Taxing issues

From the BBC:

Over a five year period up to 2010 (the latest data available) the number of UK taxpayers with an annual taxable income over £10m more than doubled from 131 to 274.

In 2010 they owed £2.1 billion between them. This is a good and hard data. Whilst it doesn't cover all the super rich (after all, some manage to arrange their affairs so they don't have to pay tax on their super incomes); but we know that these 274 people had more than £10 million in earnings in 2010. My rough maths makes that a total of over £5 billion in annual income (or roughly £18 million each) that the tax was paid on. Note the curious fact that the figures increased dramatically after a fall due to the 2008 crisis. Now, inflation will be playing a big part in all this, but it does suggest some are benefiting nicely from the crisis, thank you. Now, some might be footballers, not all will be capitalists qua capitalists (a few barristers and lawyers might sneak in there) but it shows that out of 60 million, much fewer than 1% are doing very well indeed.

More from Fred

For the principle of taxation is, after all, a purely communist one, since the right to levy taxes is derived in all countries from so-called national property. For either private property is sacrosanct, in which case there is no such thing as national property and the state has no right to levy taxes, or the state has this right, in which case private property is not sacrosanct, national property stands above private property, and the state is the true owner.

Got that? Taxes are communist. Wouldn't it be nice if this wee quote could go viral, see how long it takes before frothing Tories are telling us paying any taxes is a communist plot?

Same source as before.

The Socialist Programme against the cuts

I think this point needs to get across. the left are wetting their knickers over the increased top rate of tax.

Lets get down to socialist brass tacks on tax. The burden of taxation doesn't fall on wages/salaries. That is, when taxed, formally, wages/salaries adjust so that the loss, the pain, falls elsewhere, mainly on capitalist profits.

The real wage, the take home wage, the money in your pocket is, to borrow a Darwinian term, the unit of selection. It is take home pay that drives the market, it's rises and falls in real wages that prompt market behaviour. If a tax hike lowers real wages, then wages were due to fall anyway under prevailing market conditions, and tax has stepped in a taken the share that would have gone to the employer.

Ordinarily, however, market pressure, through individual informal and formal action (and preferably through collective union action) would act to restore the previous status quo.

What this means is that our "immediate" objective is to shore up our unions, they are the only hope of seeing this through - although when unemployment rises, they'll be shredded too. So we urgently need to organise a conscious and explicitly socialist movement, not for tax rises or capitalist bailouts or passing the burden back and forth, but clearly and resolutely set on the abolition of capitalism. This is the only practical self defence we have.

Really, seriously, get your mates, get anyone you've ever heard, meet together, debate, discuss. Form a socialist group. Form an international. Form a reading circle. Join the Socialist Party. Set up workers' councils. Whatever you do, raise the banner of "the abolition of the wages system" now, before its too late.

Jottings on a crisis...

OK, lets see.

In strict Marxian terms lowering taxes does not change the amount of consumption in the economy. the state is a non-productive consumer, and putting money into the hands of consumers doesn't change the magnitude of that part of the economy, just the shape and nature of the consumption being undertaken (home rather than office furnishing, for example). Cutting taxes, and borrowing simply means the office furnishing spending doesn't go down, but that money is being taken from profits and (more importantly) from capital accumulation:

So, to take uncle Charlie's reproduction schemas:

I. Production of Means of Production:
Capital. . . . . . . . . . . . . 4,000c + 1,000v = 5,000
Commodity-Product . . . 4,000c + 1 ,000v, + 1,000s = 6,000,

existing in means of production.

II. Production of Articles of Consumption:
Capital . . . . . . . . . . . 2,000c + 500v = 2,500
Commodity-Product . . 2,000c + 500v + 500s = 3,000,

existing in articles of consumption.

Recapitulation: Total annual commodity-product:
I. 4,000c + 1,000v + 1,000s = 6,000 means of production
II. 2,000c + 500v + 500s = 3,000 articles of consumption.

(Obviously, this is the simple reproduction schema, so it's assumed all surplus value is spent on means of consumption, we can stick with that, for now). Now, the point of this schema is that the total capital need to equal the value of the means of production, and the total wages+surplus value, the means of consumption.

Now, put those figures in a spread sheet, and try monkeying around with them. Say, move 1,000c from production to consumption. The total capital remains equal, but suddenly, the total means of production no longer equals the amount of capital available. This is a crisis of disproportion, much like the one we are suffering, as banks, housing and other means of consumption have outstripped production by a long chalk.

No amount of simply transferring between wages and surplus will affect this imbalance, the short way out is to destroy the capital (even though this will, bizarrely lead to an overall shrinkage). Indeed, this has been the traditional mechanism for capitalism, called bankruptcy. Of course, the owners of capital are unwilling to lose their capital, and so will try and pass the buck on. And it's difficult to alter one of these allocations without changing the ratios to the others (ratios which have real world constraints, you can't simply fling capital at a problem without adding labour)...

Raising the wages in means of production does offer another route to sort out the imbalance. Another way out is external resources, whilst bad debt clogs up the spokes, expanding the size of the economy can re-balance it...

I'll keep pondering, but I really don't think Darling's plan will work.

Many a mickel

OK, budget. Brown is very very clever. Riddle me this - he is inflicting pay cuts by holding wages down to less than inflation, but he gives a net tax cut to salaries/wages in thwe £17K-£43K bracket (according to you master Akehurst. This simultaeously will cut upward pressure on wages whilst also delivering a net benefit to the real size of the public purse. The cut makes brilliant politics because it is a headline cut in the nominal rate of tax, and so many people will benefit, slightly, that all talk of the overall increase in taxation will be swamped.

To my mind, Brown is and remains a highly ingenious Keynsian, with the political nouse to not say so. What we have in action is an incomes policy - IMNSHO.

54 Varieties

In the latest Tribune an article on tax distribution notes there are 54 billionaires in the UK. Between them they personally pay around £14.87 million tax. Their accumulated incomes are £126 billion - at the rates of tax thee and me pay, they should be paying £50 billion (enough to rebuild and extend the entuire council housing stock of the UK, for a start). instead they effective tax rate is 0.14%.

Add onto that that companies pay no corporation tax, and Huston, we have a problem.

Luckilly, I have a solution - increase the basic rate of income tax. Yes. The basic rate, on the rest of us, we should pay more taxes. For why?

Well, I'll tell you why - because in so doing we'd drive up wages - with a bit of concerted union effort - we'd push the burden of that tax onto our employers - ultimately, the pockets of the 54. We'd be individually responsible for our own share of that tax claw back, and so there'd be 20 million or so tax inspectors making damn sure the companies can't avoid this one.

Don't tax the rich - tax the poor, until the rich cry.