Well, I didn’t intend two blogs about Bill English in a row, until I saw this press release, where he cynically manipulates statistics to try and show that inequality is equality. English claims the tax system has become “more progressive” since National’s 2010 tax changes, because a higher proportion of income tax revenue is coming from the richest earners.
He’s ignoring one rather important point about income tax: You pay a lot of income tax if you earn a lot of income.
It’s not surprising that the top 12% of households (and 6% of individuals) are paying proportionately more income tax than they were in 2008, because they’re earning proportionally a lot more money. (The above graph shows the top 10%’s incomes rose from about $85,000 to $100,000 from 2008-2011, while the median income stagnated at about $30,000).
Simply put, the rich are contributing a bigger slice of the tax pie because they’re earning a bigger slice of the income cheesecake. This is not something to be happy about, and certainly doesn’t mean taxes are more “progressive.”
Let’s go back to high school for a sec: A progressive tax system partially offsets inequality by taxing higher incomes proportionally more than lower incomes. Income taxes are typically progressive (e.g. Bill English’s $297,400/yr is mostly taxed at 33%, while his toilet cleaner’s $14/hr is mostly taxed at 17.5%). Sales taxes like GST are flat (15% across the board), but in practice regressive, because they take up more of the poor’s incomes than the rich’s.
National’s 2010 tax changes made tax more regressive – the lowest income tax band (under $14,000) dropped 2%, while the top band (over $70,000) dropped 5%. Company and investment tax dropped too, but GST increased. Basically, in a time when tax needs to get more progressive to help combat inequality, National gave tax cuts to the rich instead.
Some world leaders according to PoliticalCompass.org (only vaguely related to this blog)
A friend who studies political science commented on Facebook in response to my last blog, saying among other things that she was (I’m paraphrasing) “confused about my determination to attribute everything to left-right frameworks.” She has a good point and I thought it deserved a good response. I wrote what turned out to be a very long response… I’ll let you decide if it was a good response.
I thought I might share it here as well, because a lot of my recent blogs have drawn quite heavily on the left-right spectrum, and I thought some other people might be interested. As always, all comments are welcome.
The truth is that we probably largely agree that the left-right framework is over-simplified etc. – likewise with the Political Compass, which is only slightly less simplistic (two spectra instead of one).
Where we might differ is: I don’t think the left-right frameworks are completely useless and thus should be thrown out completely. Or at least, I only think they can/should be thrown out by people like yourself who have the time and knowledge to look into, and analyse, each party and philosophy and candidate on their own merits – which is barely anyone. I personally don’t have the time, knowledge or brain-power to analyse everything and everyone on its own merits without any generalisations to help categorise it.
When I use the left-right framework, I partly use it as shorthand for more complex realities (I think conciseness is vital in blogging, and I struggle enough as it is here). But I partly use it with an implied audience not of people like yourself who know I’m oversimplifying things, but of people who struggle to understand politics at all. I talk to quite a lot of people who describe themselves this way, and the number may surprise you as a POLS student… this is not to say that these people are stupid, they just haven’t put in the necessary hours and hours of time to understand politics. With local politics this category is even larger… I think I’ve probably done more research into it than most voters (at least most young voters), but I still don’t really understand anything beyond what I wrote in my last blog.
While over-simplified, I do think the left-right spectrum touches on some truth, for example the way neo-liberalism has shifted the political ‘centre’ in NZ. You as a POLS student would have more sophisticated ways of explaining this than me, but is it completely wrong to say that neo-liberalism involves a shift to the (economic) right? I think it’s a generalisation but a generally true generalisation.
I think if someone doesn’t understand politics at all, nor how NZ parties have shifted over the years, and then they hear my (admittedly simplified) explanation of both Labour and National shifting to the right economically since the 80s, they’ve increased their understanding. I don’t want to sound superior or condescending but if some of the people who struggle to understand politics (because they have other priorities, and haven’t put in the hours and hours you and I have into politics) read my over-simplified blogs and feel they understand it a bit more, I’m glad.
I also note that a lot of polls say that the current government’s policies are unpopular, but John Key as a person is very popular. There seems to be a disconnect from understanding the political realities and trends and philosophies that certain parties stand for (consciously or unconsciously), and the kind of policies they are likely to enact because of it. So if I can help to slightly decrease this disconnect, I’m glad too.
It’s partly my personality… I know a lot of people don’t like generalisations, but I do like them, as I feel that they can help us gain some kind of understanding of the patterns of how the world works. Even if they’re over-simplified, which they inevitably are, I think it’s still better than just seeing the world as random chaos and not having any grasp of the patterns at all.
I don’t think everything should be attributed to the left-right spectrum, and if what I write sounds like I’m doing that, it’s because I like to write in an extreme style, and I like to point out what I don’t think is being pointed out enough. It’s my impression that what’s pointed out a lot at the moment is personalities, individual quirks etc, but what’s not pointed out enough (in my experience) is the patterns and the groups of individuals that tend to believe certain things and do certain things.
It’s a bit like people saying that when multinational companies do horrible things, it’s because there’s a few bad apples. But if there’s a consistent pattern that multi-national companies, in their exclusive drive to maximise profit, act in psychopathic ways (cf. The Corporation documentary – which is probably oversimplified too), I think it’s worth pointing that out.
Likewise with Marryatt’s pay-rise. People might think it’s just a few bad apple individuals on council that voted for the pay-rise. But I think it’s worth pointing out that they seem to have all been right-leaning (correct me if I’m wrong), and that the four of them who are standing again are all standing for right-leaning political groupings (I-Citz and City 1st).
There’s another reason why I stubbornly cling on to the left-right spectrum as a way of describing things. The last few decades have seen a growth of ‘post-modern’ distrust of big stories and grand theories, and part of this is the growth of what has been called a ‘post-political’ and ‘post-ideological’ mindset, where we don’t like politicians to be tied to any big ideas, our politicians claim to be ‘pragmatic’ rather than ideological, and supposedly all the big grand narratives of religion, nationalism, communism etc. are dead.
But what this obscures is that there is in fact one ‘narrative’ that is far from dead. Capitalism (and consumerism, free markets, commodification, inequality etc) is more globally dominant than ever before, and it no longer needs a big narrative to support it – in fact it’s supported precisely by the post-modern turn from big theories to individual feelings and individual consumption. (You could also say that social liberalism/individualism is a narrative that is extremely powerful in the West, but I’d say that capitalism is more globally dominant – cf. China combining capitalism with social authoritarianism and doing it even ‘better’ than the countries who combine capitalism with democracy).
Paralleling this, in political science (from my outside perspective) there seems to be a movement towards seeing the old left-right frameworks as inadequate and seeing people who ‘still’ use them as out of touch. But again, I think this can potentially obscure real political phenomena like neo-liberalism, especially if you don’t replace my over-simplified ‘shifting to the right economically’ explanation with a better and more accurate explanation that is still accessible to non-POLS students.
So my question is what should we replace the left-right spectrum with? I think I’d be happy to abandon the left-right spectrum (and the political compass two-spectrum model) if I saw that there was a better alternative. I’m very happy to be corrected and educated here, but at the moment, all I see replacing the ‘old’ left-right model is A) from academics: complex theories that are inaccessible to most people, B) from politicians: cynical obscuring of the real political realities they represent. I’d rather have an ‘old-fashioned’ model that can be understood and engaged with than intentional or unintentional obscurantism that contributes to lack of understanding and apathy.