Tuesday, January 09, 2007

There's Only One Taxpayer

Ever been tempted to support redistributive taxation? The kind where the rich are taxed at a higher rate than the poor, because they can afford to pay for social programs while the poor cannot? It does seem like a just way of attaining equality, you know, 'from those according to ability to those according to need'. An easy way to alleviate poverty, you might think.

But this standard socialist boilerplate is, in action, one of the most repressive tools that your government has ever concocted, aside from physical brutality. See, the way the rich get rich is of course by profit. Profit means earning more than you spend, ie. a margin between cost of the good sold and the price that it is sold for. So if a loaf of bread costs 50 cents to make, and it's sold for a dollar, the baker earns 50 cents, right? This is a simple concept. The rich capitalist understands this concept, and has long realized that the value of his/her labour is in that profit margin. However, sometimes costs go up. So if the capitalist wants to still earn 50 cents, s/he will raise the price of bread to $1.25 if the cost of making bread rises to 75 cents. Still a simple concept, no?

Ever ask yourself if taxation is considered to be an expense by the capitalist? I mean, there are more direct expenses, like raw materials, labour, transportation, marketing, etc., but truly, the capitalist knows that taxation is built into the cost of manufacturing as well. So if the increase in taxes amounts to 25 cents per loaf of bread, then this cost is always considered, and subsequently the price of bread for consumers increases in lock-step.

So while that 25 cents of taxation might go towards some social program that on one hand enriches the poor in some way, those who are poor still spend an extra 25 cents per loaf of bread. So who is paying for the social programs then? Certainly rich folks need bread too, but the poor need it even more desperately, and have less disposable income for other things after buying the bread.

Besides, that 25 cents in social programming ultimately doesn't all end up as a total benefit to the poor. Administrators (Bureaucrats) of social programs need to get paid, often handsomely, and so do the social workers further down the line (I know, they're underpaid, right?). So let's say for every 25 cents extra a poor person spends on bread, s/he receives 10 cents worth of social programming. Meanwhile, the rich are unaffected, still earning 50 cents a loaf.

That said, do you really think that the government isn't aware of this simple economic condition? Those bureaucrats who campaign on promises to erradicate poverty are actually intentionally keeping poor people poor, and the only ones who actually get richer are the bureaucrats. Who, as far as I'm concerned, could do a better service to society by learning how to bake, so that they can teach poor folks to do the same. But the bureaucrat understands that s/he needs the poor to believe that bureaucracy will save them, in order to perpetuate their parasitic lifestyle. The poor folks might just see a benefit to them of 10 cents, not understanding that it came from their own pocket in the first place, and this perception is supported and manufactured by the liars who campaign on promises of salvation. It's actually salvation given with one hand, while the other hand is picking their pocket.

Rich folks are always going to be rich, and generally it's their type-A personality and high productivity that gets them there. They could be taxed at 75% of their incomes, and yet they'd still be rich, and poor folks would still be poor, if not actually poorer.

2 comments:

cs said...

so what would you suggest? instead of handouts, teach poor people how to fend for themselves?
there is no easy solution to the problem, just easy answers. Which is what the politicians give out all day long, just enough to keep them in office long enough to retire

Rocketman1200 said...

yeah, that's exactly what's needed. People need to learn how to be independent. My dad has said before that the only way out of poverty is education, and I agree completely. Education can take many forms, and I'd advocate skill-development-based education where students learn marketable skills. Marketable means useful. It doesn't need to be all public education either, and it doesn't need to be expensive. Apprenticeship programs are a good start, as are places like South Winnipeg Tech, JobWorks, etc.