Tax Issue a Diversion From Real Robbery of Workers

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Tax Issue a Diversion From Real Robbery of Workers
By Connie Furdeck
The People, July 13, 1991, page 3

Ever notice the newspaper articles claiming that workers must spend an increasing portion of each year working to pay taxes before they work for their own needs? One tax-reform outfit, for example, claims that "tax freedom day" for the "average American" didn't arrive until May 8 this year.

Baloney!

The truth of the matter is that taxes, directly or indirectly, are paid out of surplus value-the share of the value, contained in the products that the working class creates, that is taken by the employing, capitalist class. That is why taxes are not an issue for the working class. They are a distraction from the real issue that should concern them: the exploitation of the working class by the capitalist class.

It is very easy for workers to become fixated with the deductions printed on the stub end of their paychecks, believing that the amounts listed show the wealth that is stolen from them. The real and far greater robbery, however, lies in the huge surplus values that they create with their labor, but never see or enjoy.

HOW WORKERS ARE ROBBED

The key to understanding how the working class is robbed is to recognize that wages do not reflect the value of the workers' product. Wages are the price of workers' labor power, or ability to work. Under capitalism, workers, in order to make a living, must sell their labor power, as a commodity, on a labor market, in which the capitalists are the buyers.

Under capitalism, there are certain economic laws -- principally, the law of value -- that govern the price of commodities. Like other commodities, labor power has a definite exchange value, around which the price (wages) will tend to gravitate, despite the fluctuations of supply and demand.

Basically, the economic laws of capitalism operate such that workers, on average, receive a "living wage." There are variations for different kinds of labor power, of course -- an engineer will tend to command a higher wage than a farmworker. But on the whole, workers, when employed, receive just enough to support themselves and raise a new generation of workers.

However, the value of workers' labor power and the value of workers' product are two different things. Under capitalism, workers create much more value than they receive in the form of wages.

Typically, in an 8-hour workday, the value of the products that workers create in about the first 1-1/2 to 2 hours of work will equal their wages. For the other 6 to 6-1/2 hours, workers are creating surplus value -- value, in the form of real wealth, which goes to the capitalist class, not for working, but for "owning." That is what socialists mean when they say that the capitalist class exploits the working class.

It is out of this surplus value that the capitalists make their profits, after they pay off any other capitalists owed rent, interest, advertising fees, etc., and pay the taxes needed to support the government.

Exploitation is not something that exists only in theory. The robbery of the working class can be measured. The above illustration provides an example. The figures shown are taken from the 1987 Census of Manufacturers, conducted by the Census Bureau. According to that census, U.S. workers in 20 major manufacturing industries, produced, on average, $95,519 worth of product, per worker, in one year. The average amount of value created in one week, therefore, came to $1,837.

Yet the "gross" wage for the same set of workers that year came to only $394 a week. For the purposes of this illustration, we show what the typical "tax deductions" would be for a married worker with two children, in California. The workers' actual take-home wage was a "living wage," all right: $329.89 (and that's for workers in the "better paying" manufacturing jobs!). But note this: The total "tax burden" of $64.11 is but a tiny fraction of the $1,443 in total surplus value stolen by the capitalist class-from each worker -- in one week!

Clearly, if workers get involved in the push for "tax relief" measures, they are missing the real target that should concern them: surplus value itself. And even if another "tax relief" reform were passed, any "gain" that workers receive would not only be minor, at best; it would also be fleeting. The economic laws of the capitalist system would soon act to adjust wages accordingly, such that workers' actual take-home wages would end up about where they were before (or lower, in view of other economic factors that are lowering wage standards generally).

The same holds true if taxes are raised. The fact is that wages tend to adjust to changes in the prices of basic living expenses. That is why, for example, wages tend to be higher in Alaska, where living expenses are higher, than they are in other states where living expenses are lower.

Therefore, the taxes that are nominally paid out of workers' wages can only have a temporary effect on the actual wages workers receive. It is the capitalist class that, directly or indirectly, pays the taxes -- out of the much larger surplus value already stolen from the working class. Thus the tax issue is a capitalist issue. The idea that workers have anything to gain or lose in the debates over taxes is a deception. On consequence of accepting this deception is that many working people, including those who have been propagandized into the belief that they are members of a vast "middle class" of "overburdened taxpayers," become embroiled in tax-cutting schemes designed to benefit certain capitalist interests. In doing so, they make it more politically acceptable to cut funds for services that their working-class brothers and sisters -- the unemployed, retired, disabled, and otherwise disadvantaged workers -- depend on.

TO END EXPLOITATION

Workers should continue to battle deteriorating living standards on the economic front, by uniting with their fellow workers at the workplace, and not by becoming involved in capitalist tax debates. However, for a real solution to exploitation, workers must educate themselves as to the real nature of capitalism, and then build the appropriate organizations to bring about the necessary social change.

In order to develop the most effective weapons, they should study both Marxian economics and Daniel De Leon's basic works on unionism and working-class political action.

Studying Marx would help them become aware of several concepts: that they, as a class, produce all social wealth; that they are exploited by the capitalist class at the point of production; that their condition can only deteriorate as long as capitalism continues, and that their long-term goal must be social ownership and workers' control of the means of production and distribution. Reading De Leon not only reinforces the teachings of Marx, it gives workers a program that explains how to organize to replace capitalism: socialist industrial unionism.

Remember: The real battle facing the working class has nothing to do with taxes. The real battle is to put an end to the robbery of the working class by the capitalist class, so that workers can collectively take possession of the full value of their labor.