For a billionaire tax!

Our lives are worth more than their profits
Our lives are worth more than their profits. Photo: Alex Bainbridge

Greens leader Adam Bandt announced in March that his party would campaign in the next federal election for a 6% annual tax on the net wealth held by Australia’s 122 billionaires.

This, he explained, would raise about $40 billion a year. In addition, the Greens are campaigning for a super profits tax on corporations earning above $100 million a year.

As Australia’s billionaires increased their wealth by 34% since the start of the COVID-19 pandemic, while the wages share of national income dropped to a historic low, this would be a modest proportion of the growing inequality.

The personal wealth of Australia’s richest person, Gina Rinehart, more than doubled during the pandemic — from $16 billion to $36 billion — while the 10 richest billionaires increased their wealth by $68.4 billion.

Bandt put the billionaire tax proposal to PM Scott Morrison during question time on May 11. Bandt received a predictably dismissive reply just hours before the government delivered its latest pro-big business budget.

Morrison repeated the familiar argument that the way to create jobs and guarantee public services is to give more tax cuts and subsidies, because it is those capitalists who create jobs and keep the economy healthy.

That is the Coalition’s core policy and Labor governments have adopted it in practice.

Make the rich richer and the benefits will trickle down, but Morrison does not present it that way because most people don’t believe the trickle-down myth.

So, Morrison deploys a sleight-of-hand trick: “We are the party of lower taxes, and I’ll tell you why that is. We are the party of lower taxes because we believe that Australians should keep more of what they earn. We believe that a dollar kept in the hands of an Australian family is better than a dollar kept in the hands of the government. That’s what we believe.”

He suggests that his tax cuts are for “Australian families”, but that is a fat lie.

Detailed analysis by The Australia Institute revealed that in 2020–21, 41% of benefit of the tax cuts will go to the top 20% of income earners, while the bottom 20% of taxpayers will receive only 4%.

In 2021–22, 88% of gain from the government’s tax plan will go to the top 20% of income earners, while the lowest 20% receive nothing.

The study found that of the still-to-come Stage 3 tax cuts, which Labor supports, more than half will go to the top 10% and 72% will go to the top 20%. Half of all taxpayers will only get just 5% and the bottom 20% will get nothing.

The tax cuts are naked robbery by the billionaire class and its political justification is a massive con job.

On top of this, tax dodging by billionaires and big business is out of control. One in three big corporations pay no tax because of international tax avoidance schemes.

So it will be important in the coming federal election for Greens and socialists to unite in campaigning against this costly Lib-Lab tax-cuts-for-rich policy.

A billionaire wealth tax and a corporate super tax should be part of this campaign, alongside a plan to make the income tax scale steeply progressive (instead of the flat tax direction of recent tax changes).

The argument for such a reversal is not just an appeal for a fairer distribution of income and wealth. The increasing calls for wealth taxes on the rich are often based on the idea of making things a little less unequal and increasing public funds to address urgent social and environmental needs.

French economist Thomas Piketty, author of Capital in the Twenty-First Century, and United States economist Joseph Stiglitz argue for wealth taxes to make the wealthiest sacrifice for the public good. They want a fairer, more progressive capitalism.

But socialists recognise that the problem with the huge increase in inequality is not just capitalism’s unfairness, or the fact that capitalists accumulated this wealth through an ugly combination of exploitation, plunder and swindling, but also what they do with that wealth.

Australia’s billionaire class uses its ill-gotten gains to invest in fossil fuel extraction when the science tells us this must stop now.

It invests in building up the arms industry and, to help this along, the Australian government has become the main standard bearer for former US President Donald Trump’s hysterical China war mongering.

In this context, billionaire taxes and super profits taxes on big corporations are just a start of a necessary process to break their unsustainable domination of economy and society.

Socialists advocate for the socialisation and democratisation of the economy, but to get there our society will have to go through a collective experience of mass struggle against the billionaire class.

What would this look like? Imagine if we had a green and socialist government that implemented the billionaire tax and corporate super profit tax that the Greens propose.

We saw how Rinehart and her billionaire gang reacted to former Labor PM Kevin Rudd’s attempt to impose a mild mining super profits tax. So we have to expect stiff resistance from the billionaire class.

Only a mass union and community response can break such resistance from the rich and that campaign will have to be countered with demands for even bigger imposts on the billionaire class, including direct socialisation of the assets they control.

[Peter Boyle is a member of the Socialist Alliance national executive.]