“Inequality is a choice”

Anthony Robins writes at The Standard that Inequality is a choice.

Inequality is a choice. It isn’t a choice made by individuals, it is a choice made by governments.

‘Inequality’ far more complex than that. For a start it depends on how you define inequality.

I choose to make working for a living more of a priority than some, and I choose to put other priorities ahead of accumulating possessions and monetary wealth.

Having kids is costly on money terms but my children and step children and grand children are worth far more to me than a better bank balance.

There is no way a Government can impose and enforce equality. There will always be arguments over what is equal and what is not.

Even the Chinese Government has given up on trying to force equality of single child families, and they could never force women to have that one child anyway.

Robins doesn’t help his argument when he chooses to misrepresent facts.

The last Labour government chose to implement a higher top tax rate and Working For Families, these policies (though arguably too little too late) did reduce inequality. The current National government chose to cut the top tax rate, attack labour laws, and increase GST, these policies are increasing inequality.

Yes the current National Government chose to cut the top tax rate. And Robins chose to omit other pertinent facts, like the Government also cutting other tax rates and increasing benefits to compensate for the increase in GST.

This dishonesty is common from the left.

For facts see Budget 2010: Tax reductions in detail which includes:

Key tax changes
All personal income tax rates will be cut from October 1, 2010.
Income up to $14,000 will be taxed at 10.5%, down from 12.5%.
Income from $14,001 to $48,000 drops to 17.5% from 21%
Income from $48,001-$70,000 down to 30% from 33%
Income over $70,000 will be cut to 33% from 38%.

GST
GST will increase from 12.5% to 15%. Income support and other payments will rise by 2.02% to compensate for the increase. This includes student allowances and supplementary benefits, superannauation, veterans pension and the Working for Families tax credit.

Company tax
The company tax rate will fall from 30% to 28% from the 2011/12 income year.

The sting
While higher income earners will benefit from the government slashing the top tax rate, there is a sting in the tail of the budget that will hit wealthy in the hip pocket beyond just an increase in GST, which is widely considered to adversely affect the less wealthy the most.

Building depreciation tax deductions will no longer be allowed from next year, providing the building has a useful life of 50 years or more. This would include most rental houses and offices.

Robins also doesn’t discuss what effect these tax changes had on employment and the economy that were severely stressed by the Global Financial Crisis.

Honesty is a choice.

There are some choices related to inequalities, both personal and by Government. And there are many aspects of inequality that none of us can do much if anything about.

Inequality is a vague ideal that as far as I’m aware has never be achieved. Perhaps Robins or someone else can point to examples of sustainable equality in any human society.

I think that equality is the wrong goal.

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25 Comments

  1. Yellow Admiral

     /  10th November 2015

    Its funny how often those who complain about the reduction in top tax rates and the perceived ‘benefit’ this created for ‘the rich’ ignore the increasingly high income level that attracts an effective zero tax obligation – or even, below a certain level, a negative rate.
    In 2013/14 households with up to $60,000 income received more in welfare on average than they paid in tax. They effectively paid no tax. (Note I say ‘households’, not ‘people’.)
    (Source: Treasury)

    .

    Reply
  2. kiwi guy

     /  10th November 2015

    The idea is to take the sharp edges of Capitalism with some redistribution policies. What those should be will be argued about forever.

    Overpopulation,spluttering global economic growth, environmental degradation, rapid technological change re: AI, machine learning, robots – all these will keep incomes suppressed and exacerbate wealth inequality.

    Reply
  3. kiwi guy

     /  10th November 2015

    Anyway this is ONLY about economic inequality, as we all know the REAL inequality involves transphobia, fat shaming, white straight male privilege and stuff:

    In this wonderful diversity affirming school, student grades are assessed by first adding together ALL students exam marks and then distributing those marks EQUALLY between ALL the students thus ensuring that the system is INCLUSIVE, ACCEPTING and SAFE!

    Reply
  4. Equality of OPPORTUNITY in terms of good housing, access to primary healthcare and access to education up to the end of Secondary school should be the Left’s objective.

    And the big problem they have is……….. NZ already has the above Equality of OPPORTUNITY in 95% plus of cases.

    Labours slogan was always A fair days wage for a fair days work. That has pretty much been achieved, with a few people who never skill themselves struggling when they have families. If you want it you can get it in NZ, the pathway is through education and upskilling.

    NZ is already a pretty socialist country when you look at the access to housing, education and medicine plus all the other interventions in our lifes at central and local government level.

    The Left face irrelevancy in the face of most people doing okay. So they have invented inequality as the mantra, and some people fall for it.

    Equality of Outcome is just plain stupid:
    – do we have every sports game finishing in a tie?
    – Does every fishing trip end in success where everyone catching the same number & size of fish, heck does every fishing trip end in catching anything at all!
    – should the person who works hard, grows their skills and experience thereby achieving a high paying job get the same take home pay as the person who doesn’t seek to improve and stays in the same entry level job forever?

