Friday, December 8, 2017

Taxation




With the tax bill now up for reconciliation between the Houses of Congress, it is clear that the capitalist parties intend to give vast sums of money to the already wealthy. We must look at what a socialist tax program would look like, one that would serve to help create a society free from domination and exploitation. To this end, the Socialist Party USA makes five major points in our platform.

·         First, we call for a steeply graduated income tax, and a steeply graduated estate tax.

·         Second, we call for the restoration of the capital gains tax and luxury tax on a progressive, graduated scale.

·         Third, we oppose regressive taxes such as payroll tax, sales tax, and property taxes.

·         Fourth, we support tax benefits for renters equal to those for homeowners.

·         Fifth, we call for the elimination of subsidies and tax breaks that benefit corporations and all other forms of corporate welfare.

In the first three points we can see a recurring theme: that taxation would be progressive. Put simply, this means that tax rates would increase as incomes increase. Furthermore, income and estate taxes would be steeply graduated --  significantly higher for high incomes than for low incomes.

As socialists, we recognize that the source of all value is in the labor of the working class. By keeping wages lower than the value that labor creates, owners, landlords, billionaires and other members of the capitalist class extract their incomes. Progressive taxation on incomes, estates, capital gains and luxuries will be powerful tools to rectify this exploitation of the working class.

In addition, socialists recognize that sales taxes, payroll taxes and similar taxes are inherently regressive, in that these taxes place a greater burden on lower income households than on higher income households. For example, a family with the median Houston income of $47,000 must spend most of their income paying bills, buying household supplies and clothing, and paying for services. As a result, most of their income is subject to sales tax. In contrast, for a one-percent family with an income of $400,000, who spend perhaps $100,000 making sales purchases, only one quarter of their income is subject to sales tax. Thus, the burden of these taxes falls more heavily on low incomes.

Lower income families are also more likely to rent their housing, while higher income families are more likely to own their homes. Since housing tax benefits apply only to owned homes, these disproportionately accrue to higher income families. By ensuring that equal tax benefits are available to renters, we can ensure that all members of society benefit.

Finally, we socialists are opposed to all tax breaks and subsidies for corporations. By lowering the corporate tax rate, capitalists argue that these corporations would have more income to pass on to workers by increasing wages or by hiring more workers. This argument is the same trickle-down economics that the parties of capital have been preaching since Reagan and Thatcher. In the decades since, corporate profits have soared, top level incomes have increased enormously, and the stock market is at an all-time high. Yet median incomes have not increased and private debt has grown immensely. After all these decades, it should be clear that trickle down economics is nothing but a sugar-coated lie to excuse the massive accumulation of wealth by capitalists.


In the current economic system, workers toil to produce, while capitalists exploit them and produce nothing. Make no mistake, this is nothing less than warfare between the working class and the capitalist class. Class war is an inherent characteristic of capitalist economics, and will continue as long as capitalism exists. The tax bill in Congress is simply a continuation of a capitalist front in the this war. To create a more just society, we need a tax plan that supports the working class. 


---James Wheat

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