Monday, 20 April 2009

Socialists For Small Government?

From Chris Dillow's Stumbling and Mumbling blog:

Shrink the state: a leftist aim, April 17th 2009

David Semple thinks the left should join American tea parties, which protest against high taxes. I think I agree. The desire to shrink the state should be a leftist aim. I say so for four reasons.

1. Big government cannot be redistributive government. If the state is raising 40% of GDP in taxes, it must tax the worst off, simply because the rich, even in the UK and US, aren’t that rich or plentiful.

This pdf gives us the numbers. Table 2 shows that the tax system - leaving aside benefits - actually adds to inequality. This is because direct taxes cut the Gini coefficient by 4 percentage points, but indirect taxes add 5 points to it. And table 21 shows that the poorest fifth of households with children pay a higher proportion of their income in taxes than the richest 10%: 37.2% against 33%.

2. A big state hurts the worst off. Right-wing nut jobs might pose as victims of “ZaNuLabour.” But whether we look at Purnell’s welfare plans, repressive anti-immigration laws or the policing of protests, it is ordinary people who are the real victims of an overly powerful state: newspaper sellers, poor foreigners, the unemployed and ill. The left should be on their side.

3. When the state has lots of power, there’ll be a big fight to control it. And it’s the rich and powerful that win such fights. Why do you think banks get big bail-outs whilst ordinary workers are flung onto the dole with little compensation?

4. Belief in big government rests upon the notion that there’s an elite of leaders which has the wisdom and know-how to manage our affairs from the top-down; this is why New Labour found common cause with corporate bosses - both share the same ideology. But it is an utterly anti-egalitarian notion. It is also utterly wrong.

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