Taxing questions

August 2021 Forums General discussion Taxing questions

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  • #219325
    Matthew Culbert
    Keymaster

    F.Y.I.
    This recent short piece by Per F. Andersson on an L.S.E. blog, demonstrates that ‘left-wing’ governments tax more regressively in proportional representation systems and more progressively in majoritarian ones.

    He illustrates how political risk shapes the strategies of key actors and helps explain the divergence in tax policy using the examples of Swedish and British tax policy after 1945.
    https://blogs.lse.ac.uk/politicsandpolicy/electoral-systems-tax-policy/

    It appears they are caught on the horns of a superficial political expediency dilemna of wanting to be guvnors and appearing progressive while keeping their capitalist paymasters sweet.

    The Discord discussion covered the Taxation question quite thoroughly from this page on,
    https://www.worldsocialism.org/spgb/audio/page/10/

    THE F.A.Q. WORKSHOP: THE TAX ARGUMENT PT.1
    Held on Discord server, Thursday 28th May, 2020 – introduced by Paddy Shannon The Tax Argument pt.1

    THE FAQ WORKSHOP (DISCORD) 3PM THE TAX ARGUMENT (REPRISE) 🗓
    Last week’s discussion was so popular people asked for another FAQ session on it!

    AFTERNOON DISCORD WORKSHOP 3PM – THE TAX ARGUMENT 🗓
    Simple enough surely? But nobody ever seems to get it. Let’s figure out the best way to approach this.

    #219345
    alanjjohnstone
    Participant

    It may have been addressed at the Discords talks but one of my questions is that while I understand that the tax burden ultimately rests upon the backs of the capitalist class because of the Law of Value, that the level of wages paid to the worker must reflect the amount paid on his or her behalf by the employer to the State, there exists a time-gap.

    Wages are determined by the contesting forces of class struggle. If taxes goes up, (like any other cost of living) workers are required to engage in industrial struggle to raise the price of their labour-power to compensate.

    But that requires time and strength to organise to successfully extract pay-rises from the employer. Nor is it evenly spread throughout our class.

    If income tax is raised tomorrow by 10%, it is a wage cut of 10% until workers eventually manage to obtain a 10% pay rise. And that is not automatic. So for a temporary period only, a tax increase is beneficial to the employers in that the cost of government is now being paid, albeit in part, by the worker.

    I rarely read this important caveat in our explanation.

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