[GegenStandpunkt Index]
[Contents]
[Introduction]
[1]
[2]
[3]
[4]
[5]
6
[7]
[8]
[9]
[10]
The Democratic State
Critique of Bourgeois Sovereignty
Chapter 6
Taxation
In order to be able to perform its tasks for its citizens, the state
demands taxes from them. All citizens must give up part of
their resources to finance the state functionaries, the enforcement of the
law, the support of property and the promotion of wage labor. By obligating
all citizens equally to pay taxes the state makes one part of them
pay for the security of their property, and the other for the insecurity of
their existence. As a condition for the capitalist mode of
production, the state limits the wealth of private competitors. By
depriving each class of part of its revenue it is only fulfilling its holy
duty. The state means extra expenses for capitalist production, serving both
to augment property and to ensure the reproduction of the working class
responsible for this augmentation. It monopolizes part of the resources of
society for the sake of private property, and therefore collects these
resources in a way that corresponds to their purpose.
a) The state must raise enough revenue…
The state has the power of taxation, which means that paying taxes is no
exchange deal. Taxes are “money payments which are not a quid pro quo for
any particular services” (German Tax Code, Art. 1), and the state
collects them by force. Everyone is obligated to file a
tax return and there is an extensive
apparatus for tax investigation.
The first important thing for the state when it comes to its tax laws is
that it get its money. It must make its share of the wealth of society big
enough to be able to perform its tasks. Since the democratic state follows the
principle of equality here, too, it takes from each citizen a part of his
income. This meets with little enthusiasm particularly among those
whose only ‘possession’ is the income necessary for their consumption, so the
state has adopted a special way of collecting income tax. It withholds it at
the source. By progressive, instead of merely proportionate, taxation of
income the state exploits the substantial differences in income among its
citizens, showing how much money some people can spare. It also levies other
taxes on earned and unearned income. The incomes of “legal persons”
(corporations) are subject to a tax on profit, and the part of property not
immediately involving consumption is taxed in accordance with its size,
notably the tax on capital gains and the general property tax.
With its taxes on transactions the state participates directly in its
citizens’ augmentation of wealth, which is the purpose of all their commercial
transactions. The value-added tax shows what businessmen do when the state
diminishes their profits. They include all their taxes in their calculations
as costs, incorporating them into the price. They shift them, thereby
giving part of the taxes they pay the same effect as the
sales tax has, to burden the incomes of those who buy the end products.
However, property taxes and taxes on transactions can only be shifted onto
prices as far as the consumptive power of society allows, these limits being
found out in competition. Tax legislation thus proves to be a means for giving
new impulses to class struggle. While commercial and industrial companies
shift their taxes by some additional efforts in cost-accounting and
observation of the market, wage workers can combat this reduction of their
incomes by increased prices only by militant action.
b) However, taxation must not foil the state’s efforts…
…to preserve property and wage labor. The state distributes the tax
burdens in such a way that
they do not destroy firms in a weak competitive position
(tax privileges for special development
areas, tax-free allowances, far-reaching tax exemption for agriculture, and so
on);
they do not directly endanger the reproduction of the working class
(tax-free allowances, deduction for income-related expenses, homestead saving
subsidies, old-age relief, etc.);
they do not hinder charitable organizations, which are set up in the
form of business enterprises, in their efforts to compensate for the necessary
pauperism.
Protective measures of this kind are the main reason for
tax reforms, which are accompanied by public
debates about whether this or that tax amendment is equitable. Politicians
also take part in these debates in order to burnish their decisions with the
sheen of justice.
c) Historical remarks
Bourgeois class society needs a state which finances itself by
permanently limiting this society, which it exists to serve (overhead
expenses). Since the accumulation of property cannot be had without a state
economically equipped to perform its functions, the state had to build up its
economic capacity under conditions in which capital and wage labor were not
yet fully developed. It did so by collecting taxes which secured the state
its continued existence and at the same time acted towards
separating labor and capital. Although the
pre-capitalist state depended on trade and on the possession of wealth in its
abstract form, i.e. money, it ruled a society in which economic relations were
not devoted to the purpose of creating surplus value. Taxation of peasants was
a part of primitive accumulation, which was supplemented by the transformation
of state property into private property (see Chapter Seven). The state did
this for its own sake, because it needed soldiers, etc., not because it knew
that capitalism had to come about. It preserved itself, and had to change!
d) Ideologies
In tax reform debates democrats show their materialistic side. Whereas
they are usually quick to transform their advantage into moral
support of the state, they have no inhibitions about
grumbling about the state when it wants them to prove their civic
loyalty by opening their wallets. The state makes it clear that its
performance is directly linked to privations on the part of citizens. That
is, they must not only show good democratic conduct but also make economic
sacrifices. Citizens respond by measuring the state by the rules of economic
life. Everybody considers his taxes the price for services the government
performs for him. The state promotes this view by explaining the fairness of
taxation with reference to its good deeds whenever it goes collecting. At
times it even goes so far as to levy taxes earmarked for special purposes from
those who “profit” from their use (road traffic), while everyone
discovers that he has made a bad deal, i.e. paid too much.
In this critique of the state’s economic behavior citizens retain their false
consciousness, dictated by the cost-benefit calculation of those who compete,
and become radical on the basis of this consciousness. The
“radical bourgeois,” whose home Marx made out to be the realm of tax
disputes, is someone who does not want to change anything but only to increase
his advantage under unchanged conditions. That is why the general disapproval
of tax legislation does not lead to a revolution, but is merely the basis for
all kinds of fraudulent tricks. Everyone
cheats the state on his taxes if he can, without the least moral scruples. In
fact, it is considered normal business practice to wriggle out of paying
taxes, and this even provides a whole profession with a handsome livelihood.
The only problem is that most people cannot make use of tax consultants, and
illicit work only makes sense, if at all, in addition to a regular job (with
the tax already deducted from the paycheck) because of the insurance swindle
it involves. The state is aware of its citizens’ stratagems and reacts with
snoops, auditors, and a tax penalty
legislation which forgives a lot. Fascists and revisionists
share a concern for proper collection of taxes, and demand special fiscal
treatment for parasites, especially “anonymous stock corporations”
and Jews.
[GegenStandpunkt Index]
[Contents]
[Introduction]
[1]
[2]
[3]
[4]
[5]
6
[7]
[8]
[9]
[10]
© GegenStandpunkt 1993