Securing municipal resources
The weakening of the municipalities’ revenue sources during the neoliberal years with the abolition of facility fees on companies and the tax on capital income has reduced the municipalities’ independence and pushed them into asset sales to make up for the loss of income.
Land sales are one example of this. Reducing taxes on the wealthy drove municipalities to offer plots instead of allocating them. As a result of selling the highest bidder public quality, there was a permanent increase in housing prices, which in some municipalities could amount to up to 10 m.kr. per two-bedroom apartment. With this, the cost of tax cuts for companies and capital owners is passed on to the public.
Another example is the increase in real estate taxes. Property taxes that were abolished at the turn of the century were levied on net assets, but property taxes, which today are a larger part of local government revenues than in the decades before neoliberalism, are levied on total assets regardless of how much the owner owes. For the less fortunate, real estate taxes are therefore a tax on debt, which is an outrageously unfair tax.
IV. Municipal revenues secured:
Facilities fee revived (note tax exemption)
The Socialists propose that the facility fee for companies be reintroduced, a turnover-related tax that accrues to municipalities. Companies are independent taxpayers and have to pay to their local environment like individuals, as companies use the infrastructure of municipalities no less than individuals; use streets and utilities, take advantage of the education of staff and day care of their children and the care of parents and other relatives. Companies grow the most and prosper in a well-organized society and they have to pay for that benefit.
It is proposed that the facility fee be phased so that the smallest companies pay little, while the largest companies pay a lot. Tax exemptions from facility fees can be used to stimulate innovation, the creation of communities or to encourage unemployed people to start their own businesses. The size of companies reflects their position in society, the larger they are, the more profitable their position in society and that position is normal to tax.
It is also proposed that the central government set a facility fee so that municipalities do not enter into tax competition for the largest companies and attract them by abolishing the facility fee or lowering it significantly. Tax competition between municipalities and states has undermined communities in our part of the world and it must be stopped.
Companies with operations in many municipalities, such as energy companies, banks, many state-owned companies and some large companies, pay so-called national tax instead of the facility fee and their local tax will be distributed to the municipalities in line with population and scope of operation.
IV. Municipal revenues secured:
Tax on capital income
When capital income was tax-separated from other income, the tax on it was abolished. The result is that the highest-income people in the country do not pay much to their municipalities, or very little. This is a completely meaningless tax deduction, to transfer revenue from municipalities to the very best off, and should be abolished as soon as possible.
Before neo-liberalism undermined the tax system, the tax rate in Reykjavík was 6.7%. It is today 14.52%. This large increase can be partly explained by the transfer of projects from the state to the municipalities. But the explanation is not least that since 1991, local government revenues from companies and capital have been abolished. Workers and the general public have been made to bear the cost of this with increased fines. The difference between local taxes today and in 1991 is almost 330 thous. kr. per year of the minimum wage and 650 thous. kr. per year of average salary. It is a huge bloodbath for the population, a burden that was placed on the public, perhaps first and foremost, so that taxes on capital and business owners could be reduced.
Although the Socialists want first and foremost to ensure the income base of the municipalities so that they can provide the population with good free services and thereby improve the lives of all but the living standards of the lower income groups, the tax on capital income and facilities tax on companies lower average income and below that pay lower taxes.
IV. Municipal revenues secured:
The Socialist Party’s fourth offer to voters in this autumn’s election to rebuild the local government revenue system is to reintroduce a facility fee on companies, but have phased it so that the smallest companies pay the least proportionately to the largest ones, to revive the local taxes of large corporations but lower general taxes.
The strong and independent sources of income of the municipalities are a prerequisite for a normal distribution of power in the community, that the municipalities have the financial means to formulate a policy in the matters that fall under their jurisdiction and look for ways to serve the population as best as possible. It is then a basic premise of a just society that business and capital owners pay to their immediate environment. A just society is based on those who are most vulnerable contributing to society and those who are most in need of assistance receive good service and support.
And then we come to the fifth goal of the tax policy of the love economy and the most important; that the tax system is used to support people and increase equality. This requires a thorough unwinding of the tax increases of the neoliberal years that were passed on to the general public, especially people with medium and lower incomes.
The resources belong to the public
SOCIAL TAX POLICY III. SECTION:
THE RESOURCES TO THE PUBLIC
It has long been clear to Icelanders that the preconditions for building a strong and good society here are that they will be able to utilize the resources of land and sea. This is what the cod war was about, taking over the marine resources from foreign fishing companies so that it could become the driving force of a new society. This was also about the development of Landsvirkjun in its time and before that electricity and heating utilities. The goal was always that the resources would be the basis for a strong and solid society.
Until the neo-liberal years, resource utilization was a social project. Municipalities built up electricity and heating utilities and the government later Landsvirkjun. And state power was used to bring the fishing grounds under Icelandic jurisdiction. The goals were social, to provide families and businesses with electricity and heat, to create employment to strengthen society, export earnings to earn foreign exchange and to strengthen settlements throughout the country.
With neoliberalism, this is changing. The marine resource was almost privatized through the implementation of the quota system. The result of the cod wars was not that the dividends from the sea’s resources were passed on to society and became the basis for community building, but the dividends went to a very small number of families who in a short time became a kind of wealthy class of rich people who rule the country. Many coastal communities lost their quota in the hands of shipowners and have since shrunk, some are still only a shadow of themselves today.
The energy resources were privatized, marketed and profitable and public energy companies privatized or their form of operation changed and social goals abolished so that today they behave exactly like profitable private companies.
The resource that lives in the country’s nature, history and human life became a source of money with the increase in tourists. But its use has been unbridled and largely without supervision and restraint. The same applies to the corruption of natural and air quality. Instead of protecting these resources and natural resources, the so-called market has been entrusted with controlling their utilization. And that utilization is characterized on the one hand by overexploitation and invasion of natural quality and on the other hand by profitable operations that have the sole goal of bringing the owners of the companies dividends from the resources.
Socialists reject this policy. They do not believe that the profitability requirements of marketing companies can control the public’s resource utilization. The resources are common property and should be used in that light. The resources are public goods that should not be sold to the highest bidder or used first and foremost to create dividends for the few. Public quality and resources should be utilized as pillars for society as a whole, let their utilization serve the whole of society.
The Socialists will make a special offer to the electorate regarding resource utilization, climate and environmental protection; but here it is inevitable to discuss resource taxes and the utilization of resources in connection with socialist tax policy.
III. The resources for the public:
The marine resource was privatized
Control of the ocean’s resources is a prerequisite for building a strong and trustworthy society here. The struggle for this domination characterized the first decades of sovereignty and then the republic, and the territorial waters and fisheries jurisdiction are without a doubt the greatest victories of the young republic. The aim of this struggle for independence was to utilize the ocean’s resources so that they could become a driving force for social development.
In the beginning, this worked out. The utilization of the marine resource built up communities around the country and was a prerequisite for the rapid growth of the economy, the development of infrastructure and the basic systems of the community; education, health and welfare systems. In the first decades of the republican era, this development was led by the public sector, not only with the leadership of the expansion of the territorial waters but also with an employment policy that resulted in co-operation, town fishing and other social activities with social goals. During the heyday of the fishing industry, the majority of fishing and fish processing companies were in social operation.
With the introduction of the quota system and its implementation, the industry changed and thus the utilization of the resources and the allocation of dividends from them. Today, the marine resource has in fact been privatized. It is primarily run by a handful of super-rich families, who control fishing, processing, and sales; everything from uncaught fish to the sale of products abroad.
This concentration of power has turned the dream of the young republic into a nightmare. Instead of becoming a driving force behind a powerful and decentralized society, the resource now sails into the dictatorship of a super-rich genocide that thrives on wealth and power while the public has less and less control over the development of society. Many seafarers have lost access to the fishing grounds that built them up, they lost them on the big fishing industry. The dividends from the resources no longer flow through society, but end up in the pockets of the few and the rich, who do not use their wealth to build society but to buy up other companies, both in the fishing industry and in unrelated sectors. Instead, the driving force of a diverse and decentralized society will be full of opportunities and innovation, the marine resource has been used to build the supremacy of the very few.
The greatest victory of the young republic was in the end its greatest defeat. The public’s struggle to free itself from the exploitation of resources by foreign shipping companies and the domination of a distant authority ultimately brought it under the threat of a handful of wealthy rich people, who have become enormously wealthy by exploiting resources that are nominally public property.
The main goal of the Socialists is to break down the power of the rich over society and restore the resources of the people. The aim is not to maintain the constant threat system of the few, but to transfer control of the quota back to the settlements so that they can use the resources to build a new diverse economic activity and a prosperous society.
It is not the goal of the socialists to allow the fishing industry to continue to develop in the same way as hitherto, that the industry consists first and foremost of a very small number of giant companies whose sole goal is to maximize dividends to their owners. It was believed in the neo-liberal years that this was the way, that the profitability of companies was the only guiding light of business development, the amount of money the owner could attract from the operation. In order to achieve this, the aim was to maximize concentration and efficiency, to keep staff salaries and total wage costs down through automation, and to control the entire value chain in order to be able to control where profits ended up. When these goals were achieved, the companies’ operations began to revolve around how tax payments could be avoided, how the share of fishermen could be reduced, how the owner’s benefit could be maximized without any regard for the environment, society, staff or customers.
It is generally accepted around the world that this policy, focusing on dividends to owners, is a derivative guiding light in business operations. It leads to weaker and weaker companies, which have in fact turned against society. We Icelanders know all about it. Suffice it to say one word to explain the consequences of this policy: Samherji.
The breakdown of the big companies in the fisheries sector is therefore not only a democratic necessity, a protection against the build-up of totalitarianism of a very few wealthy families, but it is also a sensible employment policy. Experience shows that smaller fish processing companies that buy fish on the market handle the raw material better and get higher product prices in foreign markets than the large companies that own the entire value chain and have adapted it to maximize the owner’s profit. It is not always in his interest to get the highest price on the market for the product. It may well be that he gets richer by creating a cheaper product with lower labor costs. Or by selling themselves cheaply out of the country and then managing to increase their profits by continuing to sell at even higher prices.
The breakdown of large companies is therefore also a smart way to maximize society’s profit from the resource. It increases with the devolution of power, becomes greater when there is a cut between fishing and processing and when it is prevented that the owners of large companies can hide the profits in the offshore.
