The Rankin File: October Archive

#10:

Thursday, 2
October'97

The Case for Higher Taxes and Social Spending.

The expectation remains that there will be a further round of tax cuts in 1999 or 2000, in addition to those already legislated for in 1998. It is no secret that these tax cuts will involve a significant cut to the top (33%) tax rate.
Social democrats have to remake the case for higher taxes. I believe that the tax issue is central to the concept of economic sovereignty. The reassertion of the role of the sovereign (ie the people) as a public "agent of production" - as a provider of public goods and as the landlord of the public domain - may be a prerequisite to the turning rather than just the stemming of the commercialist tide.
Income taxes represent one half of the fiscal contract; a contract that is an implicit social contract. A social wage represents the other half. Social democrats - all who are suspicious of the drive to a system of small powerful governments - should be getting behind the concept of the social wage as the income of the sovereign. As such, they need to openly acknowledge that a less intrusive government overseeing the distribution of a larger social wage needs to levy higher taxes.

#9:

Tuesday, 30
September'97

Why "Cosmopolitan Protection" is Not an Oxymoron.

Protectionist policies - whether the setting of tariffs, foreign investment controls, or foreign exchange taxes - are very much the prerogative of sovereign national governments. Such national policies - if conducted in a cosmopolitan spirit - would only be implemented if, at worst, they did no harm to the world economy. The acid test is to imagine that a policy being implemented by one government is in fact being implemented by all national governments.
Many forms of protectionist policies enhance the world economy and can be correctly labeled as "cosmopolitan" since they may, for example, decrease the opportunities to profit from global financial speculation, increase wages and employment in each nation, and reduce the likelihood (and hence the cost to any nation and to all nations) of business failure.
Cosmopolitan protection can take the world economy from a distant "third-best" (which is the usual outcome of free trade) to a close "second-best". That's as good as it gets in the real world.

#8:

Sunday, 28
September'97

The Case for International Public Goods

In today's selfish and privately affluent western and westernising societies, the concepts of public goods and the need for increasing taxes to fund them are very unfashionable. We cannot provide the international public goods that we need to both prevent and manage the social and environmental crises that characterise the global socio-economy today while we have such a negative attitude to public goods in general and to taxes in particular.
An efficient cosmopolitan economy of the future needs more international public goods, without any erosion of national public goods.

#7:	Friday, 26 September 1997	Adam Smith was an Economic Nationalist
		Chicago political economist Douglas Irwin, the author of Against the Tide; an Intellectual History of Free Trade says: "Smith created such a compelling and complete case for free trade that commercial policy could no longer be seriously discussed without contending with his views.... Smith's case for free trade was based on its being in the national economic interest, not on some cosmopolitan ideal as he was later accused of by Friedrich List and others."

#6:	Wednesday, 24 September 1997	Three New Reasons for a Universal Basic Income
		Under a UBI system, the formula for net income is: Net Income = Gross Earnings less Income Tax plus UBI plus Benefit, where the value of the "benefit" is typically but not always zero. The three new reasons for introducing a UBI in New Zealand are: Economic Sovereignty Compensation Principle Code of Social Responsibility

#5:	Monday, 22 September 1997	The Generation Income Gap
		New Zealanders' gross incomes have increased in the 1990s, but not by as much as GDP statistics would imply. To look at the broad picture, take 1981-1996: Aggregate incomes have risen by 22% which equates to 1.3% p.a., or about 0.3% p.a. per person. Median male incomes have fallen significantly. The incomes of young people have fallen sharply, whereas those of older people have risen. Inequality - has risen markedly for all age groups, for males in all age groups except 25-35, and for young females.

#4:	Friday, 19 September'97	Accommodation Supplements: What a Mess!
		For moderately valued properties, there is no difference in the AS payable, no matter where in New Zealand the recipient lives. Thus a family earning $400 per week, with 1 child, and paying rent of $180 per week, will get an AS of $61.72, wherever in New Zealand they live. Such an Auckland family paying $180 per week is likely to be in a much lower standard of accommodation than a similar family in, say, Wanganui. When a first child is born, the amount of AS payable typically falls. This is not always the case because the maximum AS rises when a first child is born. Considering the same family but without children, their AS would be $52.32 if they live in Wanganui, and $70.12 if they live in Wellington or Auckland. Thus the family, if they live in Wellington, have their AS cut by $8.40 per week when they have their first child.

