TradeMarx | How Much Tax is ‘Enough’ Tax?

A common scuffle between marxists and liberals comes on the issue of tax. Is it enough to tax billionaires 70%, 80%, 90%? To the liberals even these high levels of taxation appear unbearable, even though the USA saw its highest levels of growth in the post-war period due to high taxation. Is higher taxes really what the marxists want?

No, progressive taxation and higher taxation is in fact a compromise for marxists. For them, the reorganization of economic — and hence social — life from a socialist point of view is needed. This means that all proceeds from production should go to the government for the people and by the people. In other words, 100% taxation.

To this, the argument often comes back that it is unfair to the entrepreneurs. And here one should note that belying the argument for 100% taxation is not ethics but economics.

According to the labour theory of value, value of a commodity comes from raw materials and labour. When people act on raw materials using tools and machinery, they transform them into commodities worth more than the raw materials themselves (and depreciation done to machinery). Then it is the labourers who are in essence creating value in any economy.

This is why it should be labourers to whom the product belongs. It is they who imbue commodities with value and hence it is them who should decide what is done with the proceeds of sales. These proceeds in socialistic countries have gone towards healthcare, education and other measures for the welfare of the people. This is where marxists and liberals differ on taxation.