Left Renewal

By By John Warren, Annandale, NSW

The Management Committee of Australian Options believes that the Left has "lost the way forward". [Winter,#37.] I think the reason is plain to see. An effective renewal of the Left must find the way to bring back to the fore a recognition that it is capitalism itself which is the problem, not the many problems which arise from it.

The central feature of capitalism is that it works by generating inequality. The income, and hence incomegenerating wealth, of the community is concentrated into the individual hands of a minority of the population. The deprivation, poverty and unemployment suffered by so many, results because that wealth is not reinvested to improve our society. Instead, the community’s hardearned income is diverted to the conspicuous consumption of the few. The grossness of the extravagance and waste by that rich few can be seen every day in our news media. It is displayed and celebrated. Politically the system manages to convince the mass of people, who suffer under such startling disparity, to accept it as a "normal" state of being. The Left will be renewed when it undertakes the task of reawakening the condition; it can be changed given the rallying of the will of enough people.

In particular the taxation system has been devised to encourage and assist the development of inequality. The rich are provided with an array of mechanisms by which they can minimise their "income" to a point where they pay little or no tax but accumulate their own wealth and power. The burden of providing socially necessary public services is left to the ordinary wage and salary earners.

Redressing excessive inequality should be at the centre of the aims of a renewed Left. The problem has been studied for years and the outline of a taxation system which will go far to achieve that end has been laid out in some excellent discussions (see below). Some principles for such a tax regime are:

(1) Every individual is responsible for how they spend their own income.
(2) That part of their income which is invested in income-generating projects is tax free.
(3) The remainder of their income is the amount they spend for their own personal benefit and is taxed at a rapidly progressive scale.
(4) Every man, woman and child is allowed a tax-free threshold (say $15,000) so that a couple with two children, earning $60,000, would pay no tax.
(5) Concessions, which minimise tax liability on personal expenditure, would not be allowed.

The aim of such a scheme is clear. It removes a basic tax burden from the mass of workers and it diverts investment towards works that contribute to the wellbeing of society as a whole. It provides a policy base for renewal of a united Left quite distinct from nonthreatening adjustments to the existing capitalist system.

More detailed arguments for this suggestion are to be found in: An Expenditure Tax by Nicholas Kaldor; Luxury Fever by Robert H Frank and Progressive Taxation on Personal Expenditure by the late Ian Hinckfuss of Queensland University.