The development of the fisheries sector in Iceland in recent decades is in fact an example of the financialisation of the economy. The whole industry revolves around financial instruments and the return on the assets of their owners, but much less about the maximum utilization of resources. In the beginning of neoliberalism, it was argued that this would always go hand in hand, but no one believes that anymore. Experience has revealed where this policy leads. This same policy is still pursued in Iceland, although it is conceptually bankrupt. The reason is that this is a policy that maximizes the interests of the very rich and their wealth comes with a lot of power. The only way to stop this policy is to seize power from the power, for the people to take power over the state and to set a policy for the fishing industry that serves society and not just the few rich and powerful.
Having said that, it goes without saying that the Socialists do not support the idea that the fishing industry will continue to be run in the same format, with the sole aim of maximizing the wealth of very few families, but that fishing fees will be raised. This is a proposal that the public become a collaborator of the wealthy families, get paid to give them all control over their resources. The problem of the fishing industry will not be solved with the big fishing industry because the big fishing industry is the problem of the fishing industry.
The Socialists’ proposal is to reintroduce diversity and decentralization into the utilization of fishing grounds. As will be stated in the Socialists’ offer to voters on resource policy, the Socialists propose free hand fishing and support for small businesses, the development of fish markets and the development of infrastructure that serves smaller parties, improving utilization, quality and prices. But the main proposal is to transfer control of the quota to the settlements, which will then look for different ways to make the best use of the resource for society.
The Socialists are therefore proposing a decentralized, open, democratic and diverse fishing industry instead of the closed and undemocratic system of large companies. It is worth considering this. Unbridled capitalism has not brought us diversity and decentralization as promised, but centralized the threatening power of a handful of large corporations, a system that can be called the dictatorship of wealth and is no less dangerous than other dictatorships.
That said, it is worth noting that the Socialists’ resource offer assumes a resource lease that will flow into a common fund. That fee will be charged at the quay, is a fee for the use of the resource and goes to community development. Although that fee will be lower than the price of rental quotas today, a resource fee that small quota-free fishing companies pay the quota grabbers, it will return many times more money in a common fund than the fishing fee does today.
III. The resources for the public:
The energy resources were profitable
The development of Hitaveita Reykjavíkur is one of the achievements of Icelanders. Instead of burning coal, hot water was drilled and a new heating system was built throughout the town and later in neighboring villages. It was a community project that was far beyond the size, foresight and capacity of a private company. The district heating company saved foreign exchange and got rid of Reykjavík from unhealthy coal dust and coal smoke. The development of Hitaveitan should be a model for Icelanders of excellent resource utilization with societal goals.
In parallel with Hitaveitan, water supply and electricity supply were built in the same way and with the same goals. The public took out a joint loan and paid an acceptable price for the energy so that the utilities would be under the loans. The vision for the future was that over time the construction costs would be paid off and the people of Reykjavík and the surrounding area could then have cheap, safe and environmentally friendly energy for the entire future.
The adventure did not end so well. With the advent of the neo-liberal years, the policy became that the utilities’ good financial position should be used to move to new power plants and sell the energy to power-intensive industries. The premise was not that there was a lack of employment, but that the utilities there had changed in nature, were no longer public companies run for social purposes but a participant, in fact a major player, in the capitalist energy market. And as such, Reykjavik Energy had only one goal; to expand in order to make more profit. It was in those years that a company that could increase its profits had to be on the right track. Money was the measure of everything.
We all know the end of this story. This is a tragedy. The former crown jewels of Reykjavík, Hitaveitan and Rafmagnsveitan, are now a disgrace to the city. The company’s headquarters has billions of monuments to self-preservation and snobbery. And the dizzying debt of the company is a millstone around the necks of city dwellers. In order to save Orkuveita Reykjavíkur from bankruptcy after the Crash, the city authorities had to sharply increase their tariffs. Citizens who today have to live with a plethora of cheap energy had to pay the energy company out of debt prison with higher energy bills.
This story is told here to describe how the authorities’ ideas about the energy resource changed rapidly during the neoliberal era. Socialists want to return to previous ideas; that the resources are used to build a good society but are not invested in public limited companies that behave as if they were profit-driven companies owned by capitalists with the sole purpose of profit.
The Socialists have also set the policy that all energy resources should be public property and in public operation, except for boreholes and small power plants that people build for their own needs. The energy system is the basic system of society and its structure and operation must be on a social basis and with social goals.
The main use of energy shall be to build a strong society here with clear social plans. Such as large-scale food production to create jobs, consolidate settlements, save foreign exchange, reduce polluting cross-border transport and increase the quality of life. Such as the conversion of energy from fossil fuels to renewable clean energy in transport, transport, fishing and other industries that still use oil, coal or gas. The aim is to reduce pollution, defend against climate change, save money, create jobs and increase the quality of life.
Private companies and public companies, which are run as if they were private companies, do not handle such projects. The main innovation in energy efficiency in Iceland in recent years is data centers that run computers with enormous energy to dig for Bitcoin and other electronic currencies, an activity that is completely meaningless to society and in fact harmful.
In recent decades, an energy policy has been pursued, as is the case here with energy shortages. That is not the case. A new energy policy must take into account the fact that some of the power-intensive plants operated here will inevitably close within a few years or decades. Energy policy needs to take this into account. We need to raise money in contracts with large buyers to pay down all construction costs and then use the energy as a driving force for the construction of new employment opportunities and new social infrastructure, not by pricing the energy to the top but on the contrary by using what we have paid down the construction cost.
The Socialists reject the idea of a resource fund that would yield dividends from Landsvirkjun for later use. The idea is that Icelanders are a kind of capitalist owners of the resource, inactive in other ways than demanding the greatest possible return on their property. The public is the common owner of the energy resources and they are to be used in social projects under the control of the public.
III. The resources for the public:
The policy of inaction created chaos
Tourism is based on the common good of the people; nature, history and culture. In addition, tourism utilizes the infrastructure of the community; transport, health care, law enforcement, etc. Tourists come here to visit and explore Iceland, which is a complex idea that is again the common property of us all. For this reason, it is important that the development of infrastructure for natural pearls and historical sites is under public control and that tourism companies collect and pay fees for the load on the community’s general infrastructure.
The government’s inaction in the spirit of neoliberalism in recent years has meant that, despite an urgent need, there has been a need to build infrastructure, rules and supervision. The result is not only a great burden on nature, but overgrowth and anarchy, which is manifested not least in the ill-treatment of staff, wage theft and oppression. The government’s fear of fulfilling its responsibilities, formulating policy and building a sound environment for a growing and important industry, has led to a chaotic build-up that has unjustifiably harmed nature and society.
To make up for the inaction of recent years, a public initiative is needed to build service centers for the main natural gems and cultural monuments. Such a structure can be financed with credit, which will later be repaid with service fees and operating income. In order to speed up such development, it is important that the project is under one management and that excess income from popular places can flow to development elsewhere, a development that will then increase attendance at those places and thus the income of the whole. To look for role models, you can go to the British Isles, where a private institution oversees all the main natural and historical monuments and has been responsible for the elegant structure of those places. This structure must meet quality requirements, both structures and services, education and catering, as well as toilets and all assistance to tourists. The goal should be to build an excellent service and framework around an unforgettable visit of domestic and foreign tourists.
In order to cover the burden of tourism on public infrastructure, the collection of VAT on tourism should be moved up to a general level once the industry has recovered from the crown pandemic. The decision to keep the tourism industry at a lower level actually contributed to the overcrowding of the industry and the strengthening of the króna, as a result of which the price of the service rose more in foreign currency than the increase in value added had done.
An accommodation fee must be collected which goes to the municipalities, but they bear a high cost of the tourism service but have little income from it. Such a fee is imposed worldwide for these reasons and we have no pity for adopting that system.
Tourist fees should be imposed on tourists and it should be examined whether they can be used to control the flow of tourists, for example by raising it during the high summer but lowering it to a picture fee during the dullest time during the winter.
The inability of the government to manage the development of tourism has harmed nature, the industry itself, the staff within it and society as a whole. It is the role of the government to create a clear framework for the economy and manage the development of infrastructure to support and strengthen the activities. And it is the role of government to protect staff and customers from unscrupulous crooks. It is an absurd idea that tourism is developing best in anarchy. On the contrary, it is the experience of all countries that the economy thrives on a clear employment policy that combines public structure, supervision and tax collection.
Socialists see tourism as a resource utilization where the government, municipalities and other public bodies play an important role in the development. The path must be reversed so that the industry grows by accident according to the blown-up business ideas of individual traders with harmful consequences. The societal goals for the development of the tourism industry must be clear so that the companies can shape their operations within them.
III. The resources for the public:
Taxes, fines and the need to ban pollutants
The climate crisis is one of the consequences of inequality and power imbalances in society. The few rich and powerful have not had to answer to anyone but have managed to break down human society, public safety nets and institutions designed to support equality and justice. And they have come up with a way to walk on the natural good of the earth; pollute, waste, destroy and spoil.
A prerequisite for mastering climate change is taking control of the resource, the perpetrator. He can never be part of the recovery. In order to be successful in climate change, tariffs, taxes and fines must be applied to the companies that pollute the most and work hardest on a common quality.
The risk is, based on the current climate policy, that capital and business owners will apply for grants from the Treasury to finance obvious changes in their operations. As a result, the public will bear both the damage caused by the pollution and the cost of stopping it.
It is a matter of course and necessary to spend public money to build new solutions and technologies to combat climate change. But that money should flow into community projects and into public research institutes. The companies have to take care of themselves. If they do not change, their activities will be banned. Their owners cannot drain the funds of their own companies to pay dividends to themselves and then apply for money from public funds to meet long-foreseeable problems.
The Socialists are therefore proposing incremental carbon and pollution taxes to protect the environment and nature and significant public investment to speed up energy transition, boost domestic food production, land reclamation and forestry.
III. The resources for the public:
The Socialist Party’s fourth offer to voters for this autumn’s election on resource utilization involves placing control of the public’s resources under social control so that they can be used to build a good, safe and beautiful society. The goal is to break down the power and domination of the few. Utilization of resources is a long-term goal that should not only serve society today, but build society and strengthen it for future generations. Taxes, fees and rents will be used to manage the structure and a clear employment policy will create a framework for companies.
One of the main themes of this policy is the devolution of power and the increased power of the settlements. If they are to support these projects, the income base and independence of the municipalities need to be strengthened. This is what the fourth chapter of the Socialist Party’s offer to voters about the socialist tax system is about, how the revenue collection of municipalities can be rebuilt and thereby increase the distribution of power and democracy in society.
