MONEY IS WASTED ON THE RICH

Adam Smith basically set out that, for wealth to work, money had to be productive. John Maynard Keynes expanded on this, but the principle idea is the same.

The rich became richer by ensuring their wealth worked hard for them and in so doing its effects worked down through the economy for the benefit of everyone. Taxation, over the years had also evened out the inequalities.

Let's take a quick look at why taxation is for the common good of our society.

Taxation should be used for maintaining the past and investment in the present and future. You and I as individuals cannot afford to build the roads that we use; the infrastructure that surrounds us; the hospitals, libraries, schools, the police and the myriad of other things we take for granted. That is the basic reason why we have government. It is also why we pay tax. Just to function and survive we need the centralised systems that enables all of us to contribute to our well-being.

The tax structure allows the poorest of our society to contribute the least, because they are the least demanding of the system. The more earnings and wealth one has the more one uses the economic structure.

The boss of a small company may feel that he is using the same core structure as his lowest paid employee; he isn't. The employer needs the system that helps his employees to function and turn up for work which in turn allows the firm to flourish. So higher taxation for the higher earners is not only economically sensible but also ethical. The richer a person becomes they'll use a greater share of the economic infrastructure.

As Adam Smith said the wealthy had to make their wealth work hard so that in turn it benefited everyone. It could be a bigger home; a mansion or castle even. It would need staff, furniture and services; the trickle-down effect.

Investments in pension funds, stocks and shares have similar end results so should be subject to taxation. I believe that even if a richer person subordinates their wealth management to others they should at least pay the same tax, certainly not less, as someone who earns all their income by way of employment. There is a good argument that in fact they should pay more as was the case in the past. Financial investments technically involve using a far greater share of the cummunal infrastructure.

Taxation doesn't destroy wealth. People destroy wealth. The rich continued to become richer when taxation was as high as 98% in the last century. In reality more people became wealthy as a percentage of the population when taxes were at their peaks.

Today we are seriously threatened by a new economic model that has taken hold and will quite likely bring and end to life as we know it. The seeds of destruction have already been sown and we can only wait for the total economic Armageddon to take hold. In my view quite possibly by the end of 2012. If it does more than 50% of the Earth's population will be dead by 2015. I will be one of the first. My neighbourhood, like your's will also have succumbed within a year or so.

The reason is that basic morality disappears these days when it comes to money. Too many individuals suddenly feel they no longer have obligations and responsibilities once they start becoming better off.

The ultra of this thinking is Neoliberalism, a selfish economic model that has taken a grip of most economies. It is not only about small government and low taxation. Neoliberalism is about making money make money for money's sake. To Hell with the health and education of the masses. To Hell with policing. We can afford our own. Neoliberalism is about short term gain purely for the sake of it. The masses are to be used and ultimately abused just to make money.

The real problem is that the money is not effectively economically used once made. It is recycled back into its own uneconomic vortex. Evading taxes is the mainstay of Neoliberalism, hiding wealth in unproductive bank accounts in tiny island tax havens whose own populations often live in poverty.

It is not just individuals that evade tax, corporations; especially multinational ones evade tax in a manner that is hard to fathom. Corporations only exist because of the infrastructures built over centuries of social investment. They couldn't operate without them yet wish to avoid contributing towards them.

It is estimated that more than trillion dollars of taxation is avoided every year across the world; £120 billion in Britain alone.

What is Britain's and the US's governments answers to this? Tax the poor. Cut services to the poor. Hurt the poor. What is the IMF and World Bank's answer to these sort of problems? Exactly the same.

Neoliberalism also means stealing the communal silver and selling it cheaply to their wealthy, tax evading friends.

What have those wealthy, tax evading friends of Western governments done?

They invested it 500 times over in economic Armageddon.

When Greece decides to default on $50 billion of debt (probably in March), investors, most not even Greek bond holders, will look for a payout of between $150 billion and $1 trillion because they bought Credit Default Swaps from banks and financial organisations that never believed a Eurozone country would ever default.

Every bank in the world will collapse. Money will cease to exist.

That is Neoliberalism for you.