Why the call for tax justice is a mistake Ruthless Criticism

Why the call for tax justice is a mistake

A recipe against poverty: finance jobs!

[Translated from broadcast by GegenStandpunkt Marburg December 20 2006]

In November, Dr. Johannes Becker – a teacher of political science at the Center for Conflict Research at the University of Marburg – editorialized on the subject of tax fairness. Under the headline “Germany: not bankrupt, but a self-service store for the rich,” he argues that the tax returns of the rich should be assessed more accurately. The resulting tax revenues, wrote Dr. Becker, should be spent not on economic development and the rich, but on social issues. And for Dr. Becker – completely in the mainstream – this means jobs.

The slogan “The rich get richer, the poor get poorer” is now quite popular. This statement is not, however, the prelude to an explanation of poverty and wealth, specifying exactly how a market economy leads to this result. This saying is typically not an objection against the absurd sort of wealth production that is based on poverty and regularly results in its increasing numbers.

The standpoint of social justice takes exception not to poverty itself, but to the extent of poverty: The rich become richer, the poor much poorer. In particular, these critics hold the increasing forms of “rich” and “poor” to be criticizable. One wants to ask them what proportion between rich and poor would then agree with their social conscience. Their message is simple: it does not need to be how it is.

Our thesis is that this is the message of Dr. Becker’s comment. First, a slightly longer quote from this commentary:

Every independent audit (of the income of millionaires) last year showed 135,000 euros in additional revenue for the public sector. For the approximately 21,000 millionaires estimated in the whole of Germany that would be 2.8 billion euros, a considerable sum that could be directly transferred to an employment program for labor – and could be redirected into jobs for unemployed youths. In addition, unemployment could be reduced by a few thousand newly trained tax revenue officers ... On the other hand, more than three million German households are heavily indebted ... Approximately 13% of the population live under the poverty line.

Anyone who makes this argument is already far away from the question why there is ever misery and hardship. He advertises for a subsequent repair of the matter: when there is poverty, it should be remedied by tax money. And he sees in the capitalist wealth produced – through a state tax equitably distributed as a kind of permanent relief organization – the possibility of action against poverty. This confidence is merited neither by the production of capitalist wealth nor the state:

First, it is well known to everyone that the tax state takes and does not give. The state itself acknowledges that it makes its citizens poorer. By establishing a basic tax exemption amount of 7,664 euros per year, it defines a minimum subsistence level. And from every euro that is earned above that, the state takes money. And only if one is a long way below this level, thus when it becomes a question of pure survival, is there any financial assistance; and after the reforms in the welfare state this is connected with all kinds of harassment.

And one should be looking here at the idea of the tax state as a helper in time of need?

Second, the government treats all its citizens as equals and clips from everybody too. However, this does not accommodate all parties equally, and it is not supposed to: the income of the “dependent employees” from their private as well as state employers is already tight. And the state taxes these incomes directly at the source. And so it makes those who have to live like this even poorer. With the wealthy and with private capital, on the contrary, taxes are taken from the periodic accrual of wealth. They come from profits and interest. And the state holds back in reducing them. In doing so, it does not commit an error or assault its own principles. No – as a tax state completely self-interested in its accounting, it spares private capital and its profits so that it grows and grows and it can better help itself to this growth.

But this is still not enough. Not only in the collection but especially the use of taxes, one comes up against the state as the producer of poverty. Thirdly, because it grants private property power over the entire production of wealth and needs a lot of money for the establishment and maintenance of a legal system which implements and guarantees these principles with the help of a judiciary and police.

And fourthly, the state uses plenty of taxes to promote the steady growth of its economy. And capital does what it should do according to the will of the state: it pursues its growth by treating wage income as a cost and constantly lowering it through “optimizing” productivity. It has permission to produce a lot of poor workers – the so-called working poor. It further relieves itself from any unnecessary cost through rationalization, layoffs, reduced work hours and insolvency and it is relieved of social contributions for the laid off unemployed, the sick and so on. Or else right from the start capital avoids any expense through non-employment, like with the unemployed youth Becker spoke of.

And why all this? Growth will make the state richer – and precisely to the extent that this profit production is successful. The resulting poverty inevitably connected with it is state produced as necessary collateral damage and put under its supervision.

Considered this way, Becker’s idea – if the state would have enough revenue, it could at least alleviate poverty—is totally absurd. Besides: if it is about the eradication of poverty, why does Becker want to allow this mode of production to exist, which only creates poverty? Why does he want to renovate the state into a self-service shop for the poor? Of all things the state, which establishes with its force this capitalistic mode of production for itself – its power – with the well-known results!