Recently I posted about Warren Buffett’s call for increased tax, “of course” including capital gains, on America’s most wealthy. The wealthy elite in Europe are now joining Buffett in these calls, why? Maybe it’s because they know the truth, they know that the world is likely to enter another global recession, and they know the risk this will bring to social cohesion, which they rely on for maintaining the lifestyle they enjoy.
They know that the figures released today showing worse than expected manufacturing results from the Eurozone point to bigger problems on the horizon. They know societies and social cohesion will slide if inequality is not addressed, they know they’ve had a good run over the last thirty years, and now they know they have to be part of solving the impending crisis.
In an interview with Deutsche Welle Dieter Lehmkuhl, the head of German group called the ‘Initiative of the Wealthy for a Wealth Tax”, spells out why increasing taxes on wealth is important:
It’s not that people now have become so rich and earn more; they have just changed the rules of the game. Even in the 1970s or the 1950s, income taxes to the highest [earners] were almost 70 percent, and in the United States it was 90 percent. These tax reductions [since then] have almost completely privileged the rich. The consequence of this is an increasing gap between the rich and the poor. It’s not tolerable for a society because it destroys the social matrix.”
The Economic Times is also reporting the growing support among wealthy elite from other European countries for higher taxes:
The multi-millionaire chairman of Ferrari, Luca di Montezemolo, backed Buffett’s idea in an interview with the Rome daily La Repubblica. “I am rich and I am ready to pay more taxes, for reasons of fairness and solidarity,” Montezemolo told the newspaper.
This month, 16 of France’s wealthiest people, including the chief executive of the energy giant Total and the L’Oreal heiress Liliane Bettencourt, signed a petition published in the magazine Le Nouvel Observateur urging the French government to tax them more. Other signatories were the chief executives of Societe Generale, Airbus and PSA Peugeot-Citroen.
Clearly there is a desire to solve the social and economic problems within their countries with a collective hand, where everyone shares the burden.
So, what do the wealthy elite of New Zealand know? It seems like the most pertinent question of all right now, and it is quite difficult to discern a rational answer. Before clawing into them however, we must remember that New Zealand is not a country in the Eurozone, and nor is it the 51st State of America. That does not mean we are not at risk of the impending crisis however, and it does not mean that we should abdicate our responsibility to future generations. It seems inevitable that New Zealand will adopt a Capital Gains Tax sooner or later; sooner if Labour is elected, slightly later under National who will no doubt be forced to introduce some form of it should we enter a severe recession after we’ve sold all our assets.
So to those out there who are so ideologically opposed to a capital gains tax; why not here? Why are we the exception? What will become of our society if inequality continues to grow and we refuse to tax the capital gains of those who can afford to make them?
New Zealand is a country full of good people, and this issue shouldn’t be about the masses targeting the wealthy few by prying (mostly) hard earned money from their hands. We can see that isn’t the case by the quotes above. This is about coming together as a modern & developed society and identifying the issues we’re about to face. It’s about coming together and solving these issues as one collective group, where we all play a part in the extra effort and we all benefit from the result; a civil and equal society.
We must act, it would be great to find a bipartisan way forward for our economy, but it seems ideology is blinding some of us to the difficult realities we’re about to face.