Income Tax and the Over-40s
- This topic has 7 replies, 3 voices, and was last updated 5 years, 11 months ago by
.
-
Posts
-
I’m well acquainted with the Party’ analysis that taxation is a burden upon the capitalist class.
However, this overview may not make invalid that some taxes are indeed a burden upon the working class.
In every likelihood, this proposed extra tax on the over-40s is aimed at lightening the burden of the capitalist class and placing it directly upon the backs of over-40s.
That would be another reason for more skilled, experienced people to leave the workforce, take early retirement or go into lower paid work. What a stupid plan.
I would have thought that what applies here, rather than just our analysis that in the end taxation is a burden on the capitalist class, is our analysis of the ‘welfare state’ as a ‘redistribution of poverty’. Just as the PAYE tax system and family allowances together redistribute income from single people and couples without children to those with children so this proposed measure would be redistributing income from the over-40s to the over-70s. In other words, a redistribution of income within the wage and salary working class.
I’ve not wrapped my head around the idea of taxation being a burden to capitalist class? If they own the means of production and pay wages, how is clawing back some of that money (already allocated as wages) to spend on infrastructure and keeping the workforce healthy a burden? Surely having my wages reduced is a burden on the working class, not the capitalist?
So robbing one portion of the working class to pay for another, practically makes no difference to capitalists and in reality encourages those with the increased burden to find ways to avoid it?
Or am I missing something huge here?
Yes, sort of. The general theory is that employers have to pay workers enough to enable them to recreate and maintain their particular working skills. This reflects the cost of living as the cost of what workers need to buy to do this. If this is high as a result of taxes on what workers need to consume then wages will have to be higher too. If there is a direct tax on wages like income tax then, here too, employers will have to pay higher money wages as, if they didn’t, workers would not have enough money to spend on recreating and maintaining their working skills and so wouldn’t be able to work so well.
In other workers, in effect, taxes on what workers consume or on their wages get passed on to the employers. So, while workers may pay taxes, in the end taxation is a burden on the propertied classes (capitalists and landowners).
The position becomes complicated when there is an increase in a tax. Obviously, in the first instance, workers have to pay this and suffer a reduction in the amount of money they have to live on, but the increased taxes will exert an upward pressure on wages just through the operation of the law of supply and demand. Fortunately, this can be speeded up by trade union action. If the government takes steps to prevent this, pressure will built up over time and eventually there will be a wages explosion as in France in May-June 1968.
Also, the amount that workers need to recreate and maintain their working skills is not a rigid fixed amount. Apart from changing over time as new items of consumption come into being, it can vary up or down within a certain margin. Which is once again something that can be influenced by the struggle between workers and employers, i.e. it is determined by the balance of class forces in the context of the state of the labour market.
So initially tax increase is a burden to the working class, but then this ends up with increased costs to the capitalist either through higher wages (less profit) or reduced consumption (less profit), right?
Yes but the initial reduced consumption of workers would effect the profits only of capitalists investing in the production of goods that workers buy.
So going back to the original suggested tax, apart from increasing the misery for one section of the working class, of what use is it to the capitalist class?
- You must be logged in to reply to this topic.