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Tax the rich to counter carbon emissions not to get their money

Wednesday snippets follow. Tax the rich! That has become a misguided progressive Left mantra. The intention is to maintain public services including health, education and income support which are core issues for progressives. But then the neoliberal indoctrination that has infested this group intervenes. They seem to think the government needs the money of those with lots of it before it can provide essential and progressive public services and fight the climate emergency. They support political parties that set as their primary macroeconomic target the achievement of a bigger fiscal surplus than the conservatives at a time when there are more than 13.5 per cent of available and willing labour resources not working (either unemployed or underemployed) and households are carrying record levels of (unsustainable) debt. And these parties keep losing elections – it is a global phenomena, most recently observed in Britain. One of the reasons we need to tax the rich is to deal with their (grossly) disproportionate impact on carbon emissions. That is one of many reasons. But you should never include among those reasons a need by government for their cash in order to facilitate spending. Any progressive who articulates that argument is just reiterating neoliberal frames.

This is why we want to tax the rich!

All the ‘world leaders’ as they like to style themselves are in Davos at present at their annual talkfest which will yield nothing of any value to the rest of us.

I was re-reading an Oxfam report that was released on December 2, 2015 today – Extreme Carbon Inequality – and it has two graphs which tell us why we need to tax the rich more.

The answer is that we need to tax the rich more not because we want the government to get their money in order to spend more, but, rather, to stop the rich using it.

It is about a drain not an injection of funds into the economy.

The first graph shows the “distribution of global income from the richest to the poorest 10% of people globally, and Oxfam’s estimate of their associated lifestyle consumption emissions as a share of the global total”.

As a matter of clarification, the terminology used by Oxfam is a little misleading. When they talk about the richest and poorest they are not talking about wealth holdings here.

Rather, the ranking is in terms of place in the income distribution (which is different).

A person can have a high income and not be ‘rich’ and vice-versa.

But we can cut them some slack for that error and just read the graph in terms of high and low incomes rather than ‘rich’ and ‘poor’. After all, we are primarily seeking to impose higher taxes on the incomes of those at the top of the distribution.

We could, of course, also be seeking to impose a wealth tax, in which case, the mantra ‘tax the rich’ is apposite.

Oxfam write:

Global total household consumption emissions in 2007 were 17,187,821,112 tCO2. The top 10% richest people globally have per capita emissions of 17.60 tCO2 and total emissions of 8,431,448,890 tCO2, while the bottom 50% poorest people globally have per capita emissions of 1.57 tCO2 and total emissions of 1,791,265,686 tCO2. The average per capita emissions of the top 10% are therefore around 11 times higher than the average emissions of the poorest 50%, and the total emissions of the top 10% are nearly 5 times higher than the total emissions of the poorest 50%.

And here is their Figure 2, which reinforces that message – “the richest 1% may emit 30 times more than the poorest 50%, and 175 times more than the poorest 10%”.

And: “What is more, the poorest half of people on the planet live overwhelmingly in countries that are considered the most vulnerable to climate change.”

So the actions of the “‘have’ hits the ‘have-nots’ the hardest’. These inequities span income cohorts, gender, race, and nations.

Redressing those inequities has to be a central part of any Just Transition strategy.

You can read the – Technical Briefing – to see how the data shown in the graphs were constructed.

So apart from wanting to stop the rich spending money on self-interested political lobbying and all the rest of the power grab stuff, denying them some of this ‘carbon-intensive’ consumption would also be a help significantly.

That is why we should be supporting politicians who will tax high-income earners considerably more.

It is not to get their money in order for the government to spend on better surfaces.

Any progressive who runs that line really disqualifies themselves from further commentary.

Green Transition presentation, Adelaide, January 10, 2020

Here is the presentation I gave in Adelaide, where I briefly outlined a new initiative that I am part of that aims to do something about those inequities.

I will make further statements about that initiative in the near future. I think it will be significant.

I told the audience that a new initiative was needed because our mainstream political parties were moribund and were stuck in a neoliberal vortex unable to do anything truly progressive and urgent.

In the Q&A, I was attacked by Labor Party apparatchiks for allegedly “dividing the Left” because I indicated I would not be seeking to work within the conventional Labor Party framework.

It is a typical sort of reaction one gets these days. But the reality is that the Labor Party has consistently lost elections and in May last year lost to the worst conservative government we have ever had.

The Labor Treasury spokesperson has spoken on national radio saying the Party would not consider increasing the unemployment benefit, which is way below the poverty line, if it endangered their fiscal surplus objective.

One of its senior MPs (Fitzgibbon) “joined forces with outspoken Coalition MP Craig Kelly to spruik Australia’s coal exports in parliament” (Source).

