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Op-Ed: Rising prices vs tax cuts — Who benefits most, the gougers or the gouged?

Tax cuts will have no impact whatsoever.  

People in a shopping centre. Image; © Tim Sandle
People in a shopping centre. Image; © Tim Sandle

The global cost of living crisis has entered a sort of doom spiral. In the face of blatant and rampant price gouging, the default remedy seems to be to cut taxes for the gougers.

Those taxes pay for services, or at least the services you used to get, and haven’t got for decades since privatization began. The IMF says rather innocently that the “resilient” global economy is limping along.

Somebody ought to ban the use of the word “resilient”. It often means “huge numbers of people being hammered by a situation that should never exist” in most cases.  

Tax cuts, however, are a never-to-be-disputed remedy for practically everything. Nobody argues with them. It’s the one expression in the English language that even American Republicans can usually spell correctly.

The result of cutting taxes is that you get holes in the road, massive deficits, and failed health systems, and you pay for it out of your own pocket. Taxes are a way of sharing costs, but that’s socialism and that’s wrong and you’re a moron for wanting to pay so much less.

So there. Actually, most countries had a lot of public services that simply maintained a realistic cost base for everything from electricity to water supplies and schools, but who needs those?

Meanwhile, people who pay no personal taxes at all are doing nicely. Tax cuts ironically help tax evaders, reducing their theoretical liability. The net benefit to people drowning in the cost of living is almost nothing.

The “saved” money disappears into private equity and eventually ends up being loaned to other people. During the days of very low rates, you borrowed at almost nothing and lent at credit card rates or a little less. You couldn’t avoid making billions.

They did make billions. They bought up assets and now they’ve decided to charge the world a lot more for the sake of sending you broke and them making a little more money.

You’re paying for it. The next few generations will not be able to afford anything worth having, notably decent lives. Happy, geniuses?

Wages never even pretend to keep up. They’re grudgingly allowed to go up in fractions of real costs. The few bucks you might not pay in tax have already gone to higher prices in the future.

It’s odd how nobody ever questions this endless dilution of their own wealth. You often hear how a million back whenever is worth a billion now. It’s actually quite right. Prices now are that much higher, particularly in the sacred property market.

The property market has already caused one economic catastrophe this century. Looks like it’s about to cause another, but who cares about having a place to live, or enough money to eat, or other such trivia? As long as The Handmaid’s Tale and FOX News survive…?

The next heavily and ridiculously rationalized financial fecal hurricane to come is likely to decimate private assets, even for the very rich. The gigantic American property market is a core asset for so many banks, private equity, and credit providers. If it goes, so goes everything else.

Commercial property is already a basket case. That’s not the major problem. People are getting priced out of the housing market too, by HOA fees, property taxes, and simply managing costs. Sales in 2023 were the lowest in 28 years according to CNN.

That was also when the Big Gouge began to really bite hard. There’s a lot of debt in this market, and if it goes, bank portfolios go with it. The issue is overexposure to an increasingly creaky market.

If a major US housing crash happens, it could make 2008 look like a baby shower. The subprimes were basically about fictional loans and fraudulent lending practices. This time it’s about real property and real money.

The way business is done tells you a lot about who’s doing business and who they’re doing business for. People, or so-called people, mainly criminals, do make a lot of money out of creating poverty in every way imaginable. How naïve do you have to be to think they’re not in all forms of finance? Never mind where the next buck comes from or who it comes from. Never mind whether anyone can eat or have somewhere to live today or tomorrow.

The “choice” for real people is to somehow keep believing that your totally inadequate resources will be able to cope. Interest rates might come down. Prices won’t. A decent education might be affordable. No, it won’t. Housing might be affordable. No, it won’t. Healthcare might be affordable. Not since the 1980s. Even hospitals are going broke, while charging those insane prices.

If a major hit happens anywhere in housing, healthcare, or just basic cost of living, the Big Gouge will be meaningless froth on a small beer. Tax cuts will have no impact whatsoever.  

Any other bright ideas?

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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.

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Editor-at-Large based in Sydney, Australia.

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