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Man was once free to apply his labour to the ecosystem of his planet, which in return yielded all his needs of life in great abundance. Modern capitalism has placed a barrier between man and his planet. It is the capitalist economy. This stands between man and his planet's ecosystem like a giant economic valve siphoning off the greater part of the fruit of his labour. It leaves the labourer with very little of what his labour yields.
In the United Kingdom in the late 1990s, the worker ends up with only 23% of the fruit of his own labour. The rest is siphoned off as corporate profit and confiscated by the state in the form of tax. The percentages vary from one national economy to another. Nevertheless, the ones shown are a reasonable representation of the norm. In any case, precise figures are not important. What matters is the fact that the labourer ends up with very little of the bounteous wealth his planet's biosphere yields in response to his effort.
Almost half of the fruit of his labour is siphoned off by his employer as corporate profit. The Elite Band of Men who own and control the resources of this planet effectively tax the dispossessed individual by keeping back a part of the wealth which results from his labour. This part which they keep back is called their profit. They then use this profit to fuel their business endeavours, their private needs and luxuries, and their political ends. The capitalist's profit is thus in effect a tax on the labourer's production. It is tax on his income - a form of income tax.
In order to finance the collective agenda of its capitalist paymasters, the government of a capitalist State also taxes the productive effort of the dispossessed labourer. This tax amounts to a further 14% on average which is confiscated by his employer on behalf of the state. It is termed 'direct tax' or 'tax on production', and is made up of two different kinds of tax, namely, Income Tax, and National Insurance
Both corporate profit and State income tax are a function of the wealth which the planet's ecosystem gives in response to the labour of the dispossessed individual. As the labourer toils, the Earth yields its wealth. As the Earth yields its wealth, his employer receives it and keeps part of it for profit, pays another part to the State as the labourer's income tax, and passes on to the labourer the little that remains.
If the labourer receives no income, then no corporate profit or State income tax is taken from him. Corporate profit and State income tax may be austere in their magnitudes, but they do not presume to take when nothing is received. But there are far more insidious forms of tax levied within the capitalist State which do take where nothing is received.
Every human being is a biological life-form. It must consume in order to sustain its life processes. It must consume not only food, but also whatever else is required to keep it clothed and sheltered and to meet its social and emotional needs. If it cannot consume, it will surely die. For it to live, these needs must be supplied.
Tax on consumption is levied on the assumption that every individual will always be in possession or receipt of sufficient means to acquire his needs. This assumes that the profit, income tax and social security mechanisms will always leave the individual with enough to pay for his needs plus the consumption tax levied upon them. However, since these diverse mechanisms operate independently, the way their uncoordinated actions will affect a particular individual cannot be predicted. This is therefore a very dangerous and irresponsible assumption for any government to make.
Notwithstanding, a further 14% on average is taken through what is termed 'indirect taxation' or 'tax on consumption'. In some parts of the world it is known as 'tax on sales' or 'sales tax'. This is charged on what he buys - his needs. Within the European Union, this is for the most part the universal value-added tax [VAT or TVA]. However, in the United Kingdom, other indirect taxes (such as fuel tax, car tax, excise duty) are levied on certain things before the VAT is calculated.
Somewhere buried invisibly among these percentages is a tax which is levied on the labourer's home. This has gone under various names from time to time such as 'rates', 'community charge' and 'council tax' according to the political expedience of the time. This is, in effect, a tax on one of the most fundamental human needs, namely, shelter.
In the UK this tax was formerly known as the rates. During the 1990s it was renamed (and in some obscure way supposedly changed). It is now known as council tax. But a rose by any other name smells just as sweet. It still requires the individual to pay money at an increasing rate every year for the privilege of having a house to live in. It is still house tax. There was a short period in the early 1990s when property tax was replaced by a poll tax. It was called community charge and was, in effect, a tax each adult in the country was required to pay for the privilege of being allowed to exist. This must have ranked as one of the most reprehensible forms of taxation every devised by the sick minds of capitalist politicians.