He also wants Labour to adopt a weak emissions reduction plan in line with the conservative government’s own plan, which is largely reflective of their climate change denial bias.

Craig Kelly was the conservative buffoon that appeared recently on the BBC and called out “brainwashed climate cultists” (Source).

During the BBC interview, Kelly called a British meteorologist, who has several university degrees in relevant fields, a “Pommy weather girl”.

Further, in 2017, it was revealed that the bosses in the Shop, Distributive & Allied Employees Association (SDA), which represents low pay and precariously employed shop assistants and is a powerful force in the Labor Party right-wing faction, was found to have done deals with the large supermarkets and fast food chains that would undermine the minimum pay and conditions for 60 per cent of the workforce.

The Australian Workers Union, another right-wing contributor to the Labor Party sides with the SDA.

Millions of dollars in lost wages went to the companies under these dirty deals. The employers had agreed to allow the officials of the SDA to use payroll services etc which made their jobs easier and presumably gives their union the fees necessary to pay the officials their managerial salaries. Meanwhile, they are content as the concession to sell their members down the river!

I could go on.

Not dealing with this lot is apparently “dividing the Left”. In fact, our initiative will identify the true Left.

Later, a response to my presentation appeared on social media, where I was attacked by a normally progressive voice for proposing an “idiosyncratic political approach with MMT more broadly” and “if the broader MMT community listened to and followed his political strategy it would be dead in a week.”

This was just a reflection of the fact that I won’t deal with marginal lobby groups in Australia who purport to lead the progressive charge.

One such group displayed their incompetence at the last federal election when they spent millions targetting so-called ‘right-wing conservative MPs’.

Their campaign was so pathetic that three of the worst conservative politicians were re-elected as a result, in part, because of the resentment of the respective electorates to the lobby group’s campaigning strategies.

One MP felt a swing of -0.28 per cent (that is, nothing), another -1.37 (small) and the worst of the MPs targetted, classified as the most ‘unpopular’ politician in Australia (Peter Dutton) gained a 2.95 per cent swing towards him.

To illustrate the confusion these groups elicit, this same group has signed up to another so-called progressive group and they advocate increasing taxes on higher income groups to pay for the services we deserve. Meanwhile, in another guise, they hold themselves out as promoting MMT.

So why would anyone who seeks to promote Modern Monetary Theory (MMT) to the broader population leave our work in the hands of groups like this.

As to the the “idiosyncratic” nature of our new initiative, let me just say that my research group (CofFEE) has formed a collaboration with a major, global climate action group (350.org) and the leading voice in indigenous affairs in Australia (Noel Pearson and his Cape York Institute).

Noel Pearson, is the highest profile indigenous leader in Australia. He was the lawyer that helped secure land rights for indigenous Australian’s which was a huge significant turning point in our history. He is highly connected.

Add to that group, the leading ecological economist in Australia, a high profile sociologist and support from a senior climatologist and others and we have put together a powerful and connected MMT-underpinned action group.

How idiosyncratic is that?

We will release more information in the coming weeks as our program takes shape.

My first presentation at the Adelaide conference (January 9, 2020)- Introduction to MMT presentation – is not yet available it seems.

European and UK Teaching and Speaking Tour, February 2020

  • Monday, February 03, 2020 – Speaking on ‘What is the meaning of political economy today?’ at Think Corner, Helsinki – 17:00 to 19:00.
  • Tuesday, February 04, 2020 – Teaching, University of Helsinki – 16.15-17.45 Porthania P674 – all lectures are public.
  • Wednesday, February 05, 2020 – Teaching, University of Helsinki – 10.15-11.45, Language Centre in Fabianinkatu room 207.
  • Thursday, February 06, 2020 – Teaching, University of Helsinki – 10.15-11.45 Main building, Hall 16.
  • Friday, February 07, 2020 – Presentation at Italian Parliament, Rome – details to follow.
  • Saturday, February 08, 2020 – Events in Rome with activists – details to follow.
  • Sunday, February 09, 2020 – Travel.
  • Monday, February 10, 2020 – Breakfast presentation – ‘The future of monetary policies’ – Nordic West Group, Helsinki.
  • Tuesday, February 11, 2020 – Teaching, University of Helsinki – 16.15-17.45, Porthania room 723.
  • Wednesday, February 12, 2020 – Teaching, University of Helsinki – 10.15-11.45, Language Centre in Fabianinkatu room 207.
  • Thursday, February 13, 2020 – Teaching, University of Helsinki – 10.15-11.45 Main building, Hall 16.
  • Friday, February 14, 2020 – Presentation, Dublin.
  • Saturday, February 15, 2020 – Presentation, Dublin.
  • Sunday, February 16, 2020 – Athens.
  • Monday, February 17, 2020 – Meetings and Presentations, Athens.
  • Tuesday, February 18, 2020 – Paris, Reception, French Senat, Palace of Luxembourg – 18:00.
  • Wednesday, February 19, 2020 – Paris, events and interviews – details to follow.
  • Thursday, February 20, 2020 – Paris, Presentation to French Senate Commission, Palace of Luxembourg – 8:30-10:30.
  • Thursday, February 20, 2020 – London, GIMMS presentation, MMT education – afternoon – Details.
  • Friday, February 21, 2020 – Manchester, GIMMS presentation, The Harwood Room in the Barnes Wallis Building, University of Manchester, Details.
  • Saturday, February 22, 2020 – MMTed Masterclass Workshop, London, for Details and Tickets. Limited spaces available.
  • Sunday, February 23, 2020 – Amsterdam – travel home.

