Cooking the Books 1 – No such thing as a workers’ budget
‘What would be a workers’ Budget?’ the Trotskyist Workers’ Liberty asked on Budget Day. With graffiti on a wall saying ‘Tax the Rich’ as an illustration, the article expounded:
‘A workers’ budget would tax the rich heavily’. ‘A workers’ budget would rebuild public services and restore real wages and benefits’. ‘Increase corporation tax’. ‘No easing of the rules can square the circle and win the resources needed to rebuild public services and real wages without taking from the millionaires’.
Taxing the rich to increase wages and benefits and provide better public services is fantasy politics. It’s not going to happen and, if it was tried, would precipitate a massive economic crisis.
The article cites a calculation that ‘a wealth tax, increased capital gains tax, and a few other items could raise £50 billion a year’, but that’s only 6.25 percent of the £800 billion currently spent on health, education, and pensions and other benefits. So the bulk of the money ‘to rebuild public services and real wages’ would have to come from taxing profits. The article mentions doubling corporation tax to over 50 percent of profits (but even that wouldn’t raise enough). This would reduce both the incentive and the amount for private corporations to re-invest in maintaining and expanding production. Hence, the reduction in production and a massive increase in unemployment.
The slogan ‘Tax the Rich’ assumes the continued existence of the rich, the continued division of society into the rich and the rest, into a class which owns the means of production and lives off an unearned property income (profit, interest or rent) and a class which, excluded from such ownership, depends on working for an employer for a wage or salary.
The assumption is that the rich should continue to exploit the workers but that part (most) of their income should be taxed away to pay for higher wages and better public services for the rest. It is the fantasy of capitalism being made to serve the interests of the non-capitalist majority.
The absurdity, let alone the infeasibility, of such a social arrangement — the capitalist as capitalist for the benefit of the working class — is obvious.
Some naive leftwingers might believe in this but we doubt if the leaders of Trotskyist groups do. For them, proposals for a ‘workers’ budget’ will be an application of the cynical tactic of proposing something to attract worker support but which they know won’t work, in the expectation that, when it doesn’t, the disillusioned workers who fell for it will turn to them for leadership in an assault on the capitalist state.
Real socialists are honest. We say that under capitalism there can be no such thing as a ‘workers’ budget’ as this implies that capitalism could be made to operate in the interest of the majority class of wage and salary workers and their dependants. But experience has repeatedly shown that it can’t. The only budget that there can be is a capitalists’ budget.
What the Chancellor of the Exchequer, Rachel Reeves, set out on 30 October was what the British capitalist state plans to spend in the next tax year (which in the UK, for some odd historical reason, starts in April) and how it intends to pay for it.
The various measures she announced were based on the supposition that the government can bring about growth. But it can’t. The most it can do is to create conditions that could encourage business investment. This in fact is what all budgets have to try to do and why they must all be capitalists’ budgets. There can be no such thing as a workers’ budget.