No such thing as "fair" taxation, unless it's only on profits and wealth!

Drucken
Workers' Fight workplace bulletin editorials
13 March 2012

The coming local elections - and, obviously, the prospect of losing many seats - has triggered another storm in the ConDem tea-cup. The Lib-Dems have suddenly recalled a past election pledge they made, to defend low income households. And after the bankers' bonus scandal, they are now trying hard to appear "tough on the rich". Which means producing plenty of hot air proposals like the "mansion tax" and/or "tycoon tax" - which would supposedly do the trick!

As for the Tories, they are busy trying to square a circle by conjuring up tax cuts which would primarily benefit high income-earners, but would look, magically, as if they benefited everyone else as well!

End commercial secrecy!

Clegg's so-called "tycoon tax" would make the very rich pay a minimum proportion of their total earnings to the tax man, including those earnings they never used to declare... But even that has apparently become too much for Clegg, since he has now toned down his proposal to simply "calling time on the tycoon tax dodgers" - but without saying how, exactly, he intends to "call time"!

The truth is, that unlike workers whose income tax is taken directly out of their wages, the wealthy and their companies pay armies of accountants to play the system in order to cut their tax bills. They have all sorts of ways of hiding earnings (legally or not!), under the cover of "shelf" companies located in one tax haven or another. And even if they are caught red-handed, the tax man bends over backwards to offer a cheap deal to the culprit. As with Vodaphone, which, after losing a long court battle over unpaid tax was let off paying nearly a billion pounds. In fact, there is an estimated £25bn in unpaid tax outstanding from British companies. Most recently, Barclays Bank was stopped from using "highly abusive" tax avoidance - but only after it saved £500m by doing so!

As long as commercial secrecy continues to conceal their financial manipulations, the capitalist "tax dodgers" will have nothing to fear from the Cleggs of this world - even if their words are not just electioneering rhetoric.

Double theft

But that is not even the real scandal. The real scandal is a tax system designed to rob the working class majority of the population.

Workers' labour produces all the wealth in this society. It then appears as the income of private and public companies. Workers get robbed a first time, because the wages they get are not equivalent to the amount of wealth they have created, but instead, just about enough to make a living - and often, not even enough! Most of the value they have produced remains in the hands of companies and, therefore, collectively, in the hands of the capitalist class.

It is this wealth which should be used to fund public infrastructure and services. But this doesn't happen, because the capitalists prefer to keep it for their own purposes.

So it is the working class which is expected to pay a second time, out of its wages, for the operation of the state and the social infrastructure we all need. And workers are not made to pay just through income tax, but also through council tax and VAT, both of which are even more unjust, since they do not take into account a household's ability to pay. In other words, workers get robbed twice - by the bosses through the wage system and then a second time, through the tax system.

Workers' control!

This is why, above and beyond its obvious bias in favour of the wealthy, the tax system cannot be "fair" - not as long as the larger part of its revenue comes from workers' wages.

Indeed, there can be no "fair" system of taxation without taking all taxes directly from where the wealth is created, as well as from the wealth created in the past which has been accumulated over time. To put it another way, a "fair" tax system would collect most, if not all, of its revenue from company profits and the accumulated wealth and income of the richest - since they are the ones who, for now at least, have the monopoly over society's wealth.

By exercising its control over companies' accounts on a daily basis, the working class in general, and in particular the large contingent of anonymous low-paid employees working in the banks, would have the means to implement such a system - which would not only be "fair", but far more effective than today's purpose-made patchwork of pro-business loopholes!