taxes

Justin Schwartz jkschw at hotmail.com
Thu Apr 12 09:19:15 PDT 2001


One supposes that with a strong socialist state, there would be a need for taxes to maintain its services. In Schweickart's model of market socialism, new investment is financed with an "assets tax," a sort of rent, on the value of assets used by the producer coops. In any system where there is no capital market, and investment is planned, therew ould have to be fairly serious taxation to raise investment capital. In addition, taxtion would be required to finance public goods like roads, schools, health care, and the like. Incomer taxtion is not the only way to go--in the USSR, btw, the income tax burden was very low.

Marx envisaged that in the higher phase of communism, the state would "wither away," and its functions be performed by other institutions. However, he had a specific meaning for "state," namely, a set of coercive instuitutions. I believe that any complex modern state would require law, thus (I think) coercive institutions that can enforce collective decisions. I think this would be especialy prominent in a planned economy, where allocative decisions were made authoritatively rather than by market mechanisms. Of course markets require contract and property law, tort law, etc.

In any case, the coercive aspect of the state is only one aspect of it; same with the coercive aspect of law. Lenin remarks on thsi when in State and REvolution he discusses the persistence of institutions such as the post office. Planning boards would also be state institutions. Many of these instutitions, and the law that enables them, are empowering rather than coercive. Contract law, for example, has a coercive aspect--a contract is a promise the law will enforce. But most contracts are never enforced by the state. Contract law, more importantly, is a body of rules that tells you how to make an enforceable promise. Likewise, many, perhaps most, state institutions make it possible to do things, mail letters, drive on roads, take trains, etc., rather than make you do things.

The usual explanation of why we have taxes under capitalism is so that the state can provide public goods that the market will not provide. In addition, taxes perform redistribution functions, both upwards and downwards. And they provide incentives and disintenctives for activities the government deems worthy or otherwise. Thus we provide tax relief supposedly to encourage investment and savings, and impose "sin" taxes on commodities like tobacco and alcohol that the government wishes to discourage but not outlaw. There are other functions as well.

--jks


>
>why is it that no one ever makes the argument that there is no need for
>taxes under marxism, at least not at current rates? on the model of
>anarcho-marxism, local control, and workplace democracy (say an improved
>parecon model) i can't see any reason why we need more than the barest
>bones of a national state and just the slightest amount of tweaking supply
>and demand to make sure that there were people doing the "dirty" work.
>
>
>so, i guess i'm asking, explain why we need taxes under capitalism? (taxes
>at any significant level), particularly given the premises marx seemed to
>be working with re human nature, the character of non-alienated labor, etc.
>
>kelley
>
>

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