Re: (OPE-L) Re: taxation and public finance

From: Ernesto Screpanti (screpanti@UNISI.IT)
Date: Wed May 19 2004 - 08:07:27 EDT

At 07.17 19/05/2004 -0400, you wrote:
>Hi again Ernesto.
>Previously I asked:
> > But, so long as capitalist relations of production prevail, what
> > is the impact of a heavily progressive income tax on the accumulation
> > of capital?
>You replied:
> > I do not precisely know. But I do not think it would dramatically
> > impair it.
>It might depend on just _how_ heavily progressive the income tax is.
>E.g. (supposing also that tax holidays, subsidies, and loopholes
>for corporations and investors are also closed) , a _very_ heavy
>income tax (e.g. an effective tax rate of 95% for the top 10%
>income earners) would mean that there would be dramatically
>less funds available for investment in c and v and hence there
>would be de-accumulation of capital -- even though demand by
>working-class families for consumption goods might well be

Yes I agree. By the way, this theory recalls Laffer's curve. But a tax rate 
of 95% seems quite irrealistic.

>*Of course*,  this couldn't happen without workers'
>struggles *and* capital has some options (since after all there are
>nation-states with sovereignty which develop their own tax and public
>finance policies) including a "capital strike" and  re-locating where the
>"investment climate" is better. And there are more ominous bourgeois
>options as well, e.g. a coup d' etat and the re-emergence of fascism
>as a means of  overcoming a state-imposed policy that violates the
>best interests of the bourgeoisie.  To prevent this from happening, the
>working-class might have to organize their own armed militias (recall
>this week's news from Venezuela).  This suggests that if the tax is
>heavy enough then the class struggle would become (non-metaphorically)
>an actual class _war_.  Such a circumstance might coincide with what
>Lenin and Trotsky called "dual power" and probably wouldn't last too long
>since one side or the other would succeed in forcibly imposing its will.

This is a possibility. A revolution triggered by Laffer's curve is an 
interesting Idea. But I think it is difficult to realize. At least in 
modern capitalist systems capital strikes an coups d'état are unnecessary. 
A Maastricht Treaty, a Stability Pact and mediocracy are much more efficient.

>In solidarity,


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