For the People: Tax Corporate Profits

No matter who we are, where we live, or what we do, everyone should have the resources they need to build the lives they want for themselves and their families.

To do this, we need strong public services that look after our basic needs. This looks like well-staffed hospitals that can provide medical care to our whānau when we need it. It looks like teachers who feel valued so they contribute to thriving schools, kōhanga reo, kura kaupapa and early childcare where our children can receive a quality education. It looks like more public housing that can offer a stable roof over our heads. It sounds like buses showing up on time that are free and accessible. It looks like preparing for climate change so that our natural world is restored and communities can withstand and recover from severe weather events.

But right now, large corporations are extracting profits that are throwing our society out of balance.

Many of us are feeling the stress of high costs and prices which forces us to make huge sacrifices every day. While workers miss important family events in order to work longer hours, and people are forced into debt to cover essentials such as food and petrol, corporate profits have increased by 39% to $72 billion in the most recent year. According to the data available, this is the largest increase we have ever seen. In just one example, the major supermarkets were making around a million dollars a day in excess profits, while most people are struggling to make ends meet to put kai on the table. The price increases people are experiencing aren’t random: they are corporate decisions, and right now no one is reining them in.

The story of corporate greed is not new, but what we've seen over the past few years is an alarming trend where multinational companies will exploit the pandemic and public health crisis to grow their wealth. Right now, corporations exploit lacklustre tax laws and are laughing all the way to the bank, while everyone else feels ripped off at the checkout or petrol pump.

It doesn’t have to be this way. It is unacceptable that corporate profits can continue to blow out of proportion, while wages cannot keep up and food banks are struggling more than ever to keep up with growing need.

Our country has enough wealth to look after all of us. Bernard Hickey writes that we have a net household wealth of $2.25 trillion, which is $450,200 per person. When large corporations use their power to increase profits, and not give back to workers or wider society, then it enables the massive syphoning of wealth that locks more and more people into poverty.

Our Government has an important role to play in keeping our society fair and funded for the services we need to thrive. Tax and economic experts have offered a range of policies from a windfall tax (which means taxing the excess profits made from unexpected circumstances such a global crisis) to increasing the corporate tax rate (which is a tax on corporate profits). Many solutions are available, we just need to commit to taxing our largest profit-makers. It means we can keep prices down, and build public services up, while holding corporations accountable to pay their fair share.

Now is the time to rebalance the scales and make sure corporations increase their contribution to the collective pool, so that we can all thrive together.

-------------------------
References:

'Is the inflation in NZ because of profits?' RNZ.
https://www.rnz.co.nz/national/programmes/afternoons/audio/2018849004/is-the-inflation-in-nz-because-of-profits

'Supermarkets making profits of around $1m a day; Govt announces steps to lower prices.' NZ Herald.
https://www.newstalkzb.co.nz/news/business/government-to-address-commerce-commission-report-into-supermarket-industry/

'The twin crises that fuelled the hostel fire.' Bernard Hickey, The Spinoff. https://thespinoff.co.nz/politics/18-05-2023/the-twin-crises-that-fuelled-the-hostel-fire