Here is a great example of what’s going wrong with the economy world wide. This one is about the US Postal Services that’s on the skids. Well, dead actually. Hoping to get a hefty bailout from the government to try and survive a few more months.
The US Postal Service is government regulated. It has one particular nasty law that states:
The law prevents the post office from raising postage fees faster than inflation.
At the same time the Post Office has labour contracts that have long guaranteed no layoffs to the vast majority of its workers. And management agreed to a new no layoff-clause in a major contract last May.
In a nutshell. Can’t cut cost and can’t raise prices. The end is nigh.
It’s the very same problem facing governments of countries. Of course most of them like the UK are in a major cutting mode. Mostly services that make life easier will be shut down by Govt who hopes that the people will take the slack. Help themselves so to speak.
But where’s the increase in revenue? Taxes for the wealthy or for companies. Higher luxury goods taxes for instance such as alcohol, 5 star hotels, first class travel, luxury motor vehicles. There is more than one way to get the filthy loot out of the wealthy 1% of the population who own about 40% of all wealth, globally. Or more shockingly in the USA the top 20% own 92% of all wealth.
Using the same tax system across the board, as happens in most cases of a tax systems , the middle class is the group of folk who carry the bulk of the tax burden. Remember that taxes were first introduced to get money out of the ordinary folk to pay for excessive spending by monarchs or the church. Not much has changed since then.
It’s shown again and again by the determined manner in which the Inland Revenue folk hunt down ordinary folk to make sure they pay their last cent in taxes. Yet the wealthy are able to hide their income by paying their cars through companies, taking their holidays as business trips, newspaper subscriptions through the business, clothes expenses hidden as uniform purchases, that case of expensive scotch as Xmas gifts to customers and the list goes on. I’ve done it as accountant for a company. Easy.
That tax system needs to change to make sure that revenue is collected from the wealthy. High taxes on luxury cruises, ski trips, high end clothing etc will be more appropriate than trying to tax their ‘salaries’. They don’t earn anything.
There has to be an entire mind change in terms of taxation. And of course all of this can be implemented. The VAT system in the UK for instance is incredibly sophisticated with exemptions, scales and variations that could make anybody’s hair stand on edge. What’s stopping the UK from introducing a 50% VAT rate on first class train travel, expensive entertainment centres, art work etc. And yes there is already a high import tax paid on many of these items. But there’s no reason why not let that 20% population that owns 90% of all wealth pay a bit more.
Well, you might ask yourself, why should they. It’s capitalism. It’s reward for risk takers, hard work, innovation, the American dream and a lot more reasons why the wealthy should be entitled to their spoils.
Sure. But when it involves stealing from the general population it’s a bit different. The CEO’s paying themselves 17% more this past financial year while retrenching the workers at a rapid rate are doing just that. If Apple’s past CEO could pay himself $1 per year because he considered his wealth to be sufficient then surely the rest of the greedy big shots can do the same.
Regardless of the little man as that’s not really the point here. The point is that if Governments want to be able to balance their budgets they have to do two things. Bring in more revenue and cut costs. Only cutting costs means that the poorer folk in the system are harmed again and the wealthy folk sit pretty.
Not a good system. The Arab world’s uprising will not be the only one. There are already demonstrations in several non Arab countries. Spain has had some and more recently Israel has had it’s streets full of people asking why their cost of living is so high and their standard of living is falling. And yet they are working as hard as ever.
These demonstrations have nothing to do with lazy, unmotivated, scum of the earth type of folk. This is all about ordinary citizens seeing the world go to the wealthy and their lot getting worse. The Greeks in particular have seen a Govt system where the ordinary folk pay taxes and the upper echelon swims in money. No wonder they are angry.
There will be more and more angry people out there. A French Revolution in the brewing. It’s just a pity that as history tells us one money grabbing regime is always replaced by another money grabbing one. It just gets a different name with a new bunch of people who have spotted the opportunity of being able to the top of the money tree by riding the wave of the ordinary people.
Same ol’ Same ol’. Pity us ordinary folk are always so willing to abdicate our power to somebody who stands up and says they will do it for us. We almost deserve to get nailed by the ruthless top order. Almost.