Tax and the wage

18 posts / 0 new
Last post
Zirkus
Offline
Joined: 4-05-12
Sep 28 2012 22:47
Tax and the wage

This might seem to be a bit of a simple question, but it would be great if someone could help me. Could there possibly be a thread where people can ask simple questions rather than creating a whole new thread for them?

Who pays tax?

I am on PAYE. I see a nominal tax on my paycheck, and then I receive an after-tax wage. Is the after-tax wage equivalent to the value of labour power? Ie. tax comes from the surplus value produced and then nominally appears as coming from a part of the wage.
What about tax on consumer goods?

Or do anarchists view tax as the state appropriating wealth back from working class wages to maintain itself?

Could someone also clarify where the idea of the social wage fits into this?
If labour power is cost of reproducing the labourer, does public health care contribute to this? Shouldn't it then follow that individual wages received can be lower because health care is already taken care of?

I am in a bit of a muddle over this. Any clarifications would be appreciated.

Railyon's picture
Railyon
Offline
Joined: 4-11-11
Sep 28 2012 23:13
Zirkus wrote:
Is the after-tax wage equivalent to the value of labour power?

[...]

Could someone also clarify where the idea of the social wage fits into this?
If labour power is cost of reproducing the labourer, does public health care contribute to this? Shouldn't it then follow that individual wages received can be lower because health care is already taken care of?

It's not that easy to establish which taxes are after all part of the value of labor power and which are not. Until yesterday I believed that after-tax wage was the value of labor power but since this value is defined as the value necessary for the reproduction of the specific labor power(s) as you say, there are things not covered by after-tax wage that are necessary for this to happen. The example of public health care is a good one. It gets a bit difficult when you look at pensions and welfare transfers - these I'd see as part of surplus value because they are not necessary for the reproduction of the active army of labor, and since surplus value is obviously surplus product (when looking at industrial production) it would make sense to see this redistribution of surplus to the reserve army as part of the social surplus and not the reproduction of labor power. Though in a different way conceivable as necessary for the reproduction of the working class as a whole, which includes the active and the reserve army. That part of the taxes which are spent on factors necessary for the reproduction of labor power is what generally counts as the social wage (and here it is pretty unimportant who pays the taxes as they are part of the value produced through exploitation either way - in Germany most stuff like pensions and health care and so on are paid 50/50 by employers and employees).

Zirkus wrote:
Or do anarchists view tax as the state appropriating wealth back from working class wages to maintain itself?

Tax as part of the surplus value is what the state runs on, basically. As such I wouldn't quite call it appropriation of wealth back from the working class because it would be more accurate to call it 'joint partner in exploitation' because the state also plays a structural role in the reproduction of capital.

jura's picture
jura
Offline
Joined: 25-07-08
Sep 29 2012 07:37

One thing to keep in mind, I guess, is that whatever the worker gets and however you adjust it, is still the price, not the value of labor power.

LBird
Offline
Joined: 21-09-10
Sep 29 2012 08:39
Zirkus wrote:
Shouldn't it then follow that individual wages received can be lower because health care is already taken care of?

I am in a bit of a muddle over this. Any clarifications would be appreciated.

If you're really asking questions about 'value', it's best to regard it operating at the social, rather than the individual, level. That is, how we are exploited collectively as a class, rather than as waged 'taxpaying' individuals.

That is the 'simple' answer.

Of course, if you want a much more detailed answer, that tries to relate these socio-economic issues to your life as an individual, then there are plenty of posters here who can give you a much more 'complex' answer, jura for example.

Personally, I prefer the simpler social explanation, because I think it is easier to explain to workers who want a political explanation for their problems in life. The more detailed economic explanation tends to confuse more than enlighten most people, in my opinion. It certainly is very unclear to me, but I put that down to my lack of interest in spending years arguing about what Capital really means. In a nutshell, I'm more interested in the details of 'power' rather than 'production'. But that's not to lessen the importance of economic analysis, just to admit my preferences.

Still, if you have the taste and stamina for a hard journey, ask away.

Railyon's picture
Railyon
Offline
Joined: 4-11-11
Sep 29 2012 10:13
jura wrote:
One thing to keep in mind, I guess, is that whatever the worker gets and however you adjust it, is still the price, not the value of labor power.

Good point. Sorry for potentially hi-jacking this, but are there any major works on Marxian value theory and empirical measurement? It's something I want to sink my teeth into (possibly also writing theses about) but I find that it's just not 'hip' in contemporary Marxian theory.

