Taxation Stakeholders

Posted on 26/08/2011 by

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Continuing from Part 1.

The biggest stakeholders and supporters of any particular political are not difficult to find, although it is somewhat counter-intuitive. Instead of following the money, as the old phrase goes, one must find whence money – specifically taxation money – does not come.

It’s an obvious but unstated truism that the biggest supporters of the status quo are those who pay little-to-no money in its maintenance, and enjoy all the benefits thereof. This probably will elicit a “well duh, Andrew” upon reading, but permit me the indulgence of continuing in this vein.

Psychologically, this makes sense. When presented with a great many benefits without the need to pay for them, it is a rare individual who refuses said benefits. Once the stability of the benefits is established – as in, they won’t suddenly go away, presumably guaranteed by law – the individual is acclimated to the pleasures of their arrangement. They are unlikely to let these benefits go without a powerful struggle.

Given this, it should be obvious that the privilege of not paying any, or at least any meaningful, taxes will create a very firm consensus that this circumstance continue into the future. To this end, I would like to create an axiom:

Those who pay little or no taxes are the most savvy, economically invested, and socially involved with the political process. In essence, the zero-tax crowd are the ones for whom the political system operates. These are the real voters.

This, I think, shows the true power of taxation policy. It simultaneously forms, supports, and points to the class of people who are the source of legitimacy for the extant government. The importance of this class cannot be overestimated, because those who are so empowered by taxation policy hold enormous power over the direction of the country in question.

As a quick point of clarification, the jobless or grey-market-employed poor do not pay any income taxes. However, they are by no means part of the zero-tax crowd. People at such a low level of economic subsistence are the hardest hit by consumption taxes, such as those on food, clothing, housing, petrol, alcohol, tobacco, et cetera. These taxes are punitive at this income level, making the poor the most aggressively taxed relative to their income.

Read part 3 here.

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Posted in: Distributism, Reform