Taxes and the US Elite

Posted on 03/09/2011 by


In Part 2, I wrote about how taxation policy, and specifically no-tax policies, create the single most active and dedicated class of status quo supporters.

The question arises: why not have everyone taxed equally, to ensure equality? On paper it is a lovely conceit. In reality it has never happened. Someone always has enjoyed the privilege which arises from not being taxed. It’s a very agreeable concession to have, after all.

In my opinion, taxing everyone, whether equally, progressively, or regressively, is not an answer to this question. This is for the simple reason that taxing the poor does nothing except create and maintain an angry, and potentially restive, underclass.

On the other side, taxing the rich after they have enjoyed little-to-no taxation is a rather difficult sell. They are known to become restive themselves, and start revolutions of their own. As they enjoy a pecuniary advantage over the poor, the rich are able, at the extreme, to field armies. These armies might be armed with rifles or law books, but they are armies nonetheless.

An excellent example of what I’m writing about is the United States. There are valid questions as to whom the US Federal Government actually responds. Clearly it is not to the vast majority of the population, given how popular concepts (such as single-payer health insurance) are ignored, and unpopular concepts (such as war) are supported to the hilt.

The simple answers of “the rich” or “the super-rich” are very appropriate, but still misplaced accusations. This is for a very simple reason: they do, in fact, pay taxes. Only the most clever of the lot, such as Warren Buffett, are able to weasel their way out of most taxation.

There is only one class of persons in the United States which effectively are the zero-tax crowd. These are corporations. Not only do they as ‘corporate persons’ enjoy a no-tax policy, they additionally get money out of the government in the form of ‘tax rebates’. The payouts could perhaps best be considered somewhere between protection money and investment returns from the purchase of Members of Congress and the Executive, who in turn write the US tax code.

By the zero-tax analysis, we arrive at what the common knowledge is mostly aware: corporations have hijacked the United States government. They have leveraged their market power over decades toward the purpose of purchasing the US government lock, stock, and two smoking barrels. This has been facilitated by a complicit and disinterested US population, who by and large contented themselves with consumption and the latest celebrity gossip.

From this perspective, as an aside, the ruling by the Federal Supreme Court that corporations are persons is not the first shot of a new battle, but simply the final victory in a long and cheerfully ignored war. Corporations have one, living human beings have lost; the game is already over.

The first battle was long ago: corporations struggled for, and gained, the zero-tax concession. This was over and done with long before any of the present difficulties with corporations arose. Considering the zero-tax concession is firmly entrenched, so too is corporate control of the United States government.

There is little to be done to break this control, other than economic actions which take into account corporations need for stable income growth. Boycotts are my personal favourite. That aside, the corporate control of the US government is effectively entrenched: they are the privileged zero-tax class.

Read part 4 here.

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Posted in: Distributism, Reform