This tour is fully booked. I will be back in Europe in June-July 2020. If you want to book an event or a meeting, then please contact me.

Music today …

Here is one of the all-time great reggae bands – Steel Pulse – a band from Birmingham, UK.

This song – Ku Klux Klan – is taken of one of my favourite albums – Handsworth Revolution – which was released in 1978.

The band sings in this song against racism and intolerance.

Just listen to the hi-hat and timbales in the introduction for musical perfection.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

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    This Post Has 7 Comments
    1. The answer is that we need to tax the rich more not because we want the government to get their money in order to spend more, but, rather, to stop the rich using it.

      I agree with this, but the link to carbon consumption is indirect. The relationship between disposable income and energy use intensity is not demonstrated in the report you linked to. In fact, one striking observation that emerges is how different rich Americans (top 10% US income earners) are from everyone else. Their carbon consumption is double that of the next highest country’s rich (Canada). If we found a way to change their ‘carbon lifestyle’ to that of Germany’s top 10% (for example), that would represent an annual reduction of 900 million tonnes of CO2 pumped into the atmosphere.

      But would a tax increase be the best means to achieve this? The report does not show that.

    2. @ dnm

      I haven’t read the Oxfam report (being content to rely on Bill’s paraphrase and their charts which he cites).

      But your comment strikes me as very cogent. I agree with you that issues around taxation of the wealthiest need to be kept separate from issues around global warming/carbon emissions, otherwise the door is opened wide to endless fruitless arguments which just go round in circles.

      Taxation is a whole subject in itself. And I note that Bill himself rebuked (mildly but, I agree, justifiably) some of us for suggesting that MMT ought to espouse a land tax as part of its agenda – on the grounds that MMT (as a lens), and issues about tax-structure, each belong in separate compartments.

    3. “Not dealing with this lot (mainstream liberals who think in a neoliberal frame) is apparently ‘dividing the Left’. In fact, our initiative will identify the true Left.” Truer words have rarely been spoken. This is all the more reason why MMT needs to reach the young, who are naturally filled with both energy and a sense of agency as they prepare to launch themselves into the world. Unless they come from a wealthy family, they know that the most formidable obstacle they face in living a meaningful life in today’s neoliberal society is money, their lack of access to it to pursue their dreams without simultaneously killing those dreams by incurring massive debt as they come of age. So if the young could be schooled in the axioms of MMT (just the basics would be enough), they would clearly understand that their personal futures are being short-circuited by an inaccurate interpretation of what money is and how it operates or could operate or should operate. Such an education program, if sufficiently successful in flooding social media, etc., would indeed divide the left–between the young with open eyes and the old whose vision has already failed. Which is not to say that older MMTers (like Bill and many of his his readers) will not always remain young at heart and fight with newer generations for their futures and that of the entire human race, including the precious, precarious ecosystem of which humanity is but one (presently pernicious) part.

    4. Great blog.

      Nowadays, I keep getting the feeling that, at some point, money stops being representative of any work when it gets to the higher end. (not that it accurately reflects people’s contribution even at the low scale either but put that point aside).

      Its like you have found some exploit in some video game that lands your character ridiculous amount of in-game currency.

      Except in games, game designers (provided not brain-dead) would actually patch these exploits out. In real life, we run excuses and let these exploits collapse society and the environment!

      The irony of it.

    5. The idea of per capita energy consumption is an interesting concept to find another way to tax the rich. Will the top 1% stop flying in their private planes if they have to pay a bigger tax on their multi-million dollar incomes? If you want them to reduce their “carbon footprint,” how high does an income or wealth tax on these people have to be to change global warming to any meaningful degree? Also, the biggest carbon polluters are countries like China and India whose carbon footprint is expanding dramatically. If you succeed in reducing that carbon footprint will the poor in those countries be better off? There is a need to prioritize meaningful solutions to global warming.

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