It is often said, by those who wish to protect the very
wealthy, that it is not fair to raise their taxes because, “Why should we
punish success?” The more appropriate question in my mind is why should we
reward their success, when you consider the nature of that “success?”
Let us say, at least for the sake of the argument, that for
any given polity, whether it be a county, state, or nation, there is a finite
amount of resources available to the members of that polity. That is, there is
only so much timber, so many minerals, so much tillable land, so many rivers,
lakes, or so much seashore, so many fish and animals, and so on. There is
likewise only so much available labor. These various resources can be converted
into “capital,” and similarly into “profit.” The only way someone can profit is
by the exploitation of the natural resources, including labor. As Marx so
insightfully observed, capital represents dead labor (labor that has been used
up, exploited).
If success is measured by the amount of capital someone
possesses it ought to be fair to consider the source of that capital, namely
the exploitation of resources that belong to the polity, including labor. Members
of the polity have to be taxed to provide the services and the superstructure
necessary for the polity to continue to function. Your taxes, then, should be
based on how much capital you have accrued in a given amount of time through
your labor or exploitation of resources. Thus, if you are taxed on the capital
you have gained, one would expect that those who have gained the most capital
should pay the most in taxes, as what they gained has been at the expense of
the resources held by the entire polity (basically the community).
Obviously this is a gross oversimplification if you live in
a system where some individuals “own” more of the available resources than
others, where both land labor are regarded as a commodities, and even money,
too, is also considered a commodity. But as Karl Polanyi pointed out, land,
labor, and money are really false commodities, land being the environment,
labor being human behavior, and money an artificial creation. I would argue
this should not absolve anyone from having to pay a fair amount of the
community taxes. It’s fair enough (if you want it to be) that some people own
more land than others, or can command more labor, or happen to have more
resources on the land they own, but they are still using more of the available
resources than others and should not be rewarded for it. To say they should
have to pay more in taxes is punishing success is simply not the case unless
they are actually being taxed at a higher rate than everyone else. Paying a
fair share is not a form of either reward or punishment.
I realize this probably sounds somewhat nonsensical,
especially in the context of the tax basis in the United States. We, of course,
do not pay taxes on the basis of how many resources we exploit. We pay taxes,
or do not pay taxes, depending upon all sorts of complicated formulae having to
do with precisely how you made your capital, whether your worked for it or
simply inherited it and have it invested, how many homes you own, and where,
whether it is used for business rather than pleasure, whether your pleasure is
also considered business, what can be amortized, what is considered taxable
income and what is not, where your money is located in the world, and so on and
on in the most complicated manner imaginable. Probably the only people who pay
taxes directly on how much capital they have garnered in a year are ordinary
working people who pay taxes on their salaries (and cars, food, services, and
etc.).
Curiously, it doesn’t really matter whether you live in a
capitalistic society or not, because in any case those who exploit the
environment and labor the most are using more resources than others but are not
usually being taxed at the same level as those who use less. Those who exploit
the most are doubly blessed because not only do they benefit from the basic
exploitation involved, they also benefit from paying fewer taxes, and in some
cases no taxes at all.
In all communities there are finite resources although the
precise enumeration of them may be impossible. There are also some individuals
who by dint of harder work or more talent, or perhaps even inheritance, manage
to use more of the community resources than others. In reality this is
understandable, and in principle may even be fair, but only if they are
required to pay for their “success” at the same rate as others. This does not
mean you are taking from the rich to give to the poor, it means everyone is
paying their fair share of what they gain from exploiting the available
resources. I suppose one could argue that those who exploit the most should
actually pay even higher taxes because their exploitation diminishes the
opportunities for others.
Obviously this is all too complicated for me. I guess this
is why I liked living with the “primitives” in the New Guinea Highlands. The “Big
Men” (men with a “name”) exploited their multiple wives and their surroundings,
it is true, but what they achieved was basically prestige, and what they gained
materially was inevitably shared with the community. Give me the simple life!
The best political
community is formed by citizens of the middle class.
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