Eliminate tax evasion
The breakdown and weakening of all control over companies and capital was part of the transformation of the neoliberal years. It was based on the thought that Ronald Reagan put it this way: The state can never be the solution because the state is the problem. It was rejected that the government could improve the economy by following the demands of the public authorities, it was claimed that the market would correct itself if an abnormal situation arose.
And this disbelief in the supervisory role of the public authorities reached the tax system. Tax changes were not forced to maintain justice but to meet the demands of business and capital owners for lower tax payments and less tax control. This was driven by the conviction that in fact the money was better spent by the rich than in public funds. It was therefore a systematic attack on public funds, designed to transfer power and economic power from the democratic arena to the so-called market, which is in fact the domain of power.
The breakdown of the tax system and tax control is now a global problem. Treasury revenue has been weakened by tax competition between countries, which has led to rapid tax cuts on capital and business owners around the world. But tax cuts are only part of the problem; the biggest problem is the flight of money to tax havens and an increasingly pervasive tax system within the states. Icelanders must take part in defending against this on the international stage and be at the forefront, but that is also something we can do on the home front.
The Socialists in particular propose three points; to deprive holding companies of independent taxable membership, to limit the right to use capital costs for deduction before tax, and to greatly strengthen tax control, especially with the richest capital owners and large companies.
II. Stop tax evasion:
Let’s drop the holding companies
Holding companies without operations other than asset management are a channel for tax evasion and have been established primarily for that purpose. Dividends from management companies, real companies that produce goods or services, are transferred to holding companies where there are countless opportunities to defer payment of taxes and ultimately avoid all tax payments. In the years before the collapse of 2008, large sums of money were transferred in this way to companies in offshore countries that did not pay any taxes in Iceland. After the Crash, the tax law was changed so that companies in foreign low-tax areas were ignored and their owners were taxed as if the companies did not exist, were not independent taxpayers.
Now is the time to take the next step and do the same with all holding companies, companies that have no activities other than asset management, and tax their owners directly as if the companies did not exist. Dividends to holding companies would then be taxed immediately as dividends to the owners in the same proportion as their assets are in the company and the same would apply to its other income such as interest and capital gains.
Holding companies have no operational purpose beyond the ordinary bank account and no social purpose at all. They are the main tools of financial-driven capitalism, which has not only weakened society but eaten away at real-world corporations, weakening them economically and confusing their policies. There is therefore no societal purpose to regard these companies as independent taxpayers. They are primarily tools for sucking money out of other companies and society and transferring to their owners with the least amount of tax payments.
II. Stop tax evasion:
Reduce the weight of the deduction
Companies are authorized to deduct expenses from income before the imposition of income tax. These expenses include financial items such as depreciation and interest. This has been abused in various ways for tax evasion. We know of examples from smelters that pay their parent companies a high interest rate on all start-up costs, so the operating companies’ profits are almost non-existent and, as a result, tax payments are small, if any. We know of examples of companies that buy trawlers that will last for thirty years but are written off over eight years to reduce tax payments as much as possible.
All rules on the assessment of financial items need to be tightened so that tax payments reflect the actual operations of companies. Authorization must be given to the tax authorities to tax the operations of companies on the basis of income less expenses before any financial items are suspected if such deduction is suspected or if it is outrageously high.
Overpayments should not be considered as normal corporate expenses. Companies should be allowed to post costs for wages up to three times the minimum wage, but wages in excess of that would not be included in expenses and would be entirely at the expense of the companies’ owners, but not partly paid by tax cuts as is currently the case.
The increase in the number of evasions during the neoliberal era has not only reduced the Treasury’s revenue but distorted the entire economy. The emphasis has shifted from the operation of companies with actual operations, production and sales of goods or services, to financial operations. It is more money to have out of turning on the tax than to perform better in business or serve consumers better. The system rewards cheating more than diligence.
II. Stop tax evasion:
Tax investigations on large companies
Tax research on large companies and holding companies of the rich is far too weak in Icelandic society. It is known that tax evasion and tax evasion increase as people have higher incomes and have more assets. The main focus of tax research should therefore be on the tax returns of the richest capital owners and the largest companies. It can be stated that no public sector activity will generate as much revenue for the Treasury as strengthening tax control over the richest people and their companies.
Tax investigations have almost always been weak in Iceland, as it has been the goal of the party that has long led the Ministry of Finance to keep tax investigations to a minimum. This needs to change decisively, building a strong office of the Director of Tax Investigations that has the capacity to build a team of staff that can handle the tricks of the rich auditors and lawyers. The aim is not only to strengthen revenue generation but also to fix the competitive position of small and medium-sized companies that pay their taxes in full against the large companies that have good facilities for tax evasion.
Tax investigators should be seen as key people in government operations, people who ensure that the Treasury’s revenue collection is active and fair. The public must be kept informed of the work of the Director of Tax Investigations and the methods used to avoid normal payments to the public fund.
II. Stop tax evasion:
The Socialist Party’s fourth offer to voters in this autumn’s election to prevent tax evasion is to prevent abuses by holding companies for tax evasion, reduce companies’ ability to reduce tax payments with unreasonable capital costs, stop deductions for overpayments and boost tax investigations on big business and the richest.
This is not only necessary to strengthen the Treasury’s revenue, but it is also important to counteract the financialization of the economy, which has weakened and damaged it. The tax changes of the neoliberal years were not just divisions from public funds, but they distorted all the rules of society, shifting the emphasis from value creation of the economy to how the few rich and powerful could attract as much wealth as possible.
And this is nowhere more pronounced than in the breakdown of societal goals and the privatization of public resources. The third goal of the tax policy of the charity economy is therefore to bring the resources of the country and the nation back to the people so that they become a driving force for a social structure based on justice, equality and humanity.
The fight for independence resumed
There is nothing more beautiful in our history than the resurrection of the unrighteous in the second half of the nineteenth century. How the common people managed to break the link and start their fight for equality, justice and human dignity of all people.
The impact of that resurrection on the formation of society in the first half of the twentieth century will be the motivation of the people for a long future. People of the people who were completely unjust 150 years ago, without the right to vote, freedom of expression or association, without the right to decide where they lived or for whom they worked, without income and property, in fact unjust slaves; rose up and built a movement to fight for justice, equality and humanity. This struggle resulted in universal suffrage and political movements that served the interests of the public and not only the interests of the upper class, it resulted in trade unions that led the people’s struggle for equality, justice and decent living and it resulted in the freedom struggle of women, children, the disabled, LGBTQ and other oppressed groups. In just two or three generations, the Icelandic people managed to turn their position in society around, from being without all rights and to having every opportunity to shape society to their own interests, expectations and hopes.
But this story is not over. This can be seen, for example, in the fact that it is not taught in this way in schools or in the speeches of those in power. It tells the story of the rulers who are said to have brought the people rights and the wealthy who are said to have brought people prosperity, technology and progress. And in spite of many victories, the common people still live within the history of the princes and under the oppression of the few, rich and powerful. Despite the fact that the general public has gained far more than what the slaves of the past enjoyed and that living standards have improved, no complete victory has been achieved. The public is still living in the class oppression of an unjust society, it must be welcomed that most all decisions about the future and structure of society are made to serve the wealthy.
And it can also be argued that the public has lost much of what it fought for in previous years. Then came the struggle to build a democratic platform as a power against the domination of wealth. It was the path of the people to justice, to build power on the basis of universal suffrage to counteract the inequality of wealth, which distorts and distorts everything. In recent decades of neoliberalism, the democratic arena has been weakened and decisions, assets, resources and power exported to the so-called market, the playground of the few and the rich. The shaping of society is no longer a common task of the whole public, but of what pays for the easy to decide the future of the rest of us. The future is no longer the common property of us all, but is the task of the few rich and powerful.
And that is precisely why the Socialists want to revive the struggle for independence of the people. Hope has weakened and the future of justice and equality has faded. That must not happen. Without strong dreams for a good future, without hope for equality and without a fight for justice, society will continue to thrive.
It is therefore a precondition of all progress to revive the struggle for independence of the people.
The economic foundation of society
Apart from increased democratic rights, the biggest victory in the struggle for independence of the people in the last century was the implementation of fisheries jurisdiction to allow the power of resources to build a good society. At the beginning of the last century, the catch of Icelandic ships and boats was only 1/3 of the fish caught off the coast of Iceland, but at the end of the century, all fish was caught by Icelandic ships and boats. Without the struggle for the implementation of fisheries jurisdiction, Icelandic society would not have been able to develop from one of the poorer regions of Europe to one of the most stable.
The development of the fisheries sector in parallel with the implementation of the territorial waters was characterized by the active employment policy of the government and social operations. The big steps were taken when the Socialists were in government; job creation during the innovation government at the end of the war, the extension of the jurisdiction to 12 miles during the time of the left-wing government 1956-58 and then even further implementation at 50 miles and the stern trawling during the time of the left-wing government 1971-74. Most of the development was through socially run companies, town companies and cooperatives.
With these actions, communities were built around the country. It then happened with the quota system and the transfer of catch quotas that the resource came under the control of a very small number of fishing companies that reversed this development, demolished the settlements that had previously been built up and put the dividends that had previously shaken society into their own pockets.
The Icelandic people, who had fought for the implementation of the jurisdiction and built up the fishing industry and communities all over the country, were deprived of the benefits of their struggle. The first step in reviving the struggle for independence of the people must therefore be to regain control of the fishing jurisdiction of the fishing industry, to wage the fourth cod war to seize marine resources for the nation so that they can become an economic basis for a strong and just society and not just a poor family.
The same goes for other resources. The energy should be used for community projects that strengthen and strengthen a good society. These goals are not achieved by making the energy companies profitable and allowing private companies to access the resources. The resources are the common property of the nation and they should be used for the benefit of all.
It will be best done by using them to build a society of equality and justice. It was about the people’s struggle for independence, to build a good society. Poor people and the low power perceived well that it was the most desirable value, to be allowed to live and work in a society where everyone enjoyed respect and recognition.
The struggle for this was not least within the companies, that the owners of the companies treated the workers as equals and not as slaves or laborers. That struggle must be revived because we do not build an active democracy or a good economy if people have to submit to the dictatorship of business owners as soon as they come to work.
It is part of the independence struggle that employees acquire more rights in the workplace, that employees sit on the boards of larger companies, that cooperatives be increased and that it is ensured that companies take into account the interests of employees, society and the environment and not just shareholders. This is not only socially important in itself, strengthens democracy and equality, but such companies have more resilience than those that only take into account dividends to shareholders. Increased labor democracy is therefore an economic measure to strengthen the means of employment.
