Government across the world should understand that whimsical policies will not be accepted by the people. The 2008 recession and post that one lesson which has been learned by any generation of any age is that how and where the crisis is happening and which policies are governing the same. Reforms do not need sacrifices. This is the wrong myth developed by the capitalist mind. Many strategies can be developed to create new growth momentum provided complex trade deals and economic ties are cut out. The major concern for the society across the globe is the learning and the message being given post-2008 recession about providing a proper living standard.

You create austerity policies and expect people to suffer. You don’t cut down on expenses and you increase taxes and expect people to accept are now old traditions. People are now more connected and more knowledgeable than what it was in the last 10 or 15 years. Smartphone and technology have changed the landscape of connectivity. I am sitting in India is supporting those who have come up on the street against the France policy of increasing taxes on fuel.

 The world is yet to come out of the 2008 crisis although cooked economic numbers and stock market strength are not the real growth post-2008. Most of the economies are struggling with growth and sustainable growth has become a dream.  Post-2008 Economic policies malice has led to a revolt within the next generation. They are unemployed and unemployment never gives a good standard of living.

The ILO unemployment rate for metropolitan France was 9.1%, unchanged from the second quarter. The youth unemployment rate, which applies to the 15-24 year-olds, also increased to 20.6% from 20.2% in the previous quarter. If one digs further into the economic data of France one will find that the top 20 percent of the population earns nearly five times as much as the bottom 20 percent.

You cut taxes for the rich to make them richer and you tax the poor for paying the gap. France has done the same thing. The recent tax cut policy of France has led to €3.2 billion, or $3.6 billion of less amount of revenue the state received this year. France has a value-added tax of 20 percent on most goods and services. Over this tax, you impose more tax on a particular product or asset which is going to impact the society is bound to face a revolt.

Declining living standards and eroding purchasing power have now turned into a violent revolt. People will not accept whimsical policy burdens impacting the life of the citizens. When easy economic policies and steps can be accepted to safeguard the citizens then why cruel policies are taken into account.

The median monthly income of France is about 1700 euros or $1,930. France is the third biggest economy in Europe after Britain and Germany but its economic growth is very slow. Large numbers of permanent jobs were wiped out, especially in rural and former industrial areas. New jobs numbers which are being cheered by the readers are only temporary or contractual jobs and have nothing permanent in the same. This weak job market leads to more pain for having a healthy family and living standard. The promises by a political party are at risk now. The Britain Referendum speaks enough that any government can be thrown and people will not accept any policy which is detrimental to the citizen’s growth.

The point is clear that economic growth is not above the citizen’s growth. If the society does now grow and delve into more pain in the long term then imbalances and revolt are bound to come. Remember that in the last 10 years many every citizen of every age has gone through mixed phases of life and hence taking them granted for accepting any policy which will impact their life is now a page of history.

In many countries, the tax structure for the wealth is designed in such a way that they only become rich every year whereas the middle class of the society delves into below middle class or poverty line. Society imbalances are now becoming wider and each day its getting widening that now it’s going to beyond control of any government.


Macrocompassion said…
Reforms certainly do need sacrifices. In our present case, where there is an unequal and unfair distribution of wealth, it is the over-wealthy who will need to make the sacrifice. Much as I hate to be writing like a Communist who calls for the Preliterate to take charge and to reshape the national economy, there seems to me to be a need for serious changes to be introduced. This would be before the powerful and greedy monopolists of this succeed in polluting the atmosphere so badly that even they will discover (too late) that the numbers of us who are dying due to this change in the atmosphere is unnecessary, and that they the monopolists could be kinder to the poor.
Macrocompassion said…
Socially Just Taxation and Its Effects (17 listed)

Our present complicated system for taxation is unfair and has many faults. The biggest problem is to arrange it on a socially just basis. Many companies employ their workers in various ways and pay them diversely. Since these companies are registered in different countries for a number of categories, the determination the criterion for a just tax system becomes impossible, particularly if based on a fair measure of human work-activity. So why try when there is a better means available, which is really a true and socially just method?

Adam Smith (“Wealth of Nations”, 1776) says that land is one of the 3 factors of production (the other 2 being labor and durable capital goods). The usefulness of land is in the price that tenants pay as rent, for access rights to the particular site in question. Land is often considered as being a form of capital, since it is traded similarly to other durable capital goods items. However it is not actually man-made, so rightly it does not fall within this category. The land was originally a gift of nature (if not of God) for which all people should be free to share in its use. But its site-value greatly depends on location and is related to the community density in that region, as well as the natural resources such as rivers, minerals, animals or plants of specific use or beauty, when or after it is possible to reach them. Consequently, most of the land value is created by man within his society and therefore its advantage should logically and ethically be returned to the community for its general use, as explained by Martin Adams (in “LAND”, 2015).

However, due to our existing laws, land is owned and formally registered and its value is traded, even though it can't be moved to another place, like other kinds of capital goods. This right of ownership gives the landlord a big advantage over the rest of the community because he determines how it may be used, or if it is to be held out of use, until the city grows and the site becomes more valuable. Thus speculation in land values is encouraged by the law, in treating a site of land as personal or private property—as if it were an item of capital goods, although it is not (see Mason Gaffney and Fred Harrison: “The Corruption of Economics”, 2005).

Regarding taxation and local community spending, the municipal taxes we pay are partly used for improving the infrastructure. This means that the land becomes more useful and valuable without the landlord doing anything—he/she will always benefit from our present tax regime. This also applies when the status of unused land is upgraded and it becomes fit for community development. Then when this news is leaked, after landlords and banks corruptly pay for this information, speculation in land values is rife. There are many advantages if the land values were taxed instead of the many different kinds of production-based activities such as earnings, purchases, capital gains, home and foreign company investments, etc., (with all their regulations, complications and loop-holes). The only people due to lose from this are those who exploit the growing values of the land over the past years, when “mere” land ownership confers a financial benefit, without the owner doing a scrap of work. Consequently, for a truly socially just kind of taxation to apply there can only be one method--Land-Value Taxation.

Previous Post Next Post