Taxes and Labour
Firstly, i refer to your correspondence columns in the Oct. 1976 and Dec. 1976 issues of the Socialist Standard. It was said in one of your replies that wages are what workers actually receive (net pay) and that taxes are paid by the employing class.
Notwithstanding the incontrovertibility of this assertion, I suggest that the rate of the impost on income is, caeteris paribus, of more interest to the worker than to the capitalist in the short term. If, for example, gross wages remain the same, while the rate of tax falls, then the total outlay of the capitalist remains the same (net pay plus taxation equalling the same gross pay as before the alteration of the impost rate) whilst the net pay of the workers increases at the expense of the tax paid; the reverse being the case if the rate of tax rises.
In the long term, however, an accretion to or a deduction from net wages as a result of a variation in the tax levels has repercussions on the employer. For instance, should net wages diminish as a result of an increase in the rate of tax, workers may then press, successfully, for higher gross pay which would entail an additional payment by the capitalist. Conversely, if net wages rise as a result of a fall in the tax on income, workers would be less likely to seek wage increases and so the capitalist avoids having to make additional payments to workers.
Secondly, the Spring-Summer 1977 Western Socialist contained a reply to a letter. The reply stated that the division of labour will be the basis of world Socialism. However, in The German Ideology Marx wrote ". . . while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow.”
Do you agree with the Western Socialist or with Marx?
P. S. Maloney
London N13
Reply:
Your proposition about tax is fallacious because, while you say that you are accepting that “other things are equal”, in fact ycur proposition is based on the assumption that two other vital factors have also been varied.
Our case is that in reality the burden of taxation (cost of the administrative machine of capitalism) falls on the capitalist class and comes out of surplus-value. Nominally, however, the cost is met partly out of PAYE, deducted from workers’ wages.
Your proposition assumes that the government revenue from PAYE is reduced, but unless you also assume (while giving no reason) that the total cost of administration has been correspondingly reduced, the government has to make an equal increase in the amount of tax collected directly from the capitalists. Your assumption that the total outlay of the capitalist remains the same is therefore untrue.
Your argument further requires (though without saying so) that simultaneously with the reduction of PAYE, the bargaining position of the workers against the capitalists has improved. (What Marx called "the respective powers of the combatants”.) If, before the reduction of PAYE, the bargaining power of the workers enables them to maintain net pay of £x, it cannot be assumed that when PAYE is reduced by £y the workers’ bargaining power is so increased that they can now achieve net pay of £x + £y.
In view of these errors in your proposition, it is not necessary to go into any difference there may be between short- and long-term.
The statement in the Western Socialist is in reply to a critic who argues that "division of labour and private property are equally” the cause of the evils of capitalism. The reply says that in Socialism there will be free access, and "without division of labour this would hardly be possible”.
Marx distinguished between social division of labour, i.e. the existence of separate industries, and the workshop division of labour, i.e. workers being forced to get their living by doing detailed processes. (See Capital Vol. 1, “Division of Labour and Manufacture”, particularly the last paragraph in Section 4.) The latter, but not the former, is peculiar to capitalism.
The Western Socialist’s critic does not make clear whether he is referring to the latter, or both. We do not imagine that the reply meant anything other than the social division of labour. Various industries under capitalism (particularly the motor industry) have already abandoned detail work and gone over to teams producing a whole car, because it gives greater output and better quality.
Anyway, how, in Socialist society, could any worker be compelled to do deadly repetitive work against his will? Marx made that point in The German Ideology. He said it is only under capitalism that a worker has to do it "if he does not want to lose his means of livelihood”. In the well-known passage where Marx spoke of man being “a hunter in the morning, fish in the afternoon, rear cattle in the evening”, etc., he was talking about "whole” jobs not detailed division of labour (though his examples are not much related to modern conditions). Marx also recognized that to do this the individual has to take advantage of the facilities “to become accomplished in any branch he wishes”, i.e. he has to get knowledge and training—no self-appointed surgeons or airline pilots, as anarchists have sometimes claimed there will be.
Editors.
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