The social basis of the struggle
The people built their power through collective power and organized struggle. In light of its positive consequences, the state should push for the power and influence of the trade union movement and other non-governmental organizations. The Socialists therefore emphasize that labor legislation should be changed so that the power of trade unions increases and the possibilities for workers to force wage increases and other rights, but no less to meet the oppressive actions of business owners. To do this, the trade union movement needs to be able to take various measures in the workplace in cooperation with workers. It not only strengthens the struggle but also brings the struggle closer to the ground and thus spreads power within the trade union movement.
The experience of an organized trade union movement is good and it can be transferred to other areas, the lessons learned from the labor market to other markets where the public is sick of the domination of wealth. The labor market was tamed by the fact that 0.7% of wage income went to the organized struggle of workers, to trade unions. It is a fee that has paid off. Without trade unions, business owners would have all the power in the labor market.
The imbalance of power in other areas of society could be equalized in a similar way; that 0.7% of all rent went to the tenants’ association, that 0.7% of all interest went to the debtors’ association, that 0.7% of all insurance premiums went to the policyholders’ association and so on. A strong public interest campaign will not only protect people from oppression, betrayal and oppression, but will also build a more decentralized and diverse society.
The same arrangement can be used for students, to take 0.7% of the interest on the loans while the student loan system is used and later a comparable proportion of the student salary and to contribute to the active struggle of students’ interests. And in the same way build up the rights associations of pensioners and the disabled by contributing 0.7% of pensions to the organized associations of these groups. Ways need to be found to stimulate the organized struggle of immigrants, children, women and others in other ways.
All the most significant things in our society were built up by the organized struggle of the people in the last and there last century. We should learn from this story and do more of what has worked well. Active democracy is built where the interests of the weak take precedence, and this only happens if society encourages an organized struggle of the people.
The democratic foundation of society
Decades after the people gained the right to vote, politics changed from a dictatorship of the bourgeoisie to what might be called popular politics. Public interest was on the agenda; cheap and safe housing, free health care, education for all, job security and so on. But in the process, the authorities managed to gain a foothold in the democratic arena. For a time, there seemed to be a tendency for state power to become the executive arm of the people that the people could use against the threatening power of wealth; but over time many things went the same way as before. Today, state power is used to maintain the power of the rich, increase their wealth and bring them public property and money, no less than in the years before universal suffrage.
This is a real problem that we have to face. The politics that in the past were liberating for the common people are today used to reduce the power of the people. Representative democracy has not lived up to expectations; Althingi and local governments do not reflect society, and there is a lack of representatives of those who are hardest hit by the injustices of society. It is therefore necessary to democratize the state and its institutions, no less than to strengthen and strengthen public organizations.
There are many means to do this.
It is one thing to randomly elect a Constituent Assembly that regularly revises the Republic’s constitution, the first being to start with a 2011 Constitutional Council bill passed in a referendum that would form the basis of a new constitution. Random selection would ensure that the constitution was not imposed by a parliamentary or a narrow elite, but reflected the will of the most ardent people. This would separate the constitution from the conflicts of everyday politics. Experience has shown that the Althingi has been able to make a thorough review of the constitution or pass a bill by the Constitutional Council. By Althingi separating itself from the process and entrusting the Constitutional Assembly with passing the bill of the Constitutional Council, it is possible to resolve the knot in which this matter is both easier and earlier.
Various institutions can be transferred from the political power, institutions that belong to the nation rather than the state. This applies, for example, to Ríkisútvarpið, national parks and natural and historical monuments and Tryggingastofnun, to name a few. The board of these institutions may be elected directly by the people or those whom the institution is to serve. The same can apply to schools and educational institutions, health care institutions and more. Experiments can be made on the combination of elections and random selection so that the school board in the neighborhood reflects well the composition of the population.
The aim of these changes is to distribute power and bring it as close as possible to the people, to the neighborhoods and the countryside, to the interest groups and those who are most dependent on the service. And thereby reduce the power of the wealthy and the elite.
The experience of extending suffrage in the last century was good. Together with the public interest struggle in organized trade unions and other non-governmental organizations, the extension of the right to vote was a prerequisite for building a society that took into account the needs of the public. Today there are two groups that do not have the right to vote in Althingi; children under the age of 18 and immigrants without citizenship. By extending the right to vote, politics could be stimulated to look after the interests of these groups. And does not give off. The economic situation of families with children has declined compared to other age groups, and a relatively high proportion of immigrants among low-wage earners and tenants has meant that the interests of those groups are less on the political agenda, despite the urgent need for benefits.
Democracy will never work and we will not succeed in creating a just society unless the emphasis is on improving the situation of the most disadvantaged. The elitism of politics and the increasing power of the system at the expense of democracy work against these goals. One of the main tasks of politics today is to counteract this reversal of the democratic system.
The social foundation of the future
The main results of the struggle for independence of the people in the last century were, in addition to higher wages, the development of the health system, schools and educational institutions, social security and other social measures necessary to build equality and justice. The more affluent can buy health care and education, while the less affluent can not enjoy health care, education or financial security without building systems that are open to all free of charge.
With this in mind, a health and education system was built up in a short time, a focus was placed on the social housing system, social security was established and most of what is a prerequisite for a civilized society. After rapid development for several decades, it slowed down during the neo-liberal era. Taxes on the rich were reduced and the post-war social contract was effectively repealed; that people should pay taxes according to ability and receive public services as needed. Instead of paying for medical care while people were fully healthy and in the labor market, the tax was collected from people when they became ill. Instead of looking at education as a social project, it was seen as an investment of individuals, which it was natural for them to pay for and then sell in the labor market. Instead of people paying taxes on income but everyone receiving the same pension, a system was created that extended the social class gap to the grave and death.
It is therefore not enough to recover the resources from the shipowner and the wealthy or to build the people’s tools of struggle, but we must learn anew to talk about the society between us. Should we pick up the thread from the popular movements of previous generations and aim for a society that takes into account the needs of those who live with the greatest injustice and the worst conditions, or should we continue to target the structure of society to the needs of the richest and most powerful?
This may sound like a simple question with an obvious answer, but unfortunately, societal values have given in so much to the neo-liberal extremism of the neo-liberal years that we need to practice to get back on track.
One of the neo-liberal methods of success was to de-politicize the whole debate. Instead of asking what we want with the health care system, we were told that there was a limit to what was available, that we did not have enough money to provide all the good services, but we had to prioritize, cut back, accept that the system would always be limited and inadequate. Instead of the ideals of justice and equality, there were questions about whether money should go to this team or the next. Hope did not continue the development of society as before, politics was no longer a creative forum for the country of the future, but a compulsive stalemate with a bad result built in.
Although the Socialist offer is characterized by clear proposals for action, we mention this here. If we want to build society according to our hopes and expectations, then we need to practice hoping, allow ourselves to dream big and remind ourselves that we can go further than we might dare to hope.
Socialism is optimistic in itself. Socialists believe that the people can build a just and good society. Center people share with us the ideas of what is a just and good society, but it is not as optimistic, thinks we have to accept less. And the right-wing people are not only pessimistic but also have a dark view of human beings, believing that it is not in our nature to build justice or live in equality.
Socialist offer: Revival of the struggle for independence of the people
Iceland is now at a crossroads at the end of a period that has been blamed on neoliberalism. At that time, social support was weakened and some of the success that had been achieved with the organized trade union struggle in the last century was reversed. The infrastructure of society and the main basic systems are now weak and the power imbalance has grown. Ahead are technological changes that will continue to increase the wealth and power of the few, but will leave the poorer and more powerless behind. And just as capitalist capitalism has broken down societies, so too has the quality of nature so endangered that the future of mankind and the biosphere is in jeopardy.
The Socialist Party’s offer to the electorate at this juncture is to meet these threats with the collective power of the people, with the aim of distributing the burden equally as well as the benefits. Recent history shows us what the public is capable of if it succeeds in building solidarity within an organized struggle. Our grandparents, great-grandparents, began the struggle of a destitute people, disenfranchised and destitute people who had nothing but the hope of a better society. These people managed to transform their position in society, improve their living conditions and rights, and have a decisive influence on the shaping of society for the benefit of future generations.
We are those generations. As previous generations managed to transform Icelandic society through the struggle for independence of the public, we will succeed as well. They succeeded and we will succeed. And it is our duty to the people who mocked the struggle in the last and there last century, to understand with society that the position of the people is much better when we leave society than when we were trusted to do so.
The Socialist Party’s offer is to restore fishing jurisdiction to the fishing industry, to use the resources of land and sea to build a more just society, to strengthen the trade union movement and to further ignite the public interest, to democratize the economy, to strengthen public institutions, to work against elite politics with a randomly elected Constitutional Council and the further development of democracy and to set clear societal goals for the entire development of society’s infrastructure and basic systems.
The special position of society in Iceland is that we are few in a large country with great resources. It is the resources of the people that are really the driving force behind this society. We are therefore in a unique position to build a just society of equality and human dignity, a society that the people of all time have longed for.
About that is the Socialist offer for the revival of the struggle for independence of the people; to awaken the dreams of the people and make them come true.
Eradicate poverty in 2022
The best way to improve society is to improve the situation of those who have been hardest hit by injustice, inequality and powerlessness. This is not complicated, in fact the same principle applies as when you want to repair a faulty clock. You fix things that do not work. It is therefore clear which groups the public sector should first support, strengthen and build up. It is the poorest, the people who suffer the most because of the injustices of society.
Iceland is a country rich in resources and since there are few people living here, we are therefore a rich nation. These two, wealth and few, make it easy for us to eradicate poverty from society. We have nothing wrong with it. Other than the mindset.
In recent decades, all emphasis has been placed on improving the conditions of the wealthiest, lowering taxes on the rich, strengthening capital and business owners and giving in to their demands. If we turn this around and meet the demands of the poor, relieve those burdens and the burdensome struggles of life, we will not only succeed in eradicating poverty, but we will succeed in strengthening and empowering society as a whole.
Research has shown that equality not only improves the living conditions of the most disadvantaged, but also increases trust and security in society, reduces crime and encourages the activity of citizens and prolongs life and general health. And equality also strengthens the economy, builds the resilience of companies and society, and makes the economy better able to withstand shocks.
It is equally clear that society has enough vigor to eradicate poverty. That’s enough. The Treasury has the capacity to finance measures against poverty and there are no measures as urgent and none that will bring us as much benefit. In some cases, it is a matter of shifting the tax burden, from the poor to the rich, while in others it is such a lucrative measure that it is obvious that the state prints money to support it or borrows from the Central Bank.
