Re: (OPE-L) Re: taxation and public finance

[Ernesto Screpanti <screpanti@xxxxxxxx>]

At 07.17 19/05/2004 -0400, you wrote:
> 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.  

Yes I agree. By the way, this theory recalls Laffer's curve. But a tax
rate of 95% seems quite irrealistic.


> *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.

This is a possibility. A revolution triggered by Laffer's curve is an interesting Idea. But I think it is difficult to realize. At least in modern capitalist systems capital strikes an coups d'état are unnecessary. A Maastricht Treaty, a Stability Pact and mediocracy are much more efficient.


>  
> In solidarity, 

Ernesto