As workers around the world grapple with the cost of living and the fallout from rising post-Covid interest rates, corporations and the super-rich are skimming it.
ANZ Bank is the latest to report eye-watering earnings – more than 2 billion dollars for the past year – as it raises interest rates to force mortgagers to pay more to banks and therefore reduce demand for goods and services, thus reducing inflation.
These new levels of corporate obscenity are an affront to humanity in times of financial crisis.
Finance Minister Grant Robertson offers no defense to the greed of ANZ and other big business. Fortunately, workers are paying the cost of the economic recession; he has no intention of ruling over the corporate vultures.
However, instead of crashing the economy and crushing the rest of us to get inflation under control, we need to get the corporations and the super-rich under control – a excess profit tax would be part of the solution.
US lawmakers like Senator Ed Markey of Massachusetts have introduced legislation calling for an excess profits tax “to protect consumers from profiteering and combat economic inequality.” The Ending Corporate Greed Act that Markey is co-sponsoring with Sen. Bernie Sanders and New York Rep. Jamal Bowman would subject companies with more than $500 million in annual revenue to a 95% tax on profits above their levels earnings from 2015-2019, adjusted for inflation.
This proposed excess profits tax would remain in effect until 2024. The tax would apply to profits, not revenues, and companies that raised prices because they face increased expenses would pay no tax under this legislation. Companies subject to the new excess profits tax, the bill’s sponsors point out, would only be those that raise prices “to further enrich their CEOs and wealthy shareholders.”
European progressives are also pushing for excess profit taxes. The higher prices charged by the corporate giants, they Explain, reflect their “monopoly or oligopolistic power to set market conditions”. Norway, a European country with an excess profits tax already in place, expects the levy to boost tax revenue by up to 50% in 2022.
Why are the big Australian banks the “sacred cows” of our economy?
Why do we just accept public relations from banks when we know that their CEOs’ salaries and bonuses are tied to increasing profits at the expense of their customers?
If Norway can do it and American and European politicians can answer the call, why isn’t anyone here talking about it?
It would be a victory, a victory for the people who struggle the most. More government revenue to spend on struggling social services like health and easing the strain on families in general.
Another idea we should consider is a single wealth tax:
Other progressives on the global fiscal scene have a different but related inflation solution to offer: a “single wealth tax”. These taxes have a long history and, in the years following World War II, led to real tax successes.
During these years, eight different European nations collected time-limited wealth taxes. These levies generally gave the wealthiest in each nation a fixed number of years to pay a one-time tax on their personal wealth. Finland, for example, gave its wealthiest five years to pay a 21% tax on their wealth from 1945. Italy’s wealthiest had seven years to pay a 60% tax on their 1947 wealth .
What’s that moan I hear? Is Grant Robertson hiding in a closet to avoid having to hold the rich and super-rich to account?