The eradication of poverty should therefore not only be the goal of the poor but of everyone in society. Those who do not struggle with day-to-day poverty will reap a much better society without all the pain that comes with poverty, helplessness, anxiety, and the shame that is imposed on the poor.
The Socialist Party therefore proposes some clear and simple measures to eradicate poverty from Icelandic society, measures that will have an effect as soon as a majority is formed in Althingi to enforce them.
SEVEN KEYS TO ENDING POVERTY
I. Stop taxing poverty
It is both stupid and immoral to collect taxes from people who have such a low income that they cannot support themselves. The minimum subsistence level for individuals and families should be examined and the taxation of income covered by it should be prohibited. If the housing costs of each taxpayer need to be taken into account, this should be done.
II. No one with less than the minimum wage
Retired people, the disabled, the unemployed, students and those who are dependent on municipalities do not have strike weapons to fight for their living conditions. The income of these groups should therefore be based on a minimum of the lowest agreed wage terms in the labor market.
III. Children have no income and can therefore not bear any expenses
Children need special protection against poverty. Children have no income and it is therefore absurd to charge the fees for health services, education, leisure, transport or anything else that can be classified as services to which all children are entitled. Children should enjoy a personal tax deduction like adults, so that the family personal allowance is in proportion to the number of family members.
IV. Free health care
Ill health, accidents or trauma should not undermine people’s finances. It is enough that people struggle with the diseases themselves, the consequences of accidents and trauma and the loss of income that comes with it, even though health and medical institutions do not add to the trauma and charge the sick. We should pay for health care when we are healthy and in the labor market, not when we have become ill and disabled.
V. The housing revolution: 30 thousand apartments in ten years
Affordable and safe housing is a prerequisite for all welfare and health services. Financial support for those living with rent increases is burning up in the housing market. The personal support and empowerment of the person living with relentless financial anxiety does not work. The basic premise for building a strong welfare system here, which in turn is a precondition for eradicating poverty, is a major effort in the development of social housing. The Socialists are proposing a housing revolution in which 30,000 social housing units will be built throughout the country over the next ten years.
VI. Protect tenants from fraud
Low-income people in the rental market are mostly sandwiched between low-income and over-rent. To protect these people until the construction of social housing has permanently reduced rental prices, a rental ceiling needs to be put in place to stop the turmoil, increase housing benefits so that no one pays more than a quarter of their income in housing costs and legislate rent to ensure tenants security and protection. Those laws provide e.g. that the tenants’ association is a party to the rental price.
VII. Let’s build a non-governmental organization
The best way to ensure justice and equality in society is for the public to organize their interests in trade unions and other non-governmental organizations. The government should encourage and strengthen such organizations. Protecting the poor from the oppression of wealth requires strong tenants’ associations, associations of pensioners, students and the unemployed, associations of immigrants and children, associations of people living in municipalities, patients, debtors and consumers. Strong such organizations are a prerequisite for building a just society here. The struggle of the public should become the main partner of the state and take the place of the interest groups of the rich and powerful.
Socialist Sixth Offer to 2021 Voters: Eliminate Poverty in 2022
The Socialist Party’s sixth offer to the electorate this autumn on the elimination of poverty is about stopping taxing poverty, that no one has a lower income than the minimum wage, that children will not be required to pay for self-service and receive a personal allowance, that health care will be free and funded. through the tax system, that 30,000 social housing units will be built over the next ten years, that tenants will be specially protected from harassment and insecurity, and that NGOs will be strengthened to maintain a strong struggle for interests and build justice within the community.
All of these are obvious and natural demands that the vast majority of Icelanders should be able to accept. It is in everyone’s interest to eradicate poverty. It is nowhere decent and least of all in the richest societies on earth. It is our duty as Icelanders to eradicate poverty from our society and to help other societies to do the same.
Let’s talk about neoliberal thinking
One of the most important tasks of politics is to end so-called neoliberalism. This is a concept that everyone has heard before, without necessarily understanding what it means. This is not surprising, since people are more likely than not to hear this concept in the litigation of those who want to deny that neoliberalism is a phenomenon that exists at all. Those who do so have good reason to say so. After all, neoliberalism is really nothing more than a promise of the prevailing political and economic situation in the West and the whole world in recent decades.
The concept of neoliberalism is an extremely important analytical tool, as it describes and explains the economic policies and ideologies of the West in recent decades as a coherent and holistic phenomenon. It thus makes it easier for people to clearly understand the economic, political and social changes that have taken place – as well as the situation today. Equally important, understanding the changes of recent decades as a holistic phenomenon – which has very clear characteristics, doctrines, and ideas – makes it easier for people at the same time to resist this development.
This is exactly what the dominant interests in society want least of all – after all, the development of neoliberalism in recent decades has been to their great advantage and they do not want to change course in any way.
Neoliberalism is a very real phenomenon. It has had far-reaching consequences in virtually every area of society, from large international institutions to the innermost minds of individuals.
But to fully understand it, you really need to see it from two angles.
Two sides of neoliberalism
Neoliberalism has, on the one hand, a political-economic side. This refers to the theoretical theories in economics and political philosophy that are used as a guide in government policy-making and the economic measures that are taken. The basic doctrine here is that free markets are a phenomenon that will always come to the best conclusion. The state can never know more than a free market, and thus never make better decisions about how society should be organized and its material quality should be divided. The economic policy of neoliberalism thus aims to reduce as much as possible the “intervention” of the state and democratically elected representatives of the economy. This is done through various means, most notably through cuts in the various institutions of society that make it impossible for them to carry out their role (especially those who perform some kind of supervisory role). This is therefore one of the most obvious features of neoliberalism: superstition about the market and its ability to solve all societal problems.
The other side of neoliberalism, however, is no less important. It is what could be called the ideological side. Because neoliberalism does not dominate society only through economic measures and the decisions of politicians and the economists of its advisers. The reason why the same actions are being continued indefinitely, despite the fact that their serious damage has long since been revealed, is that the public is largely uncritical of these actions. Most people take them for granted, even as if it is some kind of natural law where nothing else is available.
This is not because the public is particularly mad. Rather, it is because neoliberalism is the dominant ideology of society.
This ideological aspect is based primarily on radical individualism, which states who is the maker of his fortune. Whatever happens to the individual, good or bad, is the individual’s fault. If the individual is wealthy, it is because of his own diligence. If, on the other hand, the individual is poor and living in poor conditions and difficulties, it is similarly due to his own personal failure. In other words, it is the individual’s fault – and the responsibility is thus shifted from those who have made the decisions that led to a society where people live in such conditions.
These two aspects of neoliberalism are thus intertwined and have enabled it to achieve hitherto unheard of results in recent decades. Since the beginning of the 1980s, neoliberalism has managed to infiltrate every nook and cranny of human existence. Whether it’s in the decisions made by International Organizations, or in the behavior of influencers on Instagram. Everywhere, the individual, the private enterprise, and the so-called free market are blessed at the expense of social virtues.
Consequences of neoliberalism
It is no exaggeration to say that the consequences of neoliberalism have been catastrophic on almost every scale.
To name just a few of the most familiar:
- Inequality at dizzying heights is unprecedented in human history.
- Stagnant or deteriorating conditions for working people in the West.
- The endless imperialist wars of the West in one poor country after another (with the aim of “opening up” markets and their economies to Western corporations)
- Increasing employment and existential insecurity.
- A crisis in mental health that is now raging like wildfire in almost all Western countries and beyond.
- Not to mention climate change – which is a direct result of large corporations being allowed to govern themselves in the name of private enterprise and freedom.
In order to unwind neoliberalism, it is not enough to elect other politicians to power who promise an economic policy other than the free market of neoliberalism. As long as the ideological side has this grip on society, the same politicians, with the same old “solutions”, will always inevitably return to power – and continue on the same old path.
Neoliberalism works in many different areas. In order to combat and overcome it, the struggle must also take place in different areas. It is not enough just to criticize neoliberalism. Other ideologies that preach different values and emphases need to be replaced.
This is exactly what socialism is. Socialism is not just a political policy, but at the same time an ideology in direct opposition to neoliberalism and its values.
As opposed to individualism, socialism prioritises society.
As opposed to individual diligence, socialism prioritises solidarity
As opposed to competition, socialism prioritises cooperation.
As opposed to selfishness and self-worship, socialism prioritieses compassion and solidarity
Socialism basically preaches what can be called a proper society. The financial crisis of 2008, which led to the Icelandic economic collapse, was the death of neoliberalism. It was unmistakably revealed how this ideology, together with its economic policy, was a very dangerous fantasy. However, neoliberalism has miraculously managed to survive, as a kind of zombie. No one has a passion for it or a belief in it anymore. Yet neoliberalism continues to dominate society, controlling both politicians’ decisions and their own experiences of existence.
The only thing that can finally bring neoliberalism to the grave where it belongs is socialism. There is simply no other option.
VIII. socialist manifesto: Winding off neoliberalism
- Tax cuts on the rich will be stopped and tax cuts in recent years will be reversed.
- No sale of state property. All transfer of public property to the private sector will be stopped and this trend reversed.
- The privatization of resources will be halted and efforts will be made to transfer the nation’s resources from the private sector to the public.
- The privatization and profitability of basic systems will be stopped. The basic institutions and services of society will no longer be seen as an opportunity for the rich to prosper.
- Outsourcing of public services will be stopped.
- Contrary to popular belief, society has more than enough resources to sustain all the services and welfare it desires.
- Charges for basic systems are a complete disgrace and will be abolished altogether.
- The Socialist Party will always fight against the breakdown of the trade union movement and support the trade union struggle by all possible means.
- The policy of starvation towards public services will be completely stopped.
The only thing that will starve under the rule of the Socialist Party are the bank accounts of the rich in tax havens.
Let’s tax the rich
SOCIAL TAX PART I PART I:
Let us tax the rich
The breakdown of the tax system in the neo-liberal years was a counter-revolution of the rich, aimed at the post-war idea of the welfare state. This revolution not only transferred magnificent funds from public funds to the wealthy, but also greatly increased the tax burden of the arid population and multiplied public service charges. The richest escaped taxes and became much richer. And the public paid for the bottle.
