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Tax the rich : a central political question in the developed countries
by Eric Toussaint
27 October 2011

Since the summer of 2011, the expressions “class struggle” and “class war” are at the heart of the speeches delivered by the mouth-pieces of the dominant classes.

It is remarkable to notice that it is now the dominant classes and their representatives that speak of class war. In the USA, the capitalist class feels it is of such political and idealogical strength in front of so little social resistance it has broken the taboo about mentioning class struggle. If it has done so, it is also because it feels that its dominant position may quickly deteriorate. It is bothered by the occupy movement at Wall street and in other places.

The governments, in the face of this financial and industrial disaster brought on by the capitalist class, timidly try to tax the rich a bit. The republican party in the US need no further provocation to accuse Barak Obama of waging class warfare*. Obama wards off this argument by citing Warren Buffet, one of north America’s greatest fortunes, who, a few months ago proposed a rule that has come to be known as the “Buffet rule”*. This billionaire noticed that his secretary pays twice as much tax as himself. With this rule in mind Obama says : it must be avoided that those making more than a million dollars a year pay less tax than those making less than a million. In the UK as on continental Europe the idea is making headway too, the governments of Silvio Berlusconi and Nicolas Sarkozy have created a little supplementary contribution for taxpayers respectively paying more than 300,000 € and 500,000 €. In the UK, there is discussion about marginal tax rates on the highest income bracket.

The Economist, a British weekly, traditionally defending the capitalist class, has taken position. In its 24th September 2011 issue, the front page headline is “Hunting the rich”, the illustration shows Barak Obama mounted in full hunt attire fenced in by a pack of dogs chasing after the scent of the wealthy fleeing with their loot.

The lead editorial develops the subject thoughtfully. The subtitle reads: ’The wealthy will have to pay more tax. But there are good and bad ways to make them do so’. It goes on : “Across the developed world the hunt for more taxes from the wealthy is on”. Then having mentioned the debates in the USA provoked by Obama’s will to apply the “Buffet rule” and the decisions taken by Berlusconi and Sarkozy, it adds : “Class warfare may be a loaded term, but it captures a fundamental debate in Western societies: who should suffer for righting public finances”?

This discourse is very idealogical : “In general, this newspaper’s instincts lie with small government and against ever higher taxation to pay for an unsustainable welfare state. We reject the notion, implicit in much of today’s debate, that higher tax rates on the wealthy are justified because of the finance industry’s role in the crunch: retribution is a poor rationale for taxation”. The Economist states that the richest 1% of Americans pay high taxes and it regrets that London’s very rich pay more tax than they would in any other great financial center. Nevertheless, The Economist does concede that in spite of everything the wealthy are going to have to make a greater contribution because the reductions in public expenditure are hitting the less well-off more than the well-off. The economist proposes to tax the property of the wealthy rather than their income.

What if both were heavily taxed in order to redistribute the wealth?

Translated by Mike Krolikowski

*Translator’s note : English expressions suggested in the original French version.

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.