Taxes As Theft

The supply of money during any limited period, such as a few decades, is finite. Therefore, wealth can only come from upward redistribution, which automatically creates difficulties for those at the low end of the income scale.

Those who strive for wealth by honest means deserve to be adequately rewarded for their initiative and hard work. That means everyone from the common laborer to the wealthiest businessman. The lesson of communism shows us clearly that a bleak economy results without this motivation. Cuba has great equality but everyone is poor.

But it’s also true that great wealth in non-communist economies controls the political discourse, and results in shifting ever more wealth to the already wealthy in a self-reinforcing loop that is very difficult to reverse and has extreme ill effects on the least wealthy. (See here.) The recent Supreme Court ruling removes all vestiges of fairness in election financing, which will greatly exaggerate this effect.

Some of the wealthy argue that all taxes are theft. This is an asinine argument. We learn in grade school that taxes pay for what we all use. Didn’t any of those guys go to grade school? There isn’t a rich person in the world who became wealthy without using the infrastructure and services we all paid for with our taxes.

Some of the wealthy argue
that all taxes are theft.
This is an asinine argument.

They also argue that taxes are a disincentive to create jobs, which they claim only they can do. But that claim sounds pretty hollow today. Post-2008, virtually all the wealth has gone to the richest of the richest, whose wealth grew at record rates immediately after the Wall Street crash. But job creation has been very much inadequate, and concentrated in jobs that pay meager wages without benefits. The Job Creators don’t actually create jobs anyway, unless you count the ill-paid jobs making stuff in poverty-stricken Third World countries for us to buy cheap. Jobs are created when everyone has enough money to buy stuff.

Given these facts, it seems obvious that the only fair income tax is progressive. The only questions are how steep the curve should be, and what should be taxed. History suggests that the point at which progressive income taxation becomes a disincentive is quite high. Even when the highest tax rate was above 80%, the national economic health was strong and many people were rich. The top rate of taxation, therefore, does not seem to be the primary element that determines either fairness or economic fitness. I submit that the slope of progression that preserves economic health at the lowest income levels is the only reasonable one. I also suggest that a generous Living Wage law would accomplish much of what is needed.

But the true injustice comes not from inadequate taxation on income, but from a total failure to tax wealth. The rich pay little tax on income, and virtually none on wealth.

The rich are never crushed
by their “crushing taxes”.

The rich complain loudly about crushing taxes, believing that they actually earned all their wealth all by themselves. But they are never crushed. They get progressively richer, because the greatest part of their income is not taxed, and because great wealth increases almost automatically.

It is the poor who are crushed, not by taxes, but by inadequate pay. Minimum wage incomes that hold them forever in poverty and result in ever decreasing fortunes and vanishing opportunity, for themselves and future generations. Even minimally adequate income requires several jobs in a family, and results in high-stress living that is always one false step away from destitution. This is completely inexcusable in the richest country in history.

The single thing that would change this most is Living Wage. Every person who works full time at any job whatsoever should earn enough to provide basics for himself and his family, including health care and retirement savings. This is not luxury. Living Wage provides essentials only, but a family surviving on living wage is not destitute, and the two greatest worries, health care and old age, are relieved.

It is the poor who are crushed,
by inadequate pay.

Conservatives blame the poor when they can’t earn enough money, but the fact is, their troubles come from lousy pay and lack of opportunity, both of which are closely tied to the super-wealth at the other end of the spectrum. Not from a racial inferiority that conservatives claim, of a large population of ghetto African-Americans who simply refuse to work, yet expect to luxuriate forever on undeserved welfare checks.

No such population of lazy moochers exists. What does exist is a great body of poor people of all races and cultures in all parts of the country eager to work and to improve their lot. It is lack of opportunity and nothing else that prevents these good citizens from working.

Conservatives are so worried that someone will get something he doesn’t deserve that they have built a series of hoops the poor must jump through to stave off disaster with ever-diminishing government help. Medical help for the uninsured to treat serious problems has required the ill to literally bankrupt themselves and their families before the government will help at all. This ruins all opportunity for that entire family for at least one additional generation.

Sasha Abramsky (The American Way of Poverty) cited one man who had to shutter his business after the crash of 2008. He was ready to try again a couple years later, but had a new health problem. In order to address the health problem he would have to sell everything he owned, after which he would be unable to open his business again. That’s called Catch-22.

Conservatives worry that someone
will get something undeserved,
so they create odious and insulting hoops
for the poor to jump through.

As a country, as a culture, the US fails to adequately value the social contribution of the ordinary worker. There is no work that is not valuable. This point is most easily demonstrated in hospitals, where common cleaning and sanitizing is absolutely crucial to proper treatment of patients and prevention of hospital infections. Every worker is important, not just in hospitals, but everywhere.

Obviously, taxes are not theft, as some reality-challenged rich people argue, and the low taxes on the rich do nothing to moderate their steadily increasing wealth. Obviously, it is the poor who need a break, not the rich.


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  1. Reblogged this on Citizens, not serfs.


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