25 July 2012

About the Poor and Taxes

I see a push coming from the fortunate again, the ones who have been rewarded by the system as it has been, to 'scrap the tax system' and go to a lower flat tax, or even better, a much lower but general consumption tax. Whatever benefits them the most. And economics is a handmaiden flexible and malleable enough to provide them whatever rationale is required to support their arguments.

But the truth is that a consumption tax falls particularly hard on those with the least disposable income, who must still buy the necessities of life.

A flat tax is not much better, for much the same reason. The burden falls disproportionately on those who can bear it the least.

I should add that a shift from an income to a consumption tax is a great idea if you would like to stimulate and subsidize a new bubble in speculative financial paper that would bring down the financial system once and for all when it collapses.

Personally I would like to see a very nominal financial transaction tax of nominal flat of about $5 per trade, with NO exemptions including wiseguys trading for their own books in HFT. I would obviously like to dampen speculation and encourage real investment. And of course I would be in favor of the abolition of all 'dark pools' of publicly traded instruments or delays in reporting those trades. And charging for basic quotes in real time by the exchanges which should be a cost of their doing business. But that is a subject for another day.

The problem with the tax system we have today is that there are so many loopholes and ways to avoid taxes for those with the most power and money. It really is more of a scandal than you might know. It encourages and rewards expoitative behaviour and foments financial corruption.

Until you have some serious walking around money, and it draws in the lawyers and accountants, one does not see what a racket the current system is, and how well it serves those 'in the know,' to the disadvantage of everyone else.

Rather than put forward my own solution, I would like to address a current tagline that is being quoted by the 'tax reformers.'

The fortunate are indignant that the working poor, and the poor themselves, are paying so little in income taxes on the whole. And this is true, if one measures it by actual federal income tax receipts alone.

It is less so if one considers all the other taxes that add up, like sales taxes and gasoline taxes, and fees.

But even further, I contend that the poor are being taxed to death, by a rotten, corrupt crony capitalist economic system.

The tax may not be levied by the IRS, but it is set down by the system itself. It is set down by the banks that cheat them, by the powerful corporations that use the law for their own excessive profits to exploit them.

They are taxed by those who exploit and cheat them and collect their unjust rents, not because they are smart and hard working, but because they can.  They have carefully positioned themselves to do so.

The poor are taxed by sickness, and a healthcare system with insanely different classes of treatment and payments, and extractive and the predatory practices of pharma-healthcare trusts.

They are taxed by the accidents and tragedies of life, that if one is rich or comes from privilege are not a lasting problem, but if one is not, there is no second chance. One is held in debt bondage, forever.

And when it comes to it, it is the poor who predominantly offer their tears and blood, and their own children, to fight the wars for this nation around the world. And when those wars are not entered into reluctantly for the sake of defense, but rather as expansive adventures in nation building in far off places, for the benefit of the hellish combine of the manufacture of death for profits, that is the gravest injustice and most horrific tax of all.

The corporations, in one form or another, own the housing, pay the wages, charge what they will for the food and medicine, and essentially own the company store in a pernicious monopoly whose sole goal is to sustain and maximize itself as its own end.

The system is so unfair and so rigged now that the poor will pay the price of it, the taxes of its corruption and injustice, from the moment they are born until the day that they die.

We have presided over the destruction of almost one hundred years of social progress, almost without parallel in human history. Oh, well done.

That for the most part is the reason why they are poor. Not because they are lazy, not because they are stupid, and not because they engage in high risk behaviours. Yes, some people are poor for these reasons. I know we can always think of someone like that. But just as many of the rich do the same things and more, and remain rich despite it. The system carries and subsidizes their failures, again and again.

The indignation of the well-to-do is like a group of highwaymen, who rob the passengers on a bus, and strip and beat them senseless, and then become angry when the survivors try to go on their way, but do not have enough money left to pay the region's exit tax.

The crony capitalist system is rigged, and it exploits the poor, and that is what makes most of them poor, and keeps their children the same way unless they are both incredibly bright and incredibly lucky.  A few may make it, but most do not.  And sometimes those who make it are among the worst, because they wish to forget who they are and where they have been.

And such a system is not sustainable, without increasing repression and force, until it finally extinguishes itself.

Changing the tax system is not the answer. The real answer is genuine economic reform and real justice, and an end to the principles of the serving the greater greed and might makes right that has shaped the perverse economic system which we have today.

I dare not even bring up the parable of the talents here, that what you have has been given you, and you are obligated to use it well, or it will be taken from you.

And how can I appeal to the principles which have guided many of the progressive gains throughout western history. "When someone has been given much, much will be required in return; and when someone has been entrusted with much, even more will be required."

How can one appeal to noblesse oblige, when nobility and chivalry are dead, and craven grasping by the crudely nouveau riche is the highest example for all?  

One can only appeal to the practical wisdom of the parasites, that when you kill the host, you kill yourself. Or risk being targeted and removed like some intrusive and unproductive organism that you may be.

The fortunate will not admit their humanity, because it lowers them from their exalted and imagined ubermensch status to what they really are: ordinary people with more in common with the poor than they care to think. And that is what frightens them.  The stench of their own mortality drives them obsessively.

That is the lesson which we have forgotten.  Yes, you do not wish to hear it.   But it is the oldest story in the book. It is the sin that brought down the light-bearer, the Son of the Morning, first among angels. Pride. And so we cannot admit it, we cannot even see it in our own blindness to the fact:

There but for the grace of God go I.

Do not feel envious, or fearful, or even angry at the parade of the powerful now, the pampered princes of corruption.  I had a terrible vision, a vivid dream, of what they will look like in the time that comes.  Their souls are so empty, so shallow, so broken and insubstantial, that when stripped of their earthly husks there will not be enough of them left to be recognizable as a personality.  

They look like the remnants of dried brown leaves, blowing along the gutters and alleyways of a hard and unyielding hell.   No one remembers them, or even know what they are.

They still think and feel, but the sounds and cries that they make blend together into an indistinguishable rustling, a chorus of soft scratching from dried remnants on the pavement, made of unyielding alabaster paving blocks, as they cling to their lies and self-delusions.  

And no one hears them, their dry scratching cries, and they are alone.   It is hard to even think of it again, much less imagine falling into that state.  And yet, that is not the worst that I saw.