Tax cuts for the rich were justified by the fact that lower taxes on capital and business owners would stimulate the economy so that everyone would benefit. This is the so-called bread crumb theory, a delusional theory that has long since fallen. In addition, it was argued that with low taxes, tax revenues would increase as tax evasion would decrease. The experience was the opposite, the capital in tax havens increased significantly during the neo-liberal years. Lower taxes on the rich did nothing but increase the wealth of the rich. The result was a weaker position for public funds. This situation was then met by the sale of public property, privatization, outsourcing of public services, increased tariffs and tax increases on workers and the general public, especially those with middle incomes and lower incomes.
It is the nature of a capitalist economy that it constantly transfers money from those who have little or nothing to those who have a lot and always want to acquire more. The tax system of the post-war years was intended to counteract this unnaturalness, to protect society against the dictatorship of wealth. The instruments were progressive taxes; to tax in particular wealth, super-income and the size and scope of the market. Neoliberalism broke down this system and unleashed wealth on society, amplified the wealth and power of the rich and crushed the power of the people.
But now neoliberalism has fallen as an ideological policy and no one is advocating the bread crumb theory without blushing. There is therefore no reason to maintain a tax system based on neoliberalism. The basic premise of a just society, built on the interests of the people, is to abolish the tax policy of the cruel economy of the few and to build a tax policy that suits the charity economy of the masses. The first goal of that policy is to combat wealth accumulation and tax the rich.
I. We tax the rich:
To counteract the injustices of capitalism, which is constantly shifting money from the masses to the few, it is necessary to impose a wealth tax. Wealth tax is a wealth tax that is levied on assets in excess of what can be considered the normal property of well-to-do middle-class people at the end of their working lives. Wealth tax must be tiered, from 2% on net assets in excess of 200 m.kr. for couples up to 9% for couples who own more than ISK 10 billion. It can be estimated that less than 1% of taxpayers will pay wealth tax, over 99% of Icelanders will not pay such tax.
Property taxes are the oldest taxes in Iceland. The tenth century of the republic was a property tax. Property taxes were levied in Iceland for over 900 years, until neo-liberal extremism ruled them unjust. Wealth tax was imposed here temporarily after the Crash, among other things to be able to tax part of the threatening profits of the bubble years.
The goal of the wealth tax today would be to tax the wealth that the rich have accumulated due to the tax revolution of the neoliberal years, to restore part of the wealth they sought in the public fund. This is therefore a tax on abnormal wealth accumulation in other circumstances. The neo-liberal years’ plans for a massive tax cut for capital and business owners were never presented to the nation, as voters would then have rejected them. Now is the time to show that will in action.
I. We tax the rich:
Capital income and high-income level
During the neo-liberal years, capital income was separated from other income and taxes on it were reduced. Today, the marginal tax on wage income is 46.25%, while the marginal tax on capital income is more than half as low, 22%. The lowest paid people in the labor market pay almost the same percentage of their income in tax as the richest capital owners. Wage income is taxable but capital income is not. The poor disabled person and the retired woman pay local taxes to their municipality, but the richest owner of capital does not pay a penny.
This is an injustice that must be rectified. Capital income should bear the same tax as wage income and the tax level should be stepped and steep. High-income tax primarily applies when capital income and wage income have been included in the same tax system and are taxed together. With the joint taxation of all income, the public with low capital income would enjoy a tax reduction due to the personal allowance of the current tax rules on capital income tax.
In the post-war years, a time of great economic growth, marginal taxes on these incomes were around and over 90% in our part of the world. In the first steps, a 60% tax on income in excess of 5 m.kr. per month, 75% level of income in excess of 20 m.kr. per month and a 90% level of income in excess of 50 m.kr. in a month.
We tax the rich:
Inheritance tax is basically income tax. Those who inherit receive assets and money and this should be taxed as other income. This is the basic rule. There is, however, an agreement in society that the normal inheritance from one generation to the next from tax collection should be excluded, that support systems within the families should be respected. This is in the spirit of the post-war tax system. The marginal tax on inheritance tax, the highest tax level, was comparable to the highest level of personal income tax.
The reduction of the inheritance tax in the neoliberal years has, first and foremost, benefited the wealthy, creating a hereditary class of wealthy people who inherit not only great wealth but the power and social status that comes with it. The increase in inheritance tax is therefore a natural defensive response of the democratic system of the public, a protection against our society turning back into the domain of the hereditary class.
The tax level of inheritance tax should be the same as income tax. The tax-free limit, on the other hand, should be based on good housing prices. If you inherit 75 m.kr. then 60 m.kr. tax-free and 15 m.kr. carry ordinary income tax. You then paid ISK 4.8 million in inheritance tax and kept ISK 70.2 million. Anyone who inherits ISK 20 billion, on the other hand, would pay according to the same rules as the tax levels above ISK 17.8 billion in inheritance tax and keep 2 .2 billion. Today you would pay 7 m.kr. in inheritance tax and retain 68 m.kr. but the person who inherited the wealth pays just under 2 billion but retains just over 18 billion, paying only about 10% tax.
We tax the rich:
The Socialist Party’s fourth offer to voters in the autumn elections to restore tax collection on the rich is to impose a wealth tax to recover what the richest people got out of common funds in the neoliberal years, to tax capital income in the same way as wage income, set high income levels inheritance in the same way as other income if it exceeds the price of a good apartment.
The purpose of this is not only to generate revenue for the state and rural funds, but also to increase justice and the distribution of power within society. Unrestrained capitalism that the tax system does not oppose creates a dictatorship of wealth, a society of injustice and cruelty. The tax system is therefore a tool for implementing greater love, reconciliation and justice.
But this is not enough. The rich have innumerable ways to evade tax payments, both within perverted laws and by hiding assets, falsifying income and evading tax payments in other ways. Low taxes on the richest are just another arm of the tax policy of the cruel economy. The other is a myriad of exemptions and poor tax controls.
Another goal of the tax policy of the socialist tax system is therefore to close the streets in the tax system and greatly increase tax control for large companies and the rich.
The big housing revolution – Eliminate the housing crisis: 30 thousand apartments in ten years
Housing costs are the most serious threat to the living standards of the population today. The most important task of the public sector is to ensure safe and affordable housing for all Icelanders. No single project will have as good a general impact on society in the next election period as what the Socialist Party of Iceland calls the Great Housing Revolution.
What’s the score?
According to official surveys, more than a third of families in Iceland have difficulty making ends meet. The main reason for this is high housing costs. Solving a persistent housing crisis is therefore the most important step in improving general living standards.
The historical reason for the housing crisis is, on the one hand, that the Icelandic government did not take steps comparable to the neighboring countries in the last century in the development of a social housing system, and on the other hand, a complete overhaul of housing in the neo-liberal years. The destruction of workers’ housing and the dramatic weakening of social rented housing were probably the most serious consequences for the living standards of the population during this tragic period.
But the collapse of other parts of the housing system also had a serious impact on the performance and security of the public. With the auction of plots of land and the takeover of building contractors, which were previously largely controlled by the public, either directly or indirectly through building cooperatives, house prices rose far in excess of construction costs. Oligopolistic companies managed to maintain a shortage in order to maximize their burden and thus managed to double the cost of housing for the public in just a few decades. The entry of large investors into the rental market then undermined the living standards of tenants.
The result of the neo-liberal years was a far too expensive housing market that sucked endless money from the masses and brought the few, rich and powerful, at the same time as tens of thousands of households were kept in poverty and gnawing insecurity.
The social housing system is between one third and up to half of the housing in our neighboring countries. Here it is well below 10 percent. The main reason for poorer living conditions here than in neighboring countries is that a larger proportion of households in Iceland try to survive in an unrestricted housing market; handed over to contractors and landlords and large fluctuations in house prices and interest rates in the financial market.
What is the need?
The estimated accumulated housing shortage is currently around 4,000 apartments. This is a plan based on unchanged basic assumptions of the current housing market. This figure therefore does not include long waiting lists for the social housing of the municipalities, waiting lists for apartments for the disabled, students or the elderly, nor an assessment of what is needed to eliminate the modern neighborhoods; industrial housing and other uninhabitable housing that many of the lowest income earners have to accept. The Socialist Party of Iceland therefore estimates the accumulated housing need today at 8,000 flats.
It is estimated that 2,000 apartments will need to be built annually in the coming years. As before, this is a plan to maintain the housing market unchanged. It does not take into account young people living in parental homes but would like to have the opportunity to start their own home, lower-income families who would prefer safer housing if it were available or homeless people living with relatives and friends. It is the opinion of the Socialist Party of Iceland that it is more appropriate to target the need for about 2,200 apartments annually in the coming years.
A total of 30,000 new apartments are needed over the next ten years. All kinds of housing are needed; large apartments for families with many children, smaller apartments for individuals, apartments for students, the disabled and the elderly, temporary housing for people at a turning point in life, apartments in the capital area and in the countryside, apartments in cities, towns, villages and countryside.
But the need is first and foremost for secure housing that is protected from fluctuations in house prices and interest rates in the capital market. If all these apartments are built within a social housing system over the next ten years, the proportion of that system as a whole will increase from just over 8% to almost 25%. As before, the proportion of social housing would be among the lowest in our part of the world.
What is the solution?
The Socialist Party of Iceland is offering voters the opportunity to vote this autumn with the great housing revolution, the construction of 30,000 apartments in ten years, which will go a long way in eliminating the local housing crisis.
This will be done by establishing a public housing fund that will raise 70% of the necessary capital by issuing bonds that will be sold to pension funds and other investors. The collateral of the bonds is secure, residential housing in a secure long-term lease, and will therefore bear interest comparable to government bonds. About 13% of the cost will be provided by the state and municipalities in the form of plots and 17% will come as a loan from the state treasury at the lowest interest rate, a loan that will be repaid during the life of the apartments. The cost of capital will therefore be as low as possible today.
The public housing fund will then rent housing to public rental associations, which can be of various types: municipal rental associations, student associations, disabled associations, the elderly, single parents or any kind of public association, but also the tenants’ own general rental association, user-managed rental housing associations. The rental companies are not limited to one house and within one house there may be apartments belonging to different rental companies; e.g. disabled people, students, the elderly, single parents and more, as well as people who belong to other rental companies.
The design and decision on the structure of the housing can come from both the Public Housing Fund or the Rent Associations. Once an agreement has been reached, the Housing Fund will tender for the construction of the apartments. In order to ensure cheap construction and to break down the oligopoly of contractors, the state will establish the State Construction Association and promote the establishment of municipal construction associations and cooperatives of construction workers. Together, these construction companies will implement non-profit housing development to get rid of the outrageous burdens of contractors. Burdens, profits and dividends do not belong in the social housing system.
