Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
Nope. It's all about maintaining a basic living standard despite not receiving an income from a job. Period.
So what's the problem then?
Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
Wrong. The higher taxes for the rich (49% in some cases) are redistributed by the government through Centrelink to finance welfare payments for the lower socio-economic groups.
Higher taxes for higher incomes is a way to reshape the exponential relationship between income and effort/value back into a linear one. Relative inequalities remain.
5.5% unemployed people out of a population of 23 million receiving Newstart allowance at $500 per fortnight works out to be $16.5 billion per year. GDP is about $1.372 trillion, so CentreLink payments are only 1% of GDP. That isn't much.
People who have a job are still better off than people without one. Where's the wealth redistribution? If a system preserves relative inequalities, there is no wealth redistribution.
Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
Wow. You're a full-blown communist aren't you? What you're advocating here is exactly, and precisely, and ideologically what communism was saying when it first started in Russia.
How is it communism? You started talking about businesses going broke. You either help businesses or you help people get rich. I am surprised at your response. Initially you tell me I'm socialist for saying that social security is a good thing (helping the people). Now you tell me I'm "communist" for coming up with a scheme that would help businesses. I thought being pro-business was the opposite of communist. Where did I go wrong?
Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
And it was precisely because no private person was allowed to get rich, that the entire country lived in dire poverty until communism was finally ditched.
Huge numbers of people were already poor in Russia. The communists simply failed to change that. That was the legacy of serfdom and feudalism, which the Russians hoped to change through revolution.
Most people had less than what they needed in Russia. They were below the poverty line. That is in huge contrast to what we have here in Australia, where most people already have what they need, but they don't have what they want. Most Australians are above the poverty line. Your analogy doesn't fit.
In Russia, under the Soviets there were no markets. It was a planned economy. There's a huge difference.
Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
During the entire Industrial revolution in the UK, the poor buggers who worked in the factories and in the mines had to buy all of their needs from shops run by the companies they worked for.
Result: Their wages were ripped right back off the employees at the company shops ~ leaving them with little more than slave wages for a beer or two on a night off.
How is slave labour communism?
These people weren't saved by capitalism. They were saved by the unions. Workers got together and refused to work. They forced employers to pay them more by striking. Collective action drove wages up. You're blaming communism for poverty in countries where communism never existed. Communism never took hold in the UK. I don't know why you'd be talking about the UK if you wanted to talk about communism. Maybe the USSR but not the UK.
When we buy cheap products made in sweat shops in China, is that communism? I thought it was free trade and globalisation (ie. market-driven capitalism).
Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
That's Economic Marxism. State-controlled businesses allowed to generate capital for the State coffers ...
I didn't say anything about state-controlled businesses. Businesses are still part of the market. There is no planned economy. Capital doesn't flow to the government (ie. state coffers), but back to the businesses. A portion of income tax will be redirected back to businesses if they invest it in something useful (like giving subsidies or tax cuts).
Under the current system, if an employee receives $100k from company X in gross income, income tax takes away $47k and the employee only gets $53k. The $47k goes to the government and never comes back except through indirect means like tax cuts and subsidies.
What I was suggesting was a "conditional income tax." Instead of the whole $47k going to the government, company X can recover some of that income tax by making some approved investments, like R&D and the purchase of capital goods. The result is that company X loses less of its money and has more opportunities for investment and expansion. The government, on the other hand, loses some potential revenue. The general population in the meantime, is no worse off than before.
Lord Herbert wrote on Aug 13
th, 2013 at 9:08pm:
... while the peasants remain on subsistence wages.
Well, like I said, most Australians are above the poverty line. There aren't going to be any peasants here. Higher income taxes on higher income earners and lower or zero income tax on low income earners isn't going to create poverty if most people are already above the poverty line.
We live in a developed country. Life here is much better than in Calcutta or Somalia, but we don't need to live like kings.