Editorial from the April 1990 issue of the Socialist Standard
As the time for the first payment of the Poll Tax in England and Wales approaches, the battle of words that has been going on for the last couple of years about the government's decision to impose this in place of the existing system of local rates is reaching a crescendo.
Though there are new features, this battle is a continuation of the century-long struggles by sections of the propertied class to pass the burden of rates and taxes on to some other sections. For instance, there was the campaign of the landowners to secure full or partial exemption from rates for agricultural land which went on throughout the 19th century. As local rates fell heavily on them they also pressed for some items of local expenditure to be transferred to central government. This is again being proposed today with one Tory MP for a rural constituency saying that the government could greatly reduce the amount of the Poll Tax and therefore its unpopularity by more such transfers (The Times, 17 January). Other group interests obtained reduced rates for industrial and transport companies and for offices and shops.
As the cost of central and local government has increased enormously (in relation to total production it is now more than five times what it was a hundred years ago) this struggle between sections of the propertied class has intensified. And, as the workers now have a clear majority of votes in local and parliamentary elections, so have the efforts to persuade them that their interests are involved in the question of rates and taxes.
We have always urged workers to resist such efforts. As we wrote in 1912: ‘‘Right through the history of taxation the spectacle has been seen of one section of the propertied class trying to shift the burden of taxation on to another section, and the question in many minds is . . . Can they shift it on to the working class?' We answer no! The working class does not own property. They exist alone by selling their energy (their power to labour) to the employing class the owners of the means of production" (Socialist Standard, March 1912).
The economist David Ricardo wrote in 1817 that “a tax on wages is wholly a tax on profits". Adam Smith had presented the argument earlier still, in his Wealth of Nations (1776). Smith showed that if, in given market conditions, an employer could only get the workers he needed by payment of £100 a week before a tax on wages was introduced, he would have to pay a wage sufficiently larger to leave £100 a week take-home pay after the tax was imposed.
The ability of workers to maintain or improve their standard of living does not depend on whether taxes or rates (or prices or interest rates, for that matter) are rising or falling. The standard of living of the working class depends on their ability to get employment, on the amount of their wages and salaries, and on the level of expenditures they have to meet.
Material improvements of the standard of living can be gained by effectively organised workers during periods when production, sales and profits are all rising, as has taken place in the last eight years where wages have steadily risen more than prices (this despite the continued protests of government ministers). When the next depression approaches and profits fall sharply, the resistance of employers to wage claims will strengthen and the recent rate of increase of wages will be halted.
Under the new system of local government finance introduced by the Tories to replace the rates nearly all individuals over 18 will have to pay a local poll tax at full or reduced rates, and business ratepayers will pay a standard business rate. How the working class will fare will depend as in the past on conditions in the labour market, and not on whether those opposed to the Poll Tax succeed in preventing it being implemented or in getting it repealed or replaced by some other local tax. What we said in 1912 is just as relevant today: ‘‘The working class, therefore, should not waste their time seeking lower rates and taxes. The question for them is How long shall the slavery and robbery of our class continue?"'