And apparently most critics of the FROP can't get their data right (ranging from correct, to stable rate, to the tendency itself being unverifiable) so I think that's a field potentially worth working on.

Stephan Krüger works a lot with empirical data but I'd like a bit of a broader introduction to the field. Just copy and pasting his opinions however is not what I'd call 'scientific' though lol!

For example, determining the value of variable capital (during a 1-year period for example) is apparently not so easy. Pre-tax wages? After-tax wages? Something in between? Judging by the proposition that some tax-funded services are required for the reproduction of labor power I'd think the latter and that's where the problems start in a way (because that would require extensive data on employment numbers and statistics on who gets what and so on).

Would also help getting Marxian value theory away from some kind of voodoo magick but that's not quite my personal concern (more like professional curiosity), apparently I move in the opposite direction of LBird there.

jura's picture
jura
Offline
Joined: 25-07-08
Sep 29 2012 10:49

Railyon, for me that's still a topic I'm just planning to get into. You have the great advantage of being fluent in both English and German! (As well as studying economics, IIRC?)

I'd recommend checking out the work of Fred Moseley (plenty of articles are available on his website; I have a partial scan of his book on the US rate of profit and can send it to you, let me now) and Anwar Shaikh (also has a website; his book co-written with Tonak, Measuring the Wealth of Nations is a classic of "empirical marxism', I guess; a pirated copy is floating around online, let me know if you can't find it). Both Moseley and Shaikh discuss their methodology to a considerable extent.

As regards the FROP and conflicting data, here's an interesting article:

Technology, Distribution and the Rate of Profit in the US Economy: Understanding the Current Crisis" (by Deepankar Basu and Ramaa Vasudevan)

Zirkus
Offline
Joined: 4-05-12
Sep 29 2012 11:02
LBird wrote:

If you're really asking questions about 'value', it's best to regard it operating at the social, rather than the individual, level. That is, how we are exploited collectively as a class, rather than as waged 'taxpaying' individuals.

Yes, I am interested in the social level, but I was also wondering how I can relate it to the individual, especially with regard to the issue of tax, because I notice this idea a lot from conservatives/liberals (from tax cuts to liberal collective insurance).
Especially as you write taxpaying as 'taxpaying', I wanted to know if this was in some way illusory and in fact comes from surplus value.

I dislike the collective insurance idea of welfare, and the social wage appeals more to me as a concept, but I would like to be able to understand this and how it relates to the wage and tax.

LBird wrote:

Of course, if you want a much more detailed answer, that tries to relate these socio-economic issues to your life as an individual, then there are plenty of posters here who can give you a much more 'complex' answer, jura for example.

Yes, please!

LBird
Offline
Joined: 21-09-10
Sep 29 2012 11:28
Railyon wrote:
Would also help getting Marxian value theory away from some kind of voodoo magick but that's not quite my personal concern (more like professional curiosity), apparently I move in the opposite direction of LBird there.

Yeah, I think you're right to say that, Railyon! I think that the roots of our 'opposing directional movements' are in our differing theoretical starting points, perhaps.

Quote:
...are there any major works on Marxian value theory and empirical measurement?

For me, 'empirical measurement' suggests the positivist scientific method of the counting of things that can be touched, that is, a quantitative approach.

I think that I prefer a more social, qualitative approach, where 'value theory' operates on a different level to that of what individuals can see and verify empirically. I'm thinking here more of approaches like 'critical realism', where not every 'real' phenomenon can be perceived 'empirically', but the existence of that phenomenon must be 'supposed' from its effects. I think 'value' inhabits this level of reality, rather than the empirical.

I can see how this view can appear as supporting 'voodoo magick', as you call it!

Margaret Archer goes into this aspect of 'critical realism' in a lot more detail, if you're interested. Essentially, this viewpoint argues that 'reality' exists at several levels, some of which are not immediately appreciable, that is, open to mere 'empirical' confirmation. They can only be confirmed by their effects, which obviously requires a social 'theory' (rather than individual sensual 'experience') to link these back to the unseen (and unseeable) 'cause'.

Perhaps there should be another thread, if you want to discuss this further, rather than derail this one further (although the issues are linked, I think).

[edit]
Archer calls this the 'causal criterion of existence', as opposed to the 'perceptual criterion of existence'.
[end edit]

Railyon's picture
Railyon
Offline
Joined: 4-11-11
Sep 29 2012 11:25
jura wrote:
Railyon, for me that's still a topic I'm just planning to get into. You have the great advantage of being fluent in both English and German! (As well as studying economics, IIRC?)