    Reply
    • Mefrostate

       /  10th November 2015

      I tend to be a bit of a lefty, particularly with ideas like equality of opportunity, but I think you’ve captured the spirit of how I feel about NZ politics quite well.

      NZ really does have amazing social support systems, many of which have been tweaked in pretty constructive ways by National (jobseeker’s benefit, last budget welfare increases, social investment scheme), so there’s really not all that much for Labour to sell me at the moment.

      Reply
  5. tealeaves

     /  10th November 2015

    “Equality is the wrong goal” – that’s interesting. My parents used to have parties and the social make up would be something like this: Unemployed couple with two kids. Surgeon. Housewife, and husband who worked in some kind of tool shop. Car groomer. Postie. GP. GP’s lunching lady wife. Young person with first job. Couple who owned fish’n’chip shop. They all found stuff to talk about – (I’m sure the beer helped).

    Reply
  6. Mefrostate

     /  10th November 2015

    Pete I agree with much of the content of your post, but I wonder if we could stay away from phrases like “this dishonesty is common from the left”. I think this tends to encourage ‘us vs. them’ politics, which I don’t think helps anyone. Far better to call out the individuals for their specific inaccuracies, rather than lump the entire left-wing philosophy together into the dishonest bucket. Plenty of dishonesty right across the political spectrum.

    Reply
  7. There’s two kinds of people in the world. One kind insists on their rights. The other insists on their responsibilities.

    Reply
  8. Goldie

     /  10th November 2015

    In 2008 the Government (when Labour was in power) was doing work on how the top tax rate (39%) was actually losing the government money, as people on the top tax rate were easily able to shift to corporate. Even if Labour had won the election in 2008, they probably would have considered either lowering the top tax rate or shifting the bands upwards, because having a significantly higher top tax rate does not increase revenues and encourages avoidance.

    The literature overseas suggests that tax has no obvious effect on inequality. For instance, there was a survey done of UK Indians. The first generation of Indian immigrants were very poor. However, the second generation on UK Indians are remarkably successful, with higher incomes on average. Taxes and welfare have zero impact on the ability of a poor group of people to become wealthier. The factors that do matter are (a) a culture with strongly aspirational values; and (b) access to education.

    So the evidence is that if Government is serious about reducing inequality, fiddling with the top tax rate will do nothing, but providing improved access to education is critical.

    Reply
    • tealeaves

       /  10th November 2015

      This reminds me of an interview I heard on RNZ with some PI women from an all female, all PI law firm in Auckland. They said “it’s just easier” to work with each other than try to crack the established networks. I totally agree about education, but people who are never going to be part of the old boys network also need to work together in an entreprenurial sense to create new networks. UK has massive population and huge Indian population, they are probably well placed to foster “growth” within their own large communities, without having to break into established networks. I think it makes a difference.

      Reply
  9. tealeaves

     /  10th November 2015

    “Equality wrong goal” – also, isn’t it better to be free to choose as well? I grew up in a New Zealand in which it was OK to be a full-time potter living in a house of questionable quality, in a seaside town somewhere where your close neighbours were as likely as not pot growers, among other things. People weren’t looked down on for living like that. They could support themselves to an extent that satisfied their preferences. I think we’ve become much more corporate and narrow minded in our thinking about other people.
    One guy I was especially in awe of lived in a caravan park in Coromandel, polishing the abundant quartz that the soil threw up with toothbrushes. Maybe he was retired. I wonder if he’d be seen as a no-hoper/loser/weirdo now.

    Reply
    • jaspa

       /  10th November 2015

      No, there are still plenty of people like that in Coromandel. It’s quite acceptable there.

      Reply
  10. John Schmidt

     /  10th November 2015

    I recall my time at high school some 40 plus years ago in my later school years I watched friends leave school rather than follow an academic pathway, leaving with little or no qualifications. Back then labouring jobs were easy and pay was good. Mean while I was sitting in the class room learning not earning. Upon leaving school with UE I began a cadetship which meant another 4 years of study with a tiny salary, a fraction of what my friends were earning as Labourers. This followed by 3 years of practical experience and at that conclusion (7 years total) I finally was earning the same as my labouring friends. Fast forward to today my career has allowed me to advance my earnings substantially by taking career opportunities when they occurred so that today I now earn 3-4 times that of my labouring friends who are now struggling to get employment and are struggling with everyday life. The important part to this story is life choices, I chose to stay at school and do post school study doing the hard yards while others choose to take the easy way. Long term my choice has been a story of success whereas my labouring school friends choice has ultimately failed them. So whose fault is the failure, those friends were capable of doing better at school and beyond as I did but chose not to. Under Labour they are talking redistribution of wealth which I take to mean taking money from me and giving it to my labouring friends therefore rewarding them for making a poor life choice right back at secondary school. How is this fair given that another Labour promise is to be fair.

