The burden of taxation
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Trade union action isn't the only means by which the value of wages would be restored: staff churn, go slows, sick outs, malingering, etc., e.g. action at an individual level would follow. Unions only speed this process up.I think the class angle is 'It's the bosses state, they've paid for it.' It's not ours.
You mean like it was said to be in the last years of the old USSR: you pretend to pay us, so we pretend to work.
ALB wrote:You mean like it was said to be in the last years of the old USSR: you pretend to pay us, so we pretend to work.Exactly, or, more precisely, work would drop to the restore the ratio of salary to output. And, of course, a host of other unofficial and individual (and occaisionally collective) forms of retaliation.
Are we now going to be presented with an opportunity to check out our theory in practice? When Scottish workers tax rises, will their wages rise too?http://www.bbc.com/news/uk-scotland-scotland-politics-42339146
alanjjohnstone wrote:Are we now going to be presented with an opportunity to check out our theory in practice? When Scottish workers tax rises, will their wages rise too?http://www.bbc.com/news/uk-scotland-scotland-politics-42339146It does not occur automatically, certain conditions must be met. Our article 'The myth of taxation explains it in the following way:Of course, this will not happen automatically but as a result of an economic tendency for the working class to receive the value of its labour power. When there are tax reductions this will be a major factor in stiffening the attitude of the employers. With tax increases, this stiffens the pressure of the workers for higher wages, especially when unemployment is low. It should be noted that this tendency for workers to receive the value of their labour power is helped by trade union action.The concept of how tax increases lead to increased nominal wages that cut into profits was rather better understood in the past than it is now. Here, for instance, is what the capitalist and British MP David Ricardo wrote in 1817:"Taxes on wages will raise wages, and therefore will diminish the rate of the profits of stock… a tax on wages is wholly a tax on profits; a tax on necessaries is partly a tax on profits and partly a tax on rich consumers. The ultimate effects which will result from such taxes, then, are precisely the same as those which result from a direct tax on profits." (The Principles of Political Economy and Taxation, p140)The view that taxes are a burden on the capitalists and not the workers was also put by Marx:"If all taxes which bear on the working class were abolished root and branch, the necessary consequence would be the reduction of wages by the whole amount of taxes which goes into them. Either the employers' profit would rise as a direct consequence by the same quantity, or else no more than an alteration in the form of tax-collecting would have Our argument is that although some taxes are paid by the working class, the burden of taxation rests on the capitalists and has to be paid out of the profit accruing to them in the form of rent, interest and profit, the basis of which is the unpaid labour." Criticism and Critical Morality (Marx and Engels Collected Works—Volume 6.)
alanjjohnstone wrote:Are we now going to be presented with an opportunity to check out our theory in practice? When Scottish workers tax rises, will their wages rise too?http://www.bbc.com/news/uk-scotland-scotland-politics-42339146I've seen it in action: Gordon Brown raised workers NI, and my next pay rise turned out to be greater than the increase + inflation.That said, sadly, the theory is deductive, and immune to empirical refutation, since the argument goes, if workers wages do fall as a result of the tax rise, their wages were due to fall anyway, and the state has simply seized that which would have gone to the employer.Arguably, much like trade union bargaining, taxation could well speed up such processes compared to the organic operations of the market.
Real wages are going down at the moment, so any effect could take the form of wages not going down so much. In any event, we're (supposed to be) talking about the long — and in the long run a lot of individual workers get a salary increment. Difficult to disentangle the effects and counter-effects but trade union pressure is likely to be the most decisive.
We seem to have jumped the gun here as while some will have more deducted from their take-home pay others will have less, so more of a "redistribution of poverty" budget:http://www.bbc.co.uk/news/uk-scotland-scotland-politics-42358522
This should actually be a good test of the theory: higher wages suggest tighter wage markets, so we should see a skewing of labour costs at the top end of the market, with little change at the bottom end, as gains from tax custs are eroded by lower wage growth/inflation : unless state power is used to push up the minimum wage altogether.
