(OPE-L) Re: taxation and public finance

["Gerald A. Levy" <Gerald_A_Levy@xxxxxxx>]

Hi again Ernesto.

 

Previously I asked:

 

> But, so long as capitalist relations of production prevail, what
> is the impact of a heavily progressive income tax on the accumulation
> of capital?

 

You replied:

 

> I do not precisely know. But I do not think it would dramatically

> impair it.

It might depend on just _how_ heavily progressive the income tax is. 

E.g. (supposing also that tax holidays, subsidies, and loopholes

for corporations and investors are also closed) , a _very_ heavy

income tax (e.g. an effective tax rate of 95% for the top 10%

income earners) would mean that there would be dramatically

less funds available for investment in c and v and hence there

would be de-accumulation of capital -- even though demand by

working-class families for consumption goods might well be

increasing.   *Of course*,  this couldn't happen without workers'

struggles *and* capital has some options (since after all there are

nation-states with sovereignty which develop their own tax and public

finance policies) including a "capital strike" and  re-locating where the

"investment climate" is better. And there are more ominous bourgeois

options as well, e.g. a coup d' etat and the re-emergence of fascism

as a means of  overcoming a state-imposed policy that violates the

best interests of the bourgeoisie.  To prevent this from happening, the

working-class might have to organize their own armed militias (recall

this week's news from Venezuela).  This suggests that if the tax is 

heavy enough then the class struggle would become (non-metaphorically)

an actual class _war_.  Such a circumstance might coincide with what

Lenin and Trotsky called "dual power" and probably wouldn't last too long

since one side or the other would succeed in forcibly imposing its will.

 

In solidarity, Jerry