Yeah, and I generally plan to go into the statistical/empirical field so I thought, this might be somewhere I could contribute if I do my homework so to speak.

jura wrote:
I'd recommend checking out the work of Fred Moseley (plenty of articles are available on his website; I have a partial scan of his book on the US rate of profit and can send it to you, let me now) and Anwar Shaikh (also has a website; his book co-written with Tonak, Measuring the Wealth of Nations is a classic of "empirical marxism', I guess; a pirated copy is floating around online, let me know if you can't find it). Both Moseley and Shaikh discuss their methodology to a considerable extent.

As regards the FROP and conflicting data, here's an interesting article:

Technology, Distribution and the Rate of Profit in the US Economy: Understanding the Current Crisis" (by Deepankar Basu and Ramaa Vasudevan)

Thanks! I'm actually quite fond of Shaikh, and his writings on empiricism is what I'd tackle first, Moseley is someone I heard of frequently but never read anything by him.

Got the Shaikh book, and thanks for the link.

FROP opens a can of worms every time but a constant long term rise of the rate of profit totally flies in the face of the very commonsense logic of the argument so I have no idea how anyone could come to the conclusion the rate is totally stable or even rises (beyond the generally accepted wave form movement of the rate of profit)

LBird wrote:
I can see how this view can appear as supporting 'voodoo magick', as you call it!

Margaret Archer goes into this aspect of 'critical realism' in a lot more detail, if you're interested. Essentially, this viewpoint argues that 'reality' exists at several levels, some of which are not immediately appreciable, that is, open to mere 'empirical' confirmation. They can only be confirmed by their effects, which obviously requires a social 'theory' (rather than individual sensual 'experience') to link these back to the unseen (and unseeable) 'cause'.

Obviously I don't think it's voodoo magick at all, just sayin' tongue

It just seems to me that this conversion from qualitative to quantitative aspects of value is sorely neglected, and I think this mainly stems from the whole neo-Ricardian attacks in the 70s and so on and maybe the broader Marxist camp has been content to argue purely on the qualitative level of value.

Which is fine by me but I think this is kind of a step backwards (and I generally think value is also something you can quantitatively measure), and personally I think we have to be more aggressive on that front. Though of course it's open to debate what good it would do us to appear more 'respectable' in that regard as it wouldn't contribute much or anything to our goal.

LBird
Offline
Joined: 21-09-10
Sep 29 2012 11:34
Railyon wrote:
Which is fine by me but I think this is kind of a step backwards (and I generally think value is also something you can quantitatively measure), and personally I think we have to be more aggressive on that front. Though of course it's open to debate what good it would do us to appear more 'respectable' in that regard as it wouldn't contribute much or anything to our goal.

I'm not so sure about the 'quantitative' measurement of 'value'. I think it's far more a 'qualitative' phenomenon, at the 'social' level, rather than the 'physical'.

Still, we need to explore both avenues, so good luck in your 'aggressive' researches!

Railyon's picture
Railyon
Offline
Joined: 4-11-11
Sep 29 2012 11:47

I kind of get the feeling you're making fun of me here.

I mean, value as defined by the man himself as socially necessary labor time must be somehow measurable because time itself can be measured. I think it's more a question of how one does that. In that regard I'd agree with Krüger that such a measurement is only possible post festum but how exactly, well that's the big question isn't it?

LBird
Offline
Joined: 21-09-10
Sep 29 2012 11:55
Railyon wrote:
...how exactly, well that's the big question isn't it?

Perhaps 'why' exactly, is actually the big question?

Railyon wrote:
I kind of get the feeling you're making fun of me here.

Not at all, mate! These are interesting philosophical questions, and I, for one, certainly don't pretend to know the answer. Once again, good luck with your theory and method.

Railyon's picture
Railyon
Offline
Joined: 4-11-11
Sep 29 2012 12:08
LBird wrote:
Railyon wrote:
...how exactly, well that's the big question isn't it?

Perhaps 'why' exactly, is actually the big question?

Well yes actually... certainly such a more empirically grounded conception won't help much among the 'scientific community' I guess (Marxism as such is widely discredited, I make myself no illusions there) and it also won't 'help the cause' in any way.