It is essentially unrelated to income. It is levied upon one's house irrespective of one's ability to pay it. To gain exemption, the onus is on the individual concerned to prove his inability to pay and his eligibility to what is currently termed 'council tax benefit'. But there is another form of 'house tax' which, though again unrelated to the householder's income, makes no provision for the poor through any form of relief, benefit or exemption. Furthermore, it is a tax levied on the people not by an elected government, nor even a government quango, but by profit-making commercial companies. It is the water rates.
The tax system is a labyrinth of confusing demands, rates, thresholds, exemptions and exceptions. It is an unsystematic agglomeration of endless additions and amendments. It is supposedly counterbalanced by an equally incomprehensible labyrinth of so-called benefits for all manner of different things which those in need are expected know how to claim.
The entire 'system' does not seem ever to have been designed. Each element appears to have been put in place piecemeal as the result of pressure from this or that lobby group in direct proportion to parliamentary awareness of the problem it was created to solve. The is confusing. And not just for the taxpayer and the tax collector. The creators of the 'system' itself also get confused by it. This is evinced by the many logical inconsistencies between taxes and benefits. For instance, try claiming Disability Carer Allowance when you are on Jobseeker's Allowance.
Such a confusing and unworkable system results in people becoming trapped between such logical incompatibilities, and thereby being forced dangerously close to starvation, to which my own tax figures bear stark witness.
The present mess could so easily be replaced by a simple tax interface between the individual and the state. I once inadvertently designed one. I was writing a payroll program for a client in the late 1970s. I had completed the system apart from the small module which was to compute the amounts of income tax and national insurance from each employee.
To test the system as it stood, I coded up a little dummy tax routine, which comprised the following steps.
It took about as many lines of code as there are steps listed above. Over the range of pay most working people received, the exponential function was linear to within a few pence. It only began to curve up steeply at fat cat salary levels. In my program I did not check whether the taxable pay were positive or negative. Consequently, when it was negative, my little tax routine subtracted negative tax from the employee's gross pay. This had the effect of automatically topping up a low paid worker's wage to his needs threshold.
In the context of my little dummy tax routine, a single tax replaced all other elements of personal tax (including National Insurance). The objective was to keep the tax interface between individual and state as simple as possible. Whenever the government saw fit to change the rate of tax to raise or lower its revenue, all it had to do was to adjust one single solitary constant in the exponential function. No more tax bands. No confusing hierarchy of percentages. No more truckloads of tax tables. No more tax routines over 2 kilobytes.
"But", exclaim the politicians and bureaucrats, "how could the idiot public ever possibly understand their tax if it were worked out according to an exponential function?" Very easily. The exponential function is the only perfectly fair way of computing tax. It allows no tax traps. It is also operating everywhere around us in nature. People see examples of it every day. It just needs explaining. And it would require far less explanation that is contained in the mountain of booklets and leaflets the government issues in its abortive attempt to explain the present tax system. As one eloquent mathematician put it:
"Any man who has ever pissed in a field
knows exactly what an exponential function is.
He just may not know what it's called."
The trouble is that those in power do not seem to want to rationalise the present mess. Perhaps they want to keep it as an effective smoke screen to prevent the masses from seeing the extent to which they are actually being taxed and how little they are getting back through 'benefits'.
All forms of taxation in the capitalist State share a common principle of default. When a rich man is taxed, the system tends to default in favour of the individual. When a poor man is taxed, the system tends to default in favour of the State. For example tax on bank account interest is automatically deducted on the assumption that the individual pays income tax at the standard rate. A poor man has to intervene in order to stop it being deducted. The burden of proof of his poverty is on him. With a rich man, the State must intervene in order to become permitted to take tax from his account at a higher than standard rate. The burden of proof that more tax is due is upon the State.
The only exception is perhaps a thing called inheritance tax - or whatever politically expedient name it currently goes under. But this is only significant during those very short spans of time when a truly socialist government gets into power.
The result is that the State takes tax from the poor which it should not, and does not receive tax from the rich on occasions when, according to its own law, it should. It thus makes comfort and well-being for the rich an assured reality, while the adequate level of subsistence which the rich assume it allows to the poor remains a precarious theory. The capitalist state sets its tax thresholds and rate bands always to force the middling majority to be the main contributors to State revenue. They are indoctrinated to blame the welfare paid to the poor and unemployed for their high taxes. They bow to the rich and powerful and revile the poor and weak. But that's what cowards always do.