IMF: Raise Taxes on the Rich, Lower Taxes for Everyone Else

Interview

Historically, the International Monetary Fund (IMF) argued for lower taxes for everyone, particularly those that need it the least: the wealthy. Due to increases in multiple forms of inequality since the last global recession the IMF has changed its tune. The institution now calls for countries around the world to implement a wealth tax while lessening the financial burden on workers through tax breaks. They argue that by doing so we can fend off a global depression.

For individuals, the IMF encouraged slashing payroll taxes as well as cash transfers to help those hardest hit with job losses or other circumstances.

The IMF’s recommendation for a wealth tax marks a stark turnaround for an institution that long pushed tax cuts as a central element of its policy menu for developing nations. It serves as a lender of last resort to countries in dire financial straits.

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Caring About the GDP is Passé

money

In 2009 we looked at how Bhutan uses Gross National Happiness instead of the bizarre Gross Domestic Product (GDP) measurement to see how “successful” the country is. The GDP doesn’t reflect lives lived since things like oil spills and other disasters actually make the GDP go up despite the damage done. GDP is disconnected from reality.

Now, in the UK people want the government to care more about health and well being before upping the GDP numbers.

“It’s clear the vast majority of the public think we should worry more about people’s health and wellbeing than economic growth,” said Fran Boait, the executive director of Positive Money. “The government must not be tempted to pursue policies that would boost GDP at the expense of lives, wellbeing and the environment.”

In a report entitled The Tragedy of Growth, backed by politicians from several parties, including Clive Lewis of Labour, the Green party MP Caroline Lucas, and the former Conservative environment minister Lord Deben, who chairs the committee on climate change, campaigners call for a shift away from GDP as the government’s core measure of success.

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Amsterdam: The Economy is a Doughnut

coffee and chocolate

Amsterdam is embracing an ecological approach to their economy by looking at it as if it’s a doughnut. Of course, it’s not a literal snack they are using, it’s a metaphor to visualize how different aspects of life interact with each other in an economic model. Classical economic models assume there’s always an external source of input and an external output where waste can be dumped (like the sea, air, landfills, etc.); but ecological models take into consideration the whole economic system. As a result these doughnut models capture reality much better since it’s no longer possible to socialize the costs of waste from running a modern economy.

“Within these two boundaries, between the social foundation that is on the inside and the ecological ceiling, there is this doughnut-shaped space where it is possible to meet the needs of all within the means of the living planet,” says Ilektra Kouloumpi, a senior strategist at Circle Economy, a nonprofit that has been working with Raworth, along with the nonprofits Biomimicry 3.8 and C40 Cities, to help the Amsterdam government adopt the doughnut model to make policy decisions. “The overarching question is: How can our city be home to thriving people, in a thriving place, while respecting the well-being of all people and the health of the whole planet?”

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Amazon VP Resigns to Protest Poor Working Conditions

happy workers in a factory

Amazon has grown from an online book retailer to the seller of all things and destroyer of established businesses. It also treats humans like robots and gives them no respect while also dismissing human concerns like good working conditions and a breathable atmosphere. The lengths of which Amazon has gone to disrespect workers, the environment, and a decent of morals has led Tim Bray to resign from the company. This is exceptional.

In an open letter posted on his website he outlines all the reasons he left. He ranges from Amazon’s horrendous treatment of workers to the company’s disrespect of environmental concerns. It’s a scathing letter written by a highly respected individual. It’s quite rare for somebody at this level of a company to resign in this fashion and hopefully others will follow his lead.

Amazon’s strategy throughout the coronavirus crisis has been to fire dissenters and disparage them both in the press and behind closed doors. There have been dozens of confirmed coronavirus cases at warehouses around the country, and workers have repeatedly said the company isn’t doing enough to protect them. Last week, Amazon ended a program that allowed workers to take unlimited unpaid time off if they fear getting sick from the coronavirus. Last Friday, Amazon workers together with Target, FedEx, Instacart, and Whole Foods workers, went on strike to protest their working conditions.

In his resignation letter, Bray said that “firing whistleblowers isn’t just a side-effect of macroeconomic forces, nor is it intrinsic to the function of free markets. It’s evidence of a vein of toxicity running through the company culture. I choose neither to serve nor drink that poison.”

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Unions Bring Big Benefits to California

Foodora work

If you work in a unionized environment you’re likely doing better than a person in a non-union environment according to a study done in California. You’re also less likely to make use of the state’s welfare system. What’s more this means that the whole state benefits from unions as more economic activity is happening as a result with less costs imposed on the social welfare system. The pandemic has really made it clear that unions can make a big difference in how workplaces react to the economic troubles.

  • Workers covered by a union contract in California earn an average of 12.9 percent more than non-union workers with similar demographic characteristics and working in similar industries.

  • Overall, we estimate that unions increase workers’ earnings in California by $18.5 billion annually through collective bargaining.

  • Unions decrease by 30.6 percent the likelihood that a worker is in a family where at least one member is enrolled in a public safety net program, compared to non-union workers with similar demographic characteristics and working in similar industries.

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