Tax cuts for the rich - enough to make you sick

Saunders manages to conclude:

Next time you hear a socialist [sic] economist arguing that the rich gain unfairly from tax cuts, that cutting taxes does nothing to improve work incentives, that we cannot afford to cut taxes because it would destroy government services, or that tax cuts pander to selfishness, refer them to [Davidson’s] paper.

Well, actually I don’t think the paper will persuade many, at least not in the direction Saunders suggests. It is however there to be read and I encourage anyone interested in these issues (whether socialist economist or not) to have a look. If these carefully selected issues to put their case for cutting taxes are the best that the CIS and its allies, such as Pearson, can muster, then rational beings will quickly see through the arguments.

I do not want to pursue that however. Instead in this article I want to put my eggs in a different basket: the effects of inequality on health. While the inequality debate “rages” in Australia, a most significant book on inequality has been published by a true intellectual, Richard Wilkinson, the eminent epidemiologist, called The impact of inequality. How to make sick societies healthier.

There has been a genuine debate genuinely raging for some time now in the health literature on a very important issue in the so-called social determinants of health (see for example Wilkinson and Marmot Social determinants of health: the solid facts [Second edition] (pdf file 474KB)). It is widely recognised, and has been for many years, that poverty is bad for people’s health. Now Wilkinson has provided the definitive text to show that additionally inequality is bad for health.

Wilkinson quotes study after study to prove his point. For example, in more equal societies “homicide rates and levels of violence are consistently lower” (p33). Wilkinson also makes the point:

… if health inequalities were the other way around, we might expect analyses of whether the economy could withstand the cost of losing an average of five to ten years of life expectancy among its brightest and best captains of industry (p58).

He states very clearly (p143), “redistributing income from rich to poor improves health no matter the mechanisms”.

What comes through again and again in Wilkinson’s book is the positive impact on health of a sense of community - not something that is normally viewed in a favourable light by the supporters of the individualism of the neo-liberal market place. He writes, for example, of the Indian state of Kerala, which “has long been known as India’s most egalitarian state”, (p231) that “co-operatives make up a substantial part of every sector of the economy”.

Kerala also “has many of the characteristics associated with high social capital” (p231). Most crucially:

… despite levels of income that until recently were lower than the Indian average, “it has outstandingly good levels of life expectancy ... only three or four years less than the United States (p232).

There is strong evidence in this book that inequality is bad for our health. In this context and that more directly of taxation policy, Wilkinson suggests, “Using more progressive taxation to pay for more generous social security benefits may be the most direct way of influencing income distribution”.