Wojtek wrote: And one more thing. Right now, 50% of SS tax is paid by employers. If they include it in the general budget, it will get the employers off the hook, no?
J.] No, those taxes are really just passed on to employees as reductions in wages. So if SS were moved to the general budget, we could expect wages to increase as a result (provided there is enough bargaining power to recapture the withheld wages). There is no downside and much upside to eliminating the payroll tax. It is a tax specifically on labor, and a regressive one at that, i.e., high earners pay less of it than low earners as a percentage of their earned income. No government program has to pay for itself, and there is no reason why we should impose this voluntary constraint.
***********
I of course agre with J, whose argument is _implicitly_ historical but not, I think, explicit in its understanding. W's argument is an almost classic instance of what, in a post submitted yesterday morning, I termed the "Legislative Mentality." I quote from that post:
******* Since, _within_ a given social order a radical change in just one 'area' of the social order _can_ have such an effect. One feature of the "Reformist" mind set is r4latedd: Their inability to conceive the fact that certain events simply will not happen except under radically changed conditions. They therefore view such hypothetical changes as occurring with all other conditions unchanged. One might call this the Legislative Mentality: The change is viewed as though offered to or adopted by the current Congress. This they correctly see as (a) impossible and (b) bringing chaos were it adopted. They cannot, even in fancy, conceive of the social chaos, the riots, the huge marches & demonstrations, the wrenching changes in daily life which are/would be a precondition for the change at issue. Nor can they see that it would be those transformations in daily life, the changed social relations within which daily experience therefore occurs, will have brought about what amounts to a change in "Human Nature." This occurred in the U.S. between 1945 and 1965. Had Congress in 1945 passed the Civil Rights Act of 1964, the result would have been social paroxysms unknown since the Civil War. (The school segregation decision was such a "legislative change, & it has not, really¸ been implemented even yet.) The "Dustup" debate, featuring Miles & Julio, of several years ago showed Julio utterly unable to think outside the constraints on the "Legislative Mentality," leading to his fantasy of social and/or 'ideological' change through "Persuasion" or "Argument."
But by 1965 human nature had (temporarily) changed in the U.S. *****
And here is the relvant passage from _Wages, Price and Profit_:
****** These few hints will suffice to show that the very development of modern industry must progressively turn the scale in favour of the capitalist against the working man, and that consequently the general tendency of capitalistic production is not to raise, but to sink the average standard of wages, or to push the value of labour more or less to its minimum limit. Such being the tendency of things in this system, is this saying that the working class ought to renounce their resistance against the encroachments of capital, and abandon their attempts at making the best of the occasional chances for their temporary improvement? If they did, they would be degraded to one level mass of broken wretches past salvation. I think I have shown that their struggles for the standard of wages are incidents inseparable from the whole wages system, that in 99 cases out of 100 their efforts at raising wages are only efforts at maintaining the given value of labour, and that the necessity of debating their price with the capitalist is inherent to their condition of having to sell themselves as commodities. By cowardly giving way in their everyday conflict with capital, they would certainly disqualify themselves for the initiating of any larger movement.*****
Now J. in effect is is proposing the adoption of the original Townsend Plan, a government pension paid for by a tax on corporate profits. That plan would have resulted in a significant increase in the wage share in the U.S., the reverse of what has been occurring since the early '70s. But its adoption now belongs in the realm of pure fantasy, just as the Voting Rights Act of 1965 would have been pure fantasy in 1945 or 1955. The failure, to this day, to implement in any real sense the Supreme Court's school decision is one of the few actual examples of the a mismatch between legislative ukase and actual social conditions. Only in the U.S. can a Court play the role of a legislature.
W's argument presupposes the implementation of a Townsend Plan within contemporary social relations - a fantasy. Congress would only pass, and the President only sign, such legislation within a social context unimaginable at this time. Similarly, the crescendo of protest and repression which would be a precondition for a Hungarian-style Revolution in the U.S. are unimaginable at the present time. We only _know_ that demonstrations which provoke the refusal of troops to fire on the demonstrators also cannot be conceptualized at this time, and therefore those who want a "scenario" for revolution are indulging in anahistorical fantasy fanatasy.
The only conditions, then, under which a Townsend Plan might be adopted are conditions in which working-class strength would be such as to guaranty that the Corporate Tax would NOT be passed on to the workers _either_ in the form of reduction of wages or in increase of prices. But as Marx pointed out in the text quoted above, barring such working-class strength passing on can and probably will occur. Thus J.'s proposition, "There is no downside and much upside to eliminating the payroll tax," is only conditionally true - and in fact is erroneous at the present time, since the move _towards_ a "Townsend" plan, as other posters have pointed out, does not come by itself but in a package that incorporates a damaging reform of current pension policy. The net result, then, of this _improvement_ is a further development in the 40-year capitalist attack on the wage share.
Carrol
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