If the workers are the taxpayers, why the US is going to borrow one trillion dollars after their huge tax cut in the rich? https://www.washingtonpost.com/news/wonk/wp/2018/02/03/the-u-s-government-is-set-to-borrow-nearly-1-trillion-this-year/?utm_term=.0597eeafaf38
I agree with the basic premise that tax is a labour cost that falls on employers and that increases in taxation rates lead to increased wages. I know this is likely to be generally true because I have employed people and I know that if tax goes up, the effect is to motivate the employees to press for pay rises. A point to consider is that not all employers are capitalists. I think small and micro business owners have very different interests to larger employers. The former might bitterly oppose measures such as a statutory minimum wage and higher taxes that have the effect of increasing labour costs, whereas larger employers might welcome and even lobby for such measures because of the burdens they impose on smaller competitors.It also occurs to me that a statutory minimum wage, when imposed generally, is a way for governments to 'privatise' social security costs by transferring these to employers. What I mean by this is that when wages are generally below their labour value for large sectors of the working class, employers will happily subsidise these employees via the state (as Marx explained in one of the quotes above), but when workers are able to organise at the trade union and political level for wages that equal or exceed their labour value, then the mode of subsidy shifts back to the employer through wages. The burden is always with the employer, but it is paid in different ways. However, it's not completely that straight-forward due to the distorting effect that observance of a statutory minimum wage has and the way that tax works practically. Probably a small/micro business owner will prefer to pay low wages because that also means a lower deductible tax burden in the pay roll, and possibly the avoidance of tax altogether. I reject what I see as the canard that a statutory minimum wage is a pro-working class measure. The minimum wage is actually a 'class war' of sorts between the bourgeoisie and the self-employed petit bourgeois professional and tradesman.
Ike Pettigrew wrote:A point to consider is that not all employers are capitalists. I think small and micro business owners have very different interests to larger employers. The former might bitterly oppose measures such as a statutory minimum wage and higher taxes that have the effect of increasing labour costs, whereas larger employers might welcome and even lobby for such measures because of the burdens they impose on smaller competitors.Yes, I agree.. The standard SPGB definition of a capitalist as someone who posseses sufficient capital to live upon without the need to sell his/her labour is essentially a sound one in my opinion but it does mean that the division between the classes in a Marxian sense is not a sharp one – more a case of one class shading into the other. The majority of workers are clearly workers and the majority of capitalits are clearly capitalists but there is a grey area in between where you cannot say definitively that someone is a capitalist or not. But that does not matter that much. All sociological analysis is based on abstraction , generalisation and inevitably a degree of simplification. No sociological model can ever hope to capture within its net the totality of social existence. For example what consititutes sufficient capital to live upon without the need to labour? Some capitalists might well be content with a very modest standard of living; others not. Would the former then be truly considered capitalists? All we can do is imvoke some kind of social average of what constitutes an adequate standard of living from that point of view. No theory is perfect It is the left who tend to lose sight of the wood for the trees when they go on about the petit burgeosie and the self employed as not being part of the working class. This is an extension of the ruling class strategy of divide and rule, In the extreme case where a workerist definition of the working class is invoked ,depicting the working class as nothing more than the cloth-capped blue-collared industral proletariat and all the rest as tthe so called "middle class", this effectively makes workers a small minority of the population. If that were truly the case, then the prospect of a working class or proletrian revolution must be considered to be non existent. Such is the reactionary role that leftwing sociological analysis tends to play in buttressing capitalism, By whittling down the working class to a small residual category through the application of overly narrow criteria it presents a picture of a class numerically in no position at all to mount any kind of revolution
Does or analysis remain sound in regards proposals to increase the taxation on OAPs?The cross-party Intergenerational Commission chairman David Willetts, said, “Pensioners are less likely to be poor than families of working age so it is only reasonable that when you look at healthcare provision that you look at a fair contribution from older people.”Pensioners should be taxed more, suggests the research and policy organisation, the Resolution Foundation says.How can pensioners influence the price of their labour-power to counter any tax increase and ensure the burden is placed on employers?
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