spending and investment, which will mean more jobs and hey presto! - we're all millionaires sailing yachts and drinking cocktails.
Except it never works like that. Because tax cuts favour wealthier people. And the rich spend less of their tax cuts than the poor. Because the poor need to spend just to survive.
Especially in a world with tax cuts. Because to necessitate tax cuts you need to cut spending and it's the poor who rely more on social spending than the rich. Double the benefit for the rich!
So in a situation where there is already inequality, tax cuts just exacerbate that inequality.
Tax cuts are great for a small portion of society. Tax cuts are those things that sound good and logical when you hear them, and they are, for the above mentioned yacht riding, cocktail drinking part of society, but for the rest of us the benefits are just not supported by any evidence.
It's the same with tough on crime policies. In a country like ours that was exploited off the back of colonisation, and where that colonisation still reverberates through our Māori communities, any tough on crime policies will have an inherent racist bias. This is because colonisation has structurally oppressed Māori to the point where many are criminalised.
The police then enforce these policies that are borne out of colonialism and so the racist system continues unabated.
That, and so much research has been done to show that tough on crime policies just do not work. In fact they do the opposite. They make minor criminals into worse criminals.
Research out of the United States found that 60 per cent of those incarcerated had at least one mental health problem, 80 per cent had a substance use disorder and between 50 and 60 per cent had at least one traumatic brain injury.
In fact the biggest driver of crime is poverty. And funnily enough the biggest cause of poverty is just not having enough goddamn money. So you'd think that tax cuts would help solve poverty. But again they don't, because the amount that those in poverty benefit from tax cuts is minimal. In fact they're worse off.
Tough on crime isn't about making communities safer, it's really about hiding away people that need help, or furthering a racist agenda. It's largely an enforcement of white supremacy. That's not a society I want to live in.
It does make those tax cuts more appealing though to a certain segment of society. Instead of spending money on people who need help, on those who rely on the state to help them get through problems not of their own making, we just chuck them in prison and give those tax cuts to the rich.
It's why a universal basic income is so appealing to many people. It's a sort of reverse tax cut. If you pay $1000 a month to someone who is earning $200,000 a year, it's not a big deal. But if you pay someone $1000 a month who earns $35,000 a year, it's going to have a huge impact.
Any policy that is presented to us that has benefits that start at the top of society is going to overwhelmingly benefit the top of society. It's hardly going to benefit the people who need the help. In fact in a lot of cases it will harm them.
Cold, damp houses create massive health problems.
That's why when you hear of policies like removing housing standards for rentals to encourage more people to become landlords to provide more properties to rent, it's rubbish. What you're actually being sold is a policy that saves landlords money while screwing over those who are tenants.
Because cold, damp houses create massive health problems. And massive health problems reduce our ability to partake properly in society. But if it saves landlords from having to spend money on heating and insulation then that's just fine.
We need political parties that are brave enough to go against populist policies. We need political parties who deliver thoughtful policies grounded in evidence. We need political parties that are in it for those in need. We need political parties to stand up against practices that just benefit a small well-off group.
Especially when those small groups are able to disproportionately sway our political process with donations far greater than the poor would ever get in a tax cut.