    Reply
    • tealeaves

       /  10th November 2015

      I think that devalues labouring as valid work. Labourers built the pyramids and they’re seen as a fairly significant cultural contribution. Builders are a necessary part of society, as much as doctors and lawyers or accountants. It’s not the ‘easy way out” in my view to learn a trade. Some people make multiple career changes, your builder friends who are perhaps now finding the work too hard on their bodies can still find new ways to adapt their skills. Isn’t that “the market” at work?

      Reply
      • tealeaves

         /  10th November 2015

        For example, maybe one of them has totally undocumented but near expert knowledge of slate tiles. People who spend years in trades have irreplaceable knowledge of how that work works. There is devil in the detail of every job. Employers who are too cheap to hire knowledge and experience because they want to flog a young pup for $16.00 an hour also have a part to play in the no doubt multifaceted case of your friends’ unemployment.

        Reply
      • John Schmidt

         /  10th November 2015

        I used the word labourer carefully. They are not tradesmen. Tradesmen in my view were similar to myself although they usually left school 1-2 years earlier than myself they entered into apprenticeships which is still learning and ultimately become tradesmen which from memory took around 5 years. My labouring friends were not tradesmen they worked for tradesmen doing hard physical work or did other physical work that did not need qualifications. The point of my post was not to demean these people but to highlight that we are all responsible for our own life choices and where those choices lead you. These people were academically capable people who were attracted to the labouring money, which at the time was substantial, choose to leave school early and initially they had a financial head start. However in the fullness of time was short sighted and our financial positions have since reversed. The second point of my post being Labour are proposing a redistribution of wealth which means taking money I have earned and giving it to my labouring friends which goes back to my last part of my post how is this fair. It was hard enough being labelled a rich prick by Labour followers leading into the last election and then having the nerve to ask for my vote.

        Reply
        • Robby

           /  10th November 2015

          Dead right John. If I knew then what I know now, I would have stayed at school, and tried a lot harder.

          Reply
  11. Mike C

     /  10th November 2015

    “Some People are more Equal than Others”

    Reply
  12. kittycatkin

     /  10th November 2015

    When it comes to equality between the sexes, I don’t want to be equal when it comes to being legally obliged to go and risk my life in a war, to be legally obliged to keep and pay for a child who’s not mine but is my partner’s as the result of unfaithfulness. do all the hard, heavy, dangerous work like being a furniture mover, miner or dustman, live a shorter life….

    Reply
  13. kittycatkin

     /  10th November 2015

    Maybe if we ignore K*w* G*y, he’ll go away.

    Reply
  14. John, while I agree with you we are all responsible for our own life choices, things also happen to people which they don’t choose but which can affect their lives in ways ranging from subtle through dramatic to devastating. Things like teachers, sickness, trauma or abuse. In a society where inequality is endemic, even if it’s only the unequal outcomes of equality of opportunity, one doesn’t get to choose one’s home environment and how that affects one’s chances in life.
    You have clearly benefitted from your own life choices; but also from a socio-economic system that values the educated professional or skilled tradesperson much higher than the ‘unqualified’ labourer, via a system we call the ‘free market’. It values human labour as a commodity to be bought and sold. The employer profits from the difference between what is charged for the labour and what is paid to the worker; and also from paying the worker as little as possible. There is some truth in the old communist maxim, “profits are unpaid wages”. Today there is a general acceptance that this is the only way human labour can be organised. We accept a “dog eat dog”, survival of the fittest, law of the jungle ethos. We accept a disempowerment of organised labour and indeed have legislated for it.
    Profit from the labour of others is only made possible by the foreign, non-human element money. In a more refined form it plays the part which in ancient moneyless systems was performed by brute force, when labour was performed by captives and slaves.
    The work of the brain surgeon, philosopher, artist, musician, lawyer, driver, cleaner and every known ‘job’ constitutes human labour. It is arguably the highest expression of being human, though for many people it is neither career nor calling, simply survival. Still, it remains the ideal that one’s occupation might also be one’s ‘life’s work’, one’s vocation: That perhaps one would do it regardless of whether one got paid or not?
    As my favourite philosopher Frank E Warner says, “To what moral depths must humanity have sunk for man to arrogantly view himself as the pinnacle of creation and not feel unutterable shame that he treats his own labour as a commodity, like coal or fertilizers!?”
    My point is that there are other than Darwinian ways of looking at this. In his book “Future of Man” Warner concludes that of all the things that might be done about money and the value (or degradation) of human labour, ultimately there is only one decisive solution; the separation of labour and wage. Why, after all, should a person who finds their ‘realization’ in physical labour not be paid as well as another who writes or experiments, treats, manages, markets or argues in a courtroom?
    The potential of fluidity and mobility in modern employment has yet to be fully realised either, and who knows what effect this might have on ‘equality’ or equality of opportunity? Your labourer friends might retrain for some other occupation?
    PS – We all (more-or-less) ascribe to a system of taxation and redistribution. Personally I believe the difference between centre-left Labour and centre-right National is nowadays a matter of tiny details and even tinier degrees.

    Reply

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