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flexibeastA common position put forward by progressives is that governments should fund community services - particularly for the less privileged - through taxation; and more specifically through increased taxation of big business / corporations.
This position makes sense to me as "transitional demand" - i.e. a demand which seems not unreasonable, but which the capitalist state won't implement without considerable sustained pressure, hence showing the need for the capitalist state to be replaced by a "worker's state". Transitional demands aren't put forward with the expectation that they will actually be met. They're put forward as a pointer to what is felt is the actual solution.
On the other hand, i don't see how it makes sense as a demand which people actually expect to be implemented. It's hardly a secret that major corporations often don't even pay current nominal corporate tax rates; the US media1 recently reported that GE paid no US taxes last year on its $14b profit. This is surprising if one subscribes to the liberal view of the state as a neutral institution which merely seeks to adjudicate between various competing interests in society. If, however, the state is regarded as an instrument via which plutocrats and corporations attempt to externalise their costs to the rest of society, the ability of major corporations to pay little or no tax is not surprising at all.
Assuming this is true, the expectation that community services will get funded in practice through taxation of corporates is pie-in-the-sky at best. Passing legislation to 'force' major corporations to pay more tax is the theoretical solution to this problem; but if corporates have the resources to find loopholes in current legislation, one can expect they'll find loopholes in any putative new legislation such that they'll continue to minimise their tax bill. And that's assuming that such legislation would get passed in the first place - not necessarily likely, given the often-cosy relationship between legislators and "captains of industry" (cf. the "revolving door" between legislatures and corporate boards).
Still, if we demand the government fund community services, the money has to come from somewhere. One solution involves increasing taxes on the middle and lower classes2, who often don't have the resources to permit them to substantially avoid such taxes; instead, they can only be somewhat reduced at best. And although the middle classes in particular may technically be able to afford/absorb such an increase, it will certainly not go unnoticed. Consequently, the middle classes, with their relative privilege, put pressure on governments to give them tax breaks; et voilá, we have mutual resentment between the middle classes feeling like they have to support the poor, and the poor who feel the middle classes are trying to wriggle out of their social obligations. Meanwhile, corporates and plutocrats continue to externalise their costs onto the rest of us.
So, again assuming all this is true - what can be done? i'm not sure. i do think that progressives could spend less time talking about increasing taxes and more time criticising existing government spending which doesn't directly benefit the middle and lower classes - spending on dodgy military hardware, for example. We could also be demanding an end to extrafinancial support for major corporations - an end to draconian so-called "intellectual property" laws, for example, which often transfer money up the wealth pyramid. In the longer term, as a voluntaryist mutualist, i advocate building civil alternatives to the corporate (or bourgeois, if you like) state. In the meantime, though, i feel we still need to consider alternative approaches to "statist-politics-as-usual".
Addendum, 2011.04.07
moominmuppet has noted this article about effective corporate tax rates; according to the article, 2/3 of US corporations pay no taxes in a given year.
Addendum, 2012.12.16
How Everyone Else Pays for Big Business's Tax Breaks
1. Though not NBC, owned by GE.
2. i acknowledge these aren't necessarily well-defined concepts; and i admit to being more partial to Marxist definitions of class. Having said that, i feel they're probably sufficiently well-defined for this context.
This position makes sense to me as "transitional demand" - i.e. a demand which seems not unreasonable, but which the capitalist state won't implement without considerable sustained pressure, hence showing the need for the capitalist state to be replaced by a "worker's state". Transitional demands aren't put forward with the expectation that they will actually be met. They're put forward as a pointer to what is felt is the actual solution.
On the other hand, i don't see how it makes sense as a demand which people actually expect to be implemented. It's hardly a secret that major corporations often don't even pay current nominal corporate tax rates; the US media1 recently reported that GE paid no US taxes last year on its $14b profit. This is surprising if one subscribes to the liberal view of the state as a neutral institution which merely seeks to adjudicate between various competing interests in society. If, however, the state is regarded as an instrument via which plutocrats and corporations attempt to externalise their costs to the rest of society, the ability of major corporations to pay little or no tax is not surprising at all.
Assuming this is true, the expectation that community services will get funded in practice through taxation of corporates is pie-in-the-sky at best. Passing legislation to 'force' major corporations to pay more tax is the theoretical solution to this problem; but if corporates have the resources to find loopholes in current legislation, one can expect they'll find loopholes in any putative new legislation such that they'll continue to minimise their tax bill. And that's assuming that such legislation would get passed in the first place - not necessarily likely, given the often-cosy relationship between legislators and "captains of industry" (cf. the "revolving door" between legislatures and corporate boards).
Still, if we demand the government fund community services, the money has to come from somewhere. One solution involves increasing taxes on the middle and lower classes2, who often don't have the resources to permit them to substantially avoid such taxes; instead, they can only be somewhat reduced at best. And although the middle classes in particular may technically be able to afford/absorb such an increase, it will certainly not go unnoticed. Consequently, the middle classes, with their relative privilege, put pressure on governments to give them tax breaks; et voilá, we have mutual resentment between the middle classes feeling like they have to support the poor, and the poor who feel the middle classes are trying to wriggle out of their social obligations. Meanwhile, corporates and plutocrats continue to externalise their costs onto the rest of us.
So, again assuming all this is true - what can be done? i'm not sure. i do think that progressives could spend less time talking about increasing taxes and more time criticising existing government spending which doesn't directly benefit the middle and lower classes - spending on dodgy military hardware, for example. We could also be demanding an end to extrafinancial support for major corporations - an end to draconian so-called "intellectual property" laws, for example, which often transfer money up the wealth pyramid. In the longer term, as a voluntaryist mutualist, i advocate building civil alternatives to the corporate (or bourgeois, if you like) state. In the meantime, though, i feel we still need to consider alternative approaches to "statist-politics-as-usual".
Addendum, 2011.04.07
moominmuppet has noted this article about effective corporate tax rates; according to the article, 2/3 of US corporations pay no taxes in a given year.Addendum, 2012.12.16
How Everyone Else Pays for Big Business's Tax Breaks
1. Though not NBC, owned by GE.
2. i acknowledge these aren't necessarily well-defined concepts; and i admit to being more partial to Marxist definitions of class. Having said that, i feel they're probably sufficiently well-defined for this context.