So I guess the best reason for this would be a personal motivation to try and contribute something 'fresh' to the theoretical body. I'm not even sure Karl would give me bad looks for doing that. tongue

I think Capital Vol 3 is a good example of how one would try to quantify value (the transformation of value into prices of production). I don't think Karl made much of a mistake trying to make that move.

Even in Vol 1 Karl was measuring value in pound sterling. But that raises the question of the existence of a money commodity...

Steven.'s picture
Steven.
Offline
Joined: 27-06-06
Oct 1 2012 11:23

First point, the original poster is asking a question. Please do not derail the thread - if you would like to discuss other things please start a new thread.

Now, going back to the original post, as has been pointed out, things like the labour theory of value are not designed for looking at wages of an individual, so much as looking at/critiquing capitalist society as a whole.

That said, I could butcher Marx a little bit and try to offer my take.

Workers in most countries receive their wages essentially in two separate bundles: their salary from their employer, and the social wage from the state.

So you could say that for one worker, her combined salary plus social wage elements is equivalent to the price of her labour power (which relates to the value of this labour power in the same way as prices/value generally).

So yes things like public health care are part of the social wage, and then this does mean that individual wages from employers can be lower as a result - as the employee does not have to pay for private healthcare out of their own money.

So, in the Soviet Union, for example, the social wage was a very large part of workers' total income, and their actual pay from their employers was consequently very low in comparison.

What are you asking with regard to consumer taxes specifically?

In general, I would say that taxes are the state's way of paying for itself: and the nature/scale of taxation, as well as how the money is spent depends on a combination of the balance of class forces and the economic situation at the time. So if the working class is strong and well-organised, it will be able to force the burden of taxation more onto the rich and business. And similarly it will pressure state spending to be on the social wage rather than on things like defence, subsidies for the rich, etc.

Railyon's picture
Railyon
Offline
Joined: 4-11-11
Oct 1 2012 13:44
Steven. wrote:
What are you asking with regard to consumer taxes specifically?

I took that as meaning that if the state puts a new tax on a specific type of commodities (consumer goods?), do the new (presumably higher) prices mean they lower the value of labor power because one can buy less with a given wage, or are the new taxes a deduction from surplus value.

I think that's not an easy question as it could turn out to be either of the two depending on how wages adapt to the new price level. Also depends on whether one counts consumer goods as part of the value of labor power but I think it'd be part of the "historical and moral element" of such. So we're back to "depends".

If the new consumer taxes were spent on the social wage, they could also offset each other.

Zirkus
Offline
Joined: 4-05-12
Oct 14 2012 02:15

Thanks, Steven. Yes, that was the kind of adaptation from Marx's analysis to the concerns of the individual I was looking for.

Yes, Railyon, that was what I meant. Depends, OK.

Generally, what position do anti-state communists take on taxes?
I assume most people here don't support liberal progressive taxation ideology, Robin Hood tax etc.

Can anyone recommend any further reading that might help me understand this better?

Chilli Sauce's picture
Chilli Sauce
Offline
Joined: 5-10-07
Oct 14 2012 10:32

Zirkus, for what it's worth, I don't think most anarchists are generally too concerned with tax policy, per se, or give too much thought to taxes in general. I'd say our main concern from the state comes from its inherent aspects of social control, protection of private property, use of force to defend capital, etc.

While we rightfully struggle to demand services off of the state, I don't think we were too concerned with how the state pays for it. Or, in other words, we think what we get from the state and how the state pays for it are consequences of the class struggle. In the short term, class struggle can and should combat social inequality which, while inevitable under capitalism, can be shrunk depending on, as Steven says, the balance of class forces.

So I think you'd be right that we don't support progressive taxation ideology, but that we believe that one result of an organised and combative working class will be a higher level of services from the state with a higher tax burden on corporations and the wealthy.

Steven.'s picture
Steven.
Offline
Joined: 27-06-06
Oct 14 2012 14:52

Yeah, chilli is right. We shouldn't take any position on taxation as such: we can oppose taxes which hurt the working class disproportionately, such as VAT, Council tax or a very good example would be the UK poll tax, but supporting alternate taxation arrangements is not consistent with a communist/anarchist point of view.

What is consistent is for us to generally work to increase the strength and confidence of the working class: and if as a class we get stronger and better organised then our struggles will be able to defend/improve our wages and social wages, so the state will be forced to get money from elsewhere. This could be from businesses or the rich, or even by invading another country to plunder it for resources (some people have suggested that German Nazism's turn to expansionism was necessary to buy off German working class unrest. There is an article on libcom about that somewhere but can't find it right now)