> Lenin's tomb wrote
>
> "This isn't coming from today's federal budget. It is going to be paid for
> by increased taxation, mostly on the working class. They call it
> 'tightening your belt'."
>
> I don't know if I am appealing to a common language that we do not share,
> but in the Marxist tradition, it is not usual to take taxation seriously as
> a deduction from workers wages, but rather to see gross pay as a legal
> fiction, and take home pay as the reality.
I accept the underlying analysis as far as it goes, but this is a very static - perhaps hypostatized - way to address the issue. It misses the dimension of time, and of the things that can happen in a particular sequence (class struggle, for example). At the moment, one source of outrage against the New Labour government was the abolition of the ten pence tax rate for lower income earners. This took place at a time when wages claims were falling in real terms, not rising. Moreover, it was concurrent with a deliberate effort to suppress consumption through a de facto incomes policy imposed through the vector of the public sector.
If wages automatically rose to their true market value given a strengthening position for labour, then there would be no need for trade unions. Manifestly, that is not the case. Therefore the impact of taxation on wages depends to a large extent on the *ability* of the working class to transfer the cost to employers, as well as the desire and ability of employers to resist this. As an aggregate, longer term analysis of a *tendency* which may or may not be realised, it is fine to say that taxation on wages will eventually become taxation on profits. But it isn't good enough to foreclose all possibility of tax rises restricting consumption on that basis, and it isn't adequate for a political intervention either.