It is the role of the Public Housing Fund to adjust its same financing to the life of the houses, their maintenance and the normal operating costs of the Rental Companies. The goal is not for one family to repay the financing, construction and operating costs of the apartments over forty years, but these costs will be spread over about 120 years. With this, it can be expected that rental prices in this new system will be about half lower than is customary today within non-profit companies and much lower than is customary in the untamed rental market.
Those who would rather own an apartment than rent it can do so by contributing equity at the beginning of the contract period and owning the apartment against the Housing Fund. The rental price of the rental companies is adjusted to the lifespan of the apartments and rent therefore pays the construction cost over a very long period of time. If the owners want their holding to grow, they can agree to pay higher monthly payments, depending on the capacity and goals of how fast the holding grows.
Owner-occupied flats in this system will not be sold on the market any more than the old workers’ flats, but people will have their equity contribution and shareholdings calculated based on the same interest terms as pension funds receive from the Public Housing Fund. This system is closed and protects the residents from market fluctuations and apartments are sold back into this closed system.
What will be the effect?
The great housing revolution will take control of the housing system from contractors, large investors, banks and financial companies, and transfer power to the public. Apartments will be built according to the needs, hopes and expectations of the public and not for-profit companies. Hustlers can build their apartments but they will be outside the public system and enjoy no support from the state treasury. The supply of affordable housing within the great housing revolution will hold back housing price increases in the wild market, as price increases in recent years have been driven by a planned shortage of housing.
A reduction in housing costs will lead to a general improvement in living standards. The general public, and preferably those currently in the wild rental market; young people, immigrants and low-income people will have more at hand and will therefore stimulate the economy with funds that previously flowed into the funds of the few and the rich. People’s anxiety will decrease, fewer people will have to work two or three days to make ends meet, slavery will decrease, people will have more time with their children, relatives and friends and have more time to socialize and actively participate in society.
The construction of the apartments will create employment and stimulate the economy after the economic contraction of the coronavirus epidemic. The design and implementation of apartments and neighborhoods will be a lever for society and the development of different residential cores will increase the diversity of human life.
The ending of the housing crisis will be like the coming of spring after a long, hard winter.
Can we do this?
The scope of the project can be estimated based on Statistics Iceland’s estimate of the construction cost of a so-called index house, which is a cheap apartment in an apartment building without plot costs. According to Statistics Iceland’s calculations, it costs just over 16.8 m.kr. to build a 70 square meter apartment today. If we add 20% on top of this cost for common areas and 10% in design, where the goal is to build good apartments that are suitable for people and last well, then it would cost less than 22 m.kr. to build such an apartment today. 30 thousand such apartments cost over ISK 650 billion. As this is a huge project, it offers great potential to keep costs down with economies of scale and size.
The project is no bigger than this, about 65 billion ISK in construction costs per year for ten years. That is the effort to end the housing crisis.
The Confederation of Icelandic Industries estimates that the neoliberal years’ neglect costs of infrastructure such as roads, ports, utilities and sewers amounted to ISK 420 billion. It should therefore come as no surprise to anyone that it costs around ISK 650 billion to overcome the neo-liberal years’ neglect of the social housing system. And from a societal point of view, it’s even more important.
When the Swedes embarked on their million-dollar project, the construction of a million apartments over ten years, in the 1960s and 1970s, its scope was similar to that if Icelanders aimed to build 45,000 apartments over the next ten years. The first workers’ housing units in Iceland were built during the Great Depression and a major effort was made to build apartments for the disabled at Hátún after the herring collapse in 1968. More examples can be found domestically and abroad, of major housing conflicts that have all benefited. There are no examples in all of human history of major housing initiatives that did not have a far-reaching positive impact on communities.
However, there are countless examples in history of how harmful the persistent housing crisis is to people, families and society. We have experienced such damage in recent decades.
The housing crisis is a political decision, no less than housing construction is politics. It was the decision of the Icelandic government to break down the small social housing system that existed here, to completely overhaul the housing system and maintain a housing shortage here in order to maximize profits from the poor. This has been the housing policy of the ruling economy of cruelty, the policy of many previous governments.
The housing policy of the caring economy is the great housing revolution that will revolutionize the housing issues of the people over the next ten years. A vote for the socialist party of Iceland is a vote for a caring economy and the great housing revolution, the construction of 30,000 apartments in ten years and the elimination of the housing crisis.
Lower taxes for the general public
SOCIAL TAX POLICY PART V:
TAX REDUCTION TO THE PUBLIC
Fiscal developments under neoliberalism can be defined in several stages. First, taxes on capital owners and large corporations were reduced with the promise that this would not lead to a loss of revenue for public funds because tax cuts would stimulate the economy so much that capital owners and corporations would actually pay higher taxes even if the tax rate were reduced. In addition, a reduction in taxes on capital and business owners would reduce tax evasion and avoidance.
Of course, this did not work out. At first, public services were not cut, but debts were accumulated in the confidence that tax revenues would soon rise. When this did not happen, it was proposed that the Treasury’s assets be sold to the wealthy in order to reduce interest costs and reduce debt. The wealthy were reportedly offered to buy public property with the same money they received due to the tax cuts, and the goal was to finance the tax cuts.
Of course, this did not improve the Treasury’s operating position. There was still a hole after the tax cuts for the rich. The Treasury spent more than it earned because the catch had been reduced. It was also decided to charge for services that were previously free of charge, services that had been considered to be paid for by the taxes. This applied to the health service, the education system and then almost all public services.
By introducing payments into the public service, a step towards its marketisation and privatization was prepared. If the service was not part of the co-insurance we pay for with our taxes, if it is like any other service we pay for; does it matter who runs the service? Was asked. And the wealthy, who had previously been mainly in the business world, increasingly moved into areas that had previously belonged to the social arena.
Privatization did not reduce the cost to the Treasury, on the contrary, dividends were added to the owners of the companies that took over public operations. The Treasury was thus in a bad position after the tax cut for the rich, despite the sale of assets, tariffs for public services and privatization. Then there was nothing left but to raise taxes on the population, let them finance a tax cut for the rich with an increased tax burden.
This is the fiscal storyline of the neoliberal years. This did not happen exactly in that order; tax increases for the population began soon and before privatization was in full swing; but this describes well how the cogs of neoliberalism worked.
The Socialists intend to reverse the development of neoliberalism, restore public power from the wealthy, wealth, property and resources, and rebuild public services. But here we want to explain how the Socialists intend to lighten the tax burden of the neoliberal years on the public.
V. Public tax cuts: Poverty should not be taxed
When withholding tax was introduced, people on the minimum wage paid no taxes and thus retirees, the disabled, students and people had lower incomes than the minimum wage. Today, those on the minimum wage pay about 17% of their income in tax, more than ISK 55,000. However, it is known that people on the minimum wage have great difficulty in making ends meet.
People on the lowest disability benefits, 240 thous. kr. per month, pays almost 25 thous. kr. of them in tax. People who are supported by municipalities receive almost 213 thous. kr. per month and pays more than 16 thous. kr. in tax. This is completely unprotected.
Before the neo-liberal era, none of these people paid taxes. It is immoral for the Minister of Finance to go to the poorest people, people who do not have food for the rest of the month, and take money from it to run the state treasury. A treasury based on such injustice is fundamentally immoral.
The Socialists completely reject the idea that poverty is taxed in this way. It should be established in law that it is not permitted to collect income tax or excise duty from people who have a lower income than the normal cost of living. The tax system needs to be changed by lowering the minimum tax level and raising the personal allowance, but raising the tax rate in the upper levels so that tax cuts for people below the poverty line do not reduce the tax burden throughout the tax bracket.
V. Tax cuts for the general public: Taxes on medium and lower incomes reduced
The income tax on the entire population was raised dramatically during the neoliberal years. This can be seen, for example, in the fact that the budget for 1991 assumed that personal income tax would be around ISK 12.8 billion or ISK 42.9 billion at current value. The budget for 2021, on the other hand, assumes that personal income tax will return ISK 186.6 billion to the Treasury.
Wages have, of course, risen along the way, but not that much. If the income tax had followed wage developments, it should be around ISK 83.5 billion this year. The difference is more than one hundred billion, 103.1 billion ISK, which the state collects more from workers today than thirty years ago. This clearly shows who paid for the tax cuts of capital and business owners. And there were no small amounts that were transferred in between.
Another way to highlight this is to point out that in 1991 it was assumed that 12.6 per cent of the Treasury’s revenue would come from personal income tax. Today, this ratio is 24.1%, despite the fact that capital income has been taken from other income. By this measure, tax collection has gone from ISK 97.5 billion to ISK 186.6 billion. The personal income tax was 3.2% of GDP in 1991 but will be around 6.0% this year. No matter what measure is used, tax collection by the public through personal income tax has almost doubled in the neo-liberal years, the years in which the Independence Party claims to have reduced taxes.
The ratio of Treasury revenue to GDP in the 1991 budget was 25.3%, but this year it is expected to be 24.7%. The difference is very small, ISK 18.8 billion. The main fiscal theme of the neo-liberal years was the shift of the tax burden from the rich to the general public. The tax cuts were all for the rich. The public received only tax increases.
If we take the perspective of the individuals, the tax-free limit in 1991 was 192 thous. kr. at current value but they are today almost 162 thous. kr. During these thirty years, however, wages have risen significantly above prices. Based on the wage index, the tax-free limit was just over 374 thous. kr. in 1991 but are as previously stated almost 162 thous. kr. today. The difference is striking, frightening.
Today, the minimum wage is 351 thous. kr. in a month. Of these, people pay almost 60 thous. kr. in tax or about 17%. In 1991, no tax was paid on the lowest wage, 0%. The low-income people have lost 720 thous. kr. per year in the tax in excess of what it paid for neoliberalism.
Today, the median total salary is around 750 thous. kr. in a month. Of these, people pay about 211 thous. kr. in tax or 28.2%. If we bring this wage back to 1991 with the wage index and tax it according to the tax law in force at the time, the tax rate would be 19.9%. The average person has lost 747 thous. kr. per year in the tax in excess of what he paid for neoliberalism.
The Socialists’ offer is to unwind the tax changes of the neo-liberal years and reduce the income tax burden on medium and lower incomes by 700 thousand. kr. in a year. This is not a more revolutionary idea than that it would only bring us to the justice that prevailed thirty years ago and had prevailed for decades.
