[OPE] US tax resistance?

>From the NYT blogs April 15, 2009:

"From the 1790s to No New Taxes", by Reuven S. Avi-Yonah (professor of law at the University of Michigan):

The current wave of tax protests are a reflection of this post-1992 Republican mentality. They are engineered by political operatives and are far from reflective of general public attitudes toward taxes or toward the government. http://roomfordebate.blogs.nytimes.com/2009/04/15/tax-protests-that-changed-%20history/

"The Biggest Modern Revolt: Proposition 13", by Bruce E. Cain is (professor of political science at U.C. Berkeley):

What we see today in California is the public face of a continuous tax revolt, fueled by the unreconciled public demand for a New York level of public services at an Alabama level of taxation. http://roomfordebate.blogs.nytimes.com/2009/04/15/tax-protests-that-changed-%20history/

What nobody mentions, is the nature of the modern tax system itself - all the experts however agree it's a legal nightmare, a chaos, a labyrinth, a parastically perverse monstrosity with astronomic costs of tax collection and tax dodging. It's a system that has lost its sense of purpose, and a rational relationship between means and ends. The bourgeoisie waffles about tax havens, but the core of the problem is the tax system itself. Few have the nerve to attack it, because it is a hornets' nest of competing interests. Mr Obama has a golden opportunity to put a broom through it all, and introduce a cost-effective, simple and fair graduated turnover/consumption tax which:

- is difficult to dodge, efficient to administer, cheaper to collect and fairer to the real activities of citizens,
- is much more responsive to social, economic and ecological policy objectives, and
- creates much better quality financial data,

but, instead, there seems to be a cramping down of his administration into a "let's avoid anybody going offside" approach. But why not aim for excellence, and set an example for the world? As it is now, the best approach to the US tax system is to junk it. When you're in a financial crisis, it's moreover a perfectly justifiable move. You take off a large chunk of the tax burden on labor, so it costs business less money to hire, and workers lose less of their income. Then if you buy a loaf of bread, the tax is (say) 5%. If you buy (say) a luxury car, the tax is 20%. All the experts agree that a turnover tax, if appropriately designed, is a far better alternative than a rotten, unjust tax system which has grown so complex nobody understands it anyway, and just enriches the wealthy some more.

Do you know how many pages of tax legislation there are in the US statutes ? More than 54,800 pages and counting http://www.cch.com/. I underestimated it in another article of mine http://info.interactivist.net/node/2936 There are more than 500 different US tax forms, and the IRS delivers more than 30 million tax penalties each year... The business of preparing tax statements professionally occupies more than a million Americans, most of whom presumably have sufficient skills to do something far more wealth-creating.

Mr Obama says things like "well, we cannot nationalise financial institutions, that's far too complex to do in a big country like ours" etc. but the point is that the largest chunk of "complexity" is a legal construction which doesn't even need to be there. If you spend more money propping up a rotting system then you get out of it, it's time to think about a change. Marxists usually don't talk about taxation, but that is a big mistake, because nowadays taxes represent an enormous chunk of newly produced surplus-value which the state appropriates, mostly without contracting to supply anything in particular in return for the money it takes. In Marx's time, tax was something like 5-10% of GDP, now it is 25-50% of GDP (for some comparisons see e.g. http://www.quotenet.nl/Tax_Misery_2000_20081.php or http://farm4.static.flickr.com/3020/2400694680_9b399a9c2a.jpg etc.

If Marx's law of the falling tendency of the industrial rate of profit is true, you can justabout guarantee that "eventually" the state will adopt a tax approach of the kind I indicated, although there is no guarantee that the system implemented will be technically and morally the best system. In that sense, we're just somewhat ahead of our time here. I say "eventually" deliberately since obviously the state policy is influenced by the outcome of a configuration of class forces, an outcome of the balance of power between social classes and class fractions. I used to live in New Zealand, where the government completely overhauled the tax system. I think they could make it fairer, but they couldn't make it more efficient - it's acknowledged to be among the most efficient in the world. This has nothing to do with "complexity" - a system to administer (say) 10 million people doesn't differ much in organisation from a system to administer 100 million - but with whether the polity has a mandate and a will to do it, plus some visionary imagination.

Of course the orthodox Marxists are going to yell "it's evil reformism!", but consider that the state takes a large chunk of your salary, without necessarily offering you anything in particular in return. It's one thing to acknowledge the need to fulfill your social obligations financially, but another thing to give away your own money with almost no say at all about what will be done with that money.

Keynes (Monetary Reform, 1924) said inflationary finance is the form of taxation "which the public find hardest to evade and even the weakest government can enforce, when it can enforce nothing else." But why should the world be forever the slave of a defunct economist? Let's face it, the bourgeois elites are financial imbeciles, they don't even know what's good for the survival of their own system.

Jurriaan

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Received on Thu Apr 16 16:16:02 2009