#3:	Wednesday, 17 September 1997	Can we Afford to Shift the Beehive?
		I am concerned at the extreme fiscal conservatism implicit in the opposition to the proposals; conservatism that comes as much from the Left as from ACT on the far Right. Representative democracy itself is threatened by this economic dryness; we come to believe that it is better to have 100 MPs than 120, and, by logical extension, that 50 MPs are better than 100. The Beehive proposal has two important virtues. First, the implementation of the plan makes it more rather than less likely that "social wage" expenditure will be increased. And second, it is a proposal that has the potential to spark a constructive debate on the true meaning of "fiscal responsibility".

#2:	Monday, 15 September 1997	Contrasting Views of the International Economy.
		Mercantilist policies - called "leadership" by those who stood to benefit from them - overemphasised trade. Where implemented, they served as a recognition that private capital had usurped a significant degree of 'economic sovereignty' over a whole nation. Economic sovereignty traditionally exists at a national level. It did in Smith's time, as it did throughout the "Pax Britannica" of the nineteenth century and the "Pax Americana" of the midtwentieth century. It also exists at an international level. Cosmopolitan political economy exists where the economic relations between nations and the citizens of different nations are regulated by liberal means to maximise the wellbeing of humankind.

#1:	Wednesday, 10 September 1997	Does an Ageing Population mean Increased Dependency?
		Since New Zealand prospered with a total dependency rate of over 62% in the 50s and early 60s, we can prosper with the dependency rates which will be the norm in the twentyfirst century. We can look forward to lower labour-force participation rates as part of the solution, and not as the problem.

Go to Keith Rankin's page

#10:	Thursday, 2 October'97	The Case for Higher Taxes and Social Spending.
		The expectation remains that there will be a further round of tax cuts in 1999 or 2000, in addition to those already legislated for in 1998. It is no secret that these tax cuts will involve a significant cut to the top (33%) tax rate. Social democrats have to remake the case for higher taxes. I believe that the tax issue is central to the concept of economic sovereignty. The reassertion of the role of the sovereign (ie the people) as a public "agent of production" - as a provider of public goods and as the landlord of the public domain - may be a prerequisite to the turning rather than just the stemming of the commercialist tide. Income taxes represent one half of the fiscal contract; a contract that is an implicit social contract. A social wage represents the other half. Social democrats - all who are suspicious of the drive to a system of small powerful governments - should be getting behind the concept of the social wage as the income of the sovereign. As such, they need to openly acknowledge that a less intrusive government overseeing the distribution of a larger social wage needs to levy higher taxes.

#9:	Tuesday, 30 September'97	Why "Cosmopolitan Protection" is Not an Oxymoron.
		Protectionist policies - whether the setting of tariffs, foreign investment controls, or foreign exchange taxes - are very much the prerogative of sovereign national governments. Such national policies - if conducted in a cosmopolitan spirit - would only be implemented if, at worst, they did no harm to the world economy. The acid test is to imagine that a policy being implemented by one government is in fact being implemented by all national governments. Many forms of protectionist policies enhance the world economy and can be correctly labeled as "cosmopolitan" since they may, for example, decrease the opportunities to profit from global financial speculation, increase wages and employment in each nation, and reduce the likelihood (and hence the cost to any nation and to all nations) of business failure. Cosmopolitan protection can take the world economy from a distant "third-best" (which is the usual outcome of free trade) to a close "second-best". That's as good as it gets in the real world.

#8:	Sunday, 28 September'97	The Case for International Public Goods
		In today's selfish and privately affluent western and westernising societies, the concepts of public goods and the need for increasing taxes to fund them are very unfashionable. We cannot provide the international public goods that we need to both prevent and manage the social and environmental crises that characterise the global socio-economy today while we have such a negative attitude to public goods in general and to taxes in particular. An efficient cosmopolitan economy of the future needs more international public goods, without any erosion of national public goods.