Real tax reform: a love letter to Ken Henry

Dear Ken

I am pleased to be able to make a submission to your Inquiry into Australia’s Future Tax System.

We live in a society divided into classes.

The exploitative capital accumulation system means that our bosses expropriate the value we workers create and return a small amount to us in the form of wages.

This surplus value is divided up between the capitalist class and the state in the form of profit, rent, interest, dividends, royalties and government revenue.

Most tax debate in our country reflects this basic class division, but from the point of view of the bourgeoisie.

Efficiency, equity and simplicity are merely competing and overlapping views among the capitalist class and those who support them about how to best fund the State and ensure the exploitative system still runs as smoothly as possible.

This is in reality the debate between neoliberalism and neoliberal Keynesianism.

It was a Minister in a feudal government in France who summed up the dilemma capitalism faces. As Jean Baptiste Colbert said: “The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.”

I prefer a different approach, which will involve lots of hissing from the ruling clique.

Like Dennis Healy, former British Labour Chancellor in the 1970s, I would “squeeze the rich until the pips squeak”.

Actually the more the state extracts from the surplus value we create but the ruling elite steal, the slower the process of capital accumulation becomes and thus the longer the boom and slump and then depressionary cycles take to impose themselves on the economy. (This is true if the spending goes into unproductive or waste areas like armaments.)