The reform I propose, both in child protection and in wider social services, comes with a high return on investment in the long-term. (You can get a sneak peek at what I write about that in the book ‘The Trauma Root of Social Work: Beyond the Trauma Wall’ here: https://florencekoenderink.substack.com/p/return-on-investment-of-breaking) However, like all reform, in the short-term, investment is required for capacity building and service development. This will reliably raise an outcry of ‘it is impossible’, ‘where would we find the money?’ etc. This is understandable under the current attitude to the economy that seems to see people as a drain, which the economy needs to be protected from, and corporations and ultra-rich individuals as benefactors that must be protected and supported.
Challenging this attitude is a kind of radical reform in its own right. It is one that makes a lot of sense and creates a lot of financial room in national budgets due to its high return on investment that starts the moment action is taken based on the reversal of this belief. It is a hard sell, though, to propose taxing big business and the rich. Even though they currently, although they are in higher tax brackets, tend – in practice – to pay a tax rate considerably lower than those in the lowest tax bracket.
The current thinking starts from a sensible enough position: businesses are at the foundation of our economic model. Through the investment, trade, salaries, and taxes generated by businesses, money circulates through a society and makes up the economy, as well as generating that income for the government that funds its budget. The next step is also still reasonable: it is not easy to start or maintain a business. There are many risks involved. Therefore, to ensure that people are willing and able to start and run businesses, various forms of support, tax credits, and write-offs are provided to encourage and stimulate business. For our current economic model to work, it is absolutely true that without these incentives many small and medium-sized businesses would not be able to start or survive.
It is the next step where things go off the rails. First, let’s go back to the other side of the equation: people as a drain on the economy. Whenever social security and social protection are mentioned, there is a lot of wringing of hands and gnashing of teeth. ‘Yes, of course we want to protect the most vulnerable, but it is sooooo expensive. We have to be sensible and not bankrupt ourselves in the attempt.’ And so there are caps on things like the number of children or members in a household eligible for a particular benefit, the number of years – or just months – that someone can claim support in case of unemployment, disability, etc. Because ‘we don’t want things to get out of hand’ and we need to keep in mind how much it all costs. What we apparently do not need to keep in mind is the long-term, significantly increased cost of pushing individuals and families into poverty and a whole range of associated crises.
But more than that, what we should really not think too much about is the cost of all the support and tax benefits available to extremely big and profitable businesses and corporations, and ultra-rich individuals. Yes, small and medium-sized businesses need these to be able to keep their head above water. However, once a business’ profits run into the tens, if not hundreds, of millions, I really don’t think they are going to be destroyed if their business lunches are no longer tax-deductible.
When I am talking about taxing big business and the 5-10% of richest individuals, I am not even talking about progressive tax – often seen as a punishment for entrepreneurship. I’m not opposed to progressive taxation, but I do not think there is even a need for that. That is, IF we start to make businesses with profits of say above 50-100 million euro/dollar/pound actually pay the entirety of the lowest tax rate in the country, the same tax rate for which people on minimum wage can get no exemptions or deductions.
Instead of capping the number of children or months when it comes to providing benefits that would make a very significant difference in the quality of life (as well as economic activity) of households in vulnerable situations, why don’t we put a cap on the amount of wealth/income/turnover (take your pick) after which an individual, business, or corporation is no longer eligible for tax cuts, write-offs other than for the most basic necessities of operating their production or services, or other loopholes? Taking this simple step, just making high net worth individuals, businesses, and corporations pay the full lowest tax rate, would vastly increase government income and budgets.
These budgets would comfortably cover basic services such as free healthcare and education, accessible and affordable community services, and daycare. It would also have plenty of room for uncapped child benefits, disability and unemployment benefits, or better and more cost-efficient yet: universal basic income. All of which has been shown to come with solid return on investment due to significant reduction of escalating problems with high costs to society. It will also provide a healthy budget to invest in the reform needed to break down the trauma wall in all sectors, which again, in the long-term will provide a significant return on investment. The return on investment on all of these points is not just a slight decrease in overall cost, it is a significant reduction – in some cases to the point of near elimination – in homelessness, addiction, school drop-out rates, unemployment, crime, mental and physical health problems, violence, child protection concerns, in short, all the greatest burdens on the national budget.
It is a worthwhile and lucrative step to take for governments. Now we just need to break down the trauma wall of the outcry and outrage that will be provoked by such a suggestion. Will you do your part in that?
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