Taxes! Another Way to Rip Us Off

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Socialist Action's In our capitalist society, virtually all goods are produced for exchange in the market and not for immediate use by the producer. In fact, most goods are produced by workers working together co-operatively in enterprises owned by capitalists. The percentage of goods produced by independent producers, like artisans and working farmers, is small compared to those produced capitalistically.

In last month's issue, we discussed how the value of goods produced for the market, called exchange value, is equal to the average amount of human labor time spent in their production. The exchange value of goods produced capitalistically, therefore, is created by the workers. Since taxes, whether actually paid for by the workers or the capitalists, come out of this pool of value created by the workers, the workers really "pay" all the taxes.

How do the capitalists get their hands on the lion's share of the value the workers produce?

First, we should note that the workers-either individually or collectively-never sell to the capitalist owners of industry the products of their labor. If they did, the workers would get back in money the full value of what they produced, and the capitalists would get nothing. The workers do not sell the products they make because they never own them-they never are theirs' to sell. The capitalists own those products.

So it is the capitalists who sell the products "their" workers have made, and who therefore pocket the full value of those products even though the workers have created all of that value.

But the workers do sell the capitalists something, in exchange for which the capitalists pay the workers' wages. This "something" the workers sell to the capitalists is their ability to work. The value of this "ability to work" is the value of all the commodities necessary to keep this ability intact and reproduce itself-the food, shelter, clothing, etc. necessary for maintaining the average worker and her or his family. This "ability to work" is called "labor power."

In other words, the capitalist class doesn't pay you for the work you do-if they did they would have to pay you for the full value of the products you made. They pay for you yourself.

The capitalist class doesn't buy all of you-if they did, you would be a slave. But they do buy your labor power for a definite time, say eight hours a day, and during that time your ability to work is theirs because they paid for it. They put you to work to create products which are also theirs, and which they sell to realize the full value of what you have produced. You are not a slave, but a wage slave.

So two different exchanges in the market are involved. In one, the capitalist buys your ability to work, or labor power. In the second, the capitalist sells the product of your work-equal in value to the labor you put into it.

The difference between the value of the product of your work, which the capitalist gets, and the value of your ability to work, which you get, is the "surplus value" the capitalist gets to keep. In terms of money, surplus value is called profit.

Now back to taxes. Taxes are help get our monies collected to run the government. By government, we mean more than a particular regime, but the whole apparatus of the army, police, judicial system, prisons, bureaucracy, etc., which we call the state. At bottom, the state is a system of organized force and violence.

Funds for the state Under capitalism, the state is a capitalist state, organized to preserve the capitalist system under the laws designed to do that. It is controlled by the capitalists through their political parties—like the Democrats and Republicans-in capitalist democracies, or in other ways, such as military dictatorships or fascism.

The capitalist state also defends the interests of the capitalists in each capitalist country against the capitalists of other countries and against colonial and socialist revolutions. This is the source of modern war.

Running the capitalist state is a necessity for the capitalists. Therefore taxes are a necessary expense for the capitalists as a class, and are paid from their mass of surplus value.

So now we see that the capitalists pay all the taxes out of the surplus value they pocket! But didn't we first conclude that the workers really pay all the taxes? The conundrum is answered when we recall that surplus value was created by the workers. The capitalists pay the taxes to run their government out of the pool of surplus value they own, which is part of the total exchange value the workers created.

But what about the taxes we workers pay out of our own pockets?

The situation was clearer 50 fact paid little or no tax.

Today we are forced to pay taxes. But these taxes are part of the total tax that goes to running the capitalist state. So even the taxes that come out of our own pockets are part of the capitalist class's expenses for running their state, and as such are part of surplus value and are not part of our real wages.

Most workers instinctively know this. When we get our paychecks, we don't look first at what is called our "gross" wage over there on the pay stub side you can't cash, but at our "take-home" wage with the taxes deducted on the business side of the check.

Taxes that we pay later, like sales and property taxes, should also be deducted to arrive at our "real" wages, but their form makes it harder for us to see that.

Who pays the taxes?

The reason the capitalists "pay" us a little more and then turn around to have us pay taxes, instead of directly paying these taxes themselves, is political. It is designed to make us identify with their state and to feel we are co-responsible for maintaining it.

If they can convince us, for example, that "we" need to spend billions on arms, we workers might agree to what amounts to a pay cut and a lower standard of living through increased taxes.

What about monies spent by governments on needed social services like education, firefighting, social security, unemployment payments, etc.? These things are "ours" (some go to the capitalists, too, of course) and are part of the "social wage" paid to us by the capitalist class as a whole out of surplus value.

Let's take the example of social security taxes. When they are deducted from your paycheck, that is a lowering of your wage. When you retire and receive your social security check, that is part of the social wage paid out to the workers as a whole. But the amount taken out of your paychecks for a lifetime may very well not be the amount you get back, especially when inflation is taken into account.

You can't count what is called the "social security" tax as yours because it isn't—it's theirs. Count as yours only the checks you receive.

Readers who wish to go more deeply into the process of capitalist exploitation and the creation of surplus value can refer to the pamphlets "Wage as well as the first chapters of Marx's "Capital."

(To be continued)

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years or so ago, when workers Learning About Marxism By Sheppara

Labor and Capital" and "Value, Price and Profit" by Karl Marx,