The tax system - an instrument of capital

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Workers' Fight workplace bulletin editorials
7 September 2010

Six million people may have paid too much or too little income tax on PAYE, over the past two years - or so we are told by a media report.

We are also told that this is due to a new computer system which discovered mistakes made by the old manual system. Ironically, though, this same computer system is already accused by tax experts of having produced a large number of erroneous tax codes - but never mind!

The wealthy scroungers are ok!

Apparently, those mostly affected by the additional tax will be workers who have changed jobs several times in the last 2 years - meaning, in particular, those of us who have been made redundant and/or been forced into casual jobs by the bosses' crisis!

But the wealthy don't have to worry. The richer they are, the easier it is for them to cut a deal with tax officials.

Hasn't Tory Blair managed to pile up millions since leaving office, advising oil companies on how to rip off the poor countries and making speeches and writing books glorifying his dirty wars in Iraq and Afghanistan? His activity may be totally useless for society - in fact, he is merely abusing his past position in government - and he may get a few shoes thrown at him as a result. But the tax system does not prevent him from buying 8 homes in the poshest areas of the country!

Of course, Blair's masters, the capitalists, are the main beneficiaries of this rip off. Out of every pound of wealth produced by workers in Britain, 22p materialises as company profits, although their shareholders represent less than 0.5% of the population. But the share of the government's tax revenue paid by companies is much smaller: only 8p out of every pound!

Why? Because of the legal rebates and more-or-less-legal loopholes created by one government after the other, to placate the bosses. Combining outright tax fraud, semi-legal evasion and abuse of legal "loopholes", this is now estimated to cost the Treasury £120 billion a year!

But unlike in the case of what Cameron dares to call "benefit fraud" (which only amounts to £1bn/year according to the government's own figures) Osborne has no plans to turn the screw on the real scroungers - the capitalists themselves! Quite the opposite, in fact. Over 30,000 jobs have already gone under Labour among those in charge of enforcing the tax system and Osborne wants to cut even more!

Making them pay for their crisis

By contrast to this leniency towards the rich, the working class is subjected to a triple tax whammy.

First, unlike the capitalists who create nothing, we, workers, create all the value that is produced in society. Our labour is the biggest tax we pay to society, contributing to the well-being of all.

Second, on the wages we earn, which are supposed to allow us to make a living, but don't really, we have to pay income tax to the Treasury.

Third, on most of the things we buy with our inadequate wages, we have to pay yet more tax (VAT and duties) to the government of the bosses!

Unlike the capitalists, there are no loopholes for us. We have to work to make a living, no matter the wages. The PAYE system ensures that our taxes are taken out of our wages (but the bosses often delay paying the Treasury). And when we go shopping, we can't refuse to pay VAT.

This is how the gap between the tiny capitalist minority and the overwhelming working class majority has increased so dramatically over the recent decades, with the top 10% of all households now owning half of the total wealth in Britain!

The crisis has not changed anything with regard to this scandal, far from it. While our wages and jobs were being cut, shareholders were getting fat on the largesse of Labour and now Con-Dem governments - at our expense as tax payers. So much so, that the four largest banks quadrupled their profits over the previous year, to a total £18 billion! Meanwhile the cash reserves of British companies have almost reached pre-crisis levels - proof that when the bosses cut jobs or wages, it is not for lack of cash, but simply to boost their balance-sheets.

This is the context in which the Con-Dem government dares to threaten massive cuts against working people, under the pretext of filling the budget "black hole" left by the bailout of capitalist speculation.

Well, the working class had no part in this insane game and there is no reason for us to pay for it. Let the greedy gamblers pay for their rotten roulette and let the tax system be used, under workers' control, to ensure that they do - and not for anything else!