V. Tax cuts for the general public: Child benefits increased
One of the hallmarks of the neoliberal years is the breakdown of child benefits. And this goes hand in hand with the weaker economic position of young people, which in turn is the result of the collapse of the entire housing system and the weaker position of workers in the labor market. This has undermined the living standards of young people, many of whom are on the fringes of the housing market, where housing costs are high, and on the fringes of the labor market, where wages are low and employment is precarious. Young people have smaller assets but still often owe a lot, for example student loans. And young people have a heavier child support burden.
In this light, it could be assumed that child benefits had been increased significantly during the neo-liberal era. But that was not a greeting at all. On the contrary, child benefits were cut sharply.
According to the budget for 2021, just under ISK 14 billion is to be spent on child benefits this year. There are about 161 thous. kr. per child. In 1991, before neoliberalism began to erode the tax system, child benefits were just over ISK 16 billion at current value, or almost ISK 224,000. kr. per child, but then the age of consent was 16 years and not 18.
But it is more natural to target these variables on the turnover of the economy than price changes. The child benefit was 1.2% of GDP in 1991, but this year it is just over 0.4%. In order to increase child benefits so that they will be the same proportion of GDP this year as in 1991, children would have to be paid ISK 37.5 billion this year. Child benefits have in fact decreased by ISK 23.5 billion during this thirty-year period, among other things to finance tax cuts for capital and business owners.
In comparison, it would cost around ISK 52.9 billion to give all children in the country a personal discount that would be payable if the parents did not use it. We should aim for that in a few safe steps so that all children receive child benefit of over 50 thousand. kr. per month, the same amount as adults receive in personal discount. In part, the increase would be financed by steeper tax levels and high-income brackets, so that parents with incomes in the third tax bracket would be equal behind all families with children with good middle-income incomes and would be much better off.
V. Tax cuts for the general public: Housing benefits increased
Housing support also fell during the neoliberal years, but not as much as child benefits. Interest rate subsidies were 0.63 per cent of GDP in 1991, but housing support is now 0.44 per cent of GDP. The difference is equivalent to the Treasury having to pay out ISK 19.7 billion in housing support, ISK 6 billion more than is the case.
The difference, however, is that in recent years there has been a more severe housing crisis than has been seen since the end of the war. The increase in housing costs has affected the household accounts of tens of thousands of middle- and lower-income households. Those squeezed between low incomes and high rents have been pushed into deep poverty or unbridled slavery. Many are in two, even three jobs to rent and food for the rest of the month for themselves and their children. Many homes are in a state of emergency. And therefore must be met with emergency measures.
Of course, the state must solve the housing crisis. On the one hand by building 30,000 social housing units over ten years, as the Socialists have proposed, and on the other hand, by measures to curb the rental market, as the Socialists will propose in their offer to tenants. But until these measures take effect on the housing crisis and the anarchy in the rental market, the Treasury must compensate those who suffer in the unrestricted housing market.
No one should have to pay more than a quarter of their income in housing costs. this means that low-wage earners with 351 thous. kr. per month and almost 282 thous. kr. paid out according to the current tax rules should not pay more than just over 70 thous. kr. in rent. If the situation in the rental market is such that, due to the inaction of the authorities, people with this income have to rent a small apartment for 230 thous. ISK, as is common today, the Treasury needs to provide these people with 160 thous. kr. in housing subsidy. The maximum grant today is over 32 thous. kr. does not come close to solving the problems of these people.
Such a high housing subsidy that flows from the state through tenants to landlords is a kind of blood money. They are like a ransom paid to bribes to free tenants from starvation. Of course, it would be more beneficial for the state to build housing to alleviate the housing crisis and free people and put a rental ceiling on it to protect tenants from rent. But until that is done, tenants must be supported out of poverty. It is not the tenants’ fault that the landlord is as he is; tenants are the people who will be exposed to the market, bear the cost of its embezzlement without bearing any blame for the situation.
The Socialists will pass on the costs of the collapse of the housing market to those responsible, the people who have ruined the entire housing system, and to transfer the money to tenants who have had to endure the consequences of the actions of the housing authorities.
V. Tax cuts for the general public: Tariffs stopped
Tariffs for public services are one of the tools of neoliberalism to transfer power and wealth to the rich. The purpose of the tariff is to market services that were previously outside the market, getting people used to paying for education and health care like any other service.
The levy is also intended to make a larger part of the population tax-exempt. The richest people consider themselves losing out on paying taxes, they pay more into the state treasury than they get back. In the post-war years, this applied to less than 1% of the population. But with income linkages and tariffs, a larger group has calculated on the same conclusion that it pays more to the state than it gets back. This is often miscalculated, as people are tempted to forget that they can lose their health due to illness, accident or age and underestimate the support of society, which is often difficult to identify in a simple calculation example. But neoliberalism has succeeded, with more people today estimating that the benefits of tax cuts will be greater than the increase in public services.
Tariffs are thus primarily political, part of a propaganda war, and have no social purpose. Healthcare that collects entrance fees will not be better run for it. And public services, primarily medical services and education, are not of the nature of controlling demand by price. There is a very small risk of people overusing this service, a much higher risk of people overusing it.
And that is exactly the result of the neoliberal years. The less well-off refuse health care and education because of the tariffs. The systems we built in the last century precisely to increase inequality between people are pushing for inequality today.
The state and our common funds are our common property. With public services, this acts as mutual insurance for the population and for society as a whole. It is better for everyone if we pay for medical care while we are fully healthy in the labor market. It is a completely wrong idea to charge people when they have become ill and have enough problems with their lives due to illness and its consequences, including a drop in income due to less work.
The same applies to education and other public services. It is natural that we pay for education when we have enjoyed it, after entering the labor market, rather than when we have little income in school.
A prerequisite for a strong society is free public services and infrastructure. It improves the living standards of the entire population and most of those with the lowest incomes, thus acting as an equalizer. And equality is the most important goal if we want to build trust, compassion and love within society.
But free infrastructure is also important for the economy. They encourage competition by lowering the start-up costs of companies, as all companies have equal access to infrastructure. Free public services provide companies with educated and healthier staff and take care of the children while the parents are at work. It was the experience of all countries in our part of the world that the vigorous development of free public infrastructure and services was a prerequisite for increased prosperity. The breakdown of this infrastructure during the neoliberal era is a threat to society.
The Socialists therefore completely reject all ideas about the marketing and privatization of society’s infrastructure and basic systems and are opposed to any tariffs for public services. Instead, we should begin a massive build-up of public infrastructure to meet the challenges of the future to promote employment and general prosperity here. This will only be done with societal goals in mind.
The first steps in this direction would be to make free use of the lowest income groups in health care, education and other basic public service systems; children, students, the disabled, pensioners and people on municipal support. And then take the next step with the aim of completely stopping charging for public services.
V. Public tax cuts: Socialist offer
The Socialist Party’s fourth offer to voters in this autumn’s election for a tax cut to the public includes a sharp reduction in the income tax on middle-income earners, including stopping the taxation of poverty, raising the personal allowance significantly, child benefits and housing benefits.
The precondition for building a just society in Iceland is that the tax burden will be lightened by the public and it will be moved to where it belongs. It is an equally urgent task to rebuild the support systems within the tax system, child and housing benefits. Such systems are a prerequisite for greater equality and for all the country’s inhabitants to flourish.
But the tax shift from the rich to the general public was not the only one in the neo-liberal years. At the same time, the tax environment for companies was changed so that it best served the richest capital owners and the largest companies, but much less self-employed, small companies and medium-sized companies. The tax system was in fact used to protect large companies from competition from the smaller ones and to reduce recruitment in all industries. The result was the financialization of the economy, which reduced the power of production and service companies. This is the sixth chapter in the Socialists’ offer to voters on the tax policy of the charity economy, on how to reduce taxes on small businesses and strengthen the economy below.
Let’s stop the violence epidemic
After decades and centuries of women’s struggle for recognition by society and the government of gender-based violence and harassment, it’s time for public action. Everyone should be aware of the damage that gender-based violence has caused, especially to women and children, and that violence is ingrained, dominant and systematic in society. The time for awakening has passed and the facts are available. Now action is needed.
The Socialist Party of Iceland invites voters to vote with the following measures in the parliamentary elections this autumn:
Violent surveillance will be put in place that investigates, at the suggestion or initiative of workplaces, schools and public places and has the power to respond where it is shown that violence and harassment are rampant, remove perpetrators, deprive places of work permits and use other means to secure staff, students and guests safety.
Supervision should focus specifically on those places where power imbalances are high due to income differences, age differences or different origins, positions or powers.
An independent police and prosecution institute will be set up with qualified staff who specialize in the investigation and proceedings of gender-based violence cases, develop investigative methods suitable for victims and the seriousness of cases, support court proceedings and support for victims before and after litigation.
Victims of crime are given a free trial to pursue civil cases against criminals.
The most serious acts of violence take place within the home, where people live with the most prolonged and serious violence. The government’s response to domestic violence must be commensurate with its severity and prevalence. Offenders must always be removed from homes and victims must be protected from offenders. A home shall be operated for offenders who are not imprisoned or remanded in custody. Representatives of the violent surveillance shall always appear at the scene and the child protection authorities if there are children in the home, together with the response and investigative police, and protect the interests of victims in investigating cases with the police, the prosecution and other public proceedings and aftermaths. Victims receive appropriate treatment and follow-up for the violence and the trauma that accompanies it.
Courses will be developed for all staff who work with children to increase knowledge of signs of violence against children and how to respond. Those who work with children will be required to have completed such courses.
Courses will be held for the staff of health care institutions and those who work with the personal assistance of people living with a disability, physical or mental, or a disability of some kind. The training is intended to prevent violence at the hands of caregivers, whether consciously or unconsciously, and how best to know its symptoms and respond.
It will also be required that officials in public institutions have completed courses on violence and the same requirements will be made for all private companies in business with the state and municipalities.
Curriculum on gender studies, sexual violence and other violence will be developed and implemented for all grades of preschool, primary school and upper secondary school. Educational material will be prepared for the whole public.
Victims of crime will be guaranteed treatment for their trauma. Compensation and damages shall be paid from public funds to those who have suffered violence and harm and are unable to claim such compensation in civil cases. The Compensation Committee aims for a lower standard of proof than is the case in criminal cases.
Gender-based violence is a serious evil in society that causes great personal harm, reduces people’s activity and causes widespread insecurity in society. It is therefore important to work to reduce this epidemic as much as possible. It is important to increase everyone’s awareness of the physical and mental consequences of violence, as well as to build institutions and resources to deal with them.
This is the role of the public sector, to adapt the institutions of society to the plight of the people, to defend them against the threat, to support it and to strengthen it.