Comparing Capitalism & ParEcon

Comparing Capitalism & ParEcon Regarding Taxes

What is the relation between economics and taxes — or, more accurately and comprehensively, how is collective consumption handled? This page compares capitalism and parecon vis a vis taxes.

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“Red White and Blue”
by Georgia O’Keeffe


“Tree in Meadow”
by Milton Avery

Introducing Capitalist
Regarding Taxes

In a capitalist economy, taxation pays for government activity which includes diverse undertakings — some in their broad conception benign and positive, such as protecting the populace from disease or maintaining a transportation system, and others in their broad design biased in diverse ways, such as protecting private property against workers’ aspirations, or directly amassing government power and wealth, for that matter. Taxes are collected from citizens according to diverse norms and methods that are different in different times and places. What is constant, however, is that these norms and the associated methods reflect the relative power of constituencies. When owners, for example, have more power, taxes on profits will be lower. When workers are weaker, taxes on wages will be higher and less progressive, if progressive at all. When workers are stronger, taxes on profits will be greater and less (and more progressive) on income.

Taxes are spent, likewise, in ways that also reflect power relations. Thus, even seemingly benign and positive projects — such as education, health care, defense, etc. — are pursued in a manner consistent with profiting the rich and powerful and avoiding any disruption of their prerogatives vis-a-vis accruing profits and vast income.







Introducing ParEcon
Regarding Taxes

In a parecon, collective consumption and investment are undertaken via participatory planning. Rather than government extracting a share of output via taxation, the population determines what kinds of expenditures it wishes to collectively undertake and the bill is charged to those who benefit. Thus, each collective consumption project is assessed within the economic operations like all others. There is cooperative negotiation of associated inputs and outputs by those producing and consuming. The apportionment of cost — the assessment of who is spending from their income for the project — occurs, likewise, as with all other production and consumption, in the planning itself.

Whether we call the above “taxation” or not doesn’t matter, and seems very unlikely. It is what accomplishes what taxes accomplish, but without class bias and without government bias in determining expenditures and also in deciding who pays the bill.

Could there be other national functions undertaken by political institutions in a society that has a parecon. Certainly. Might there even be conditions under which political institutions are permitted to act without and in advance of planning taking place (a plague strikes, say)? Sure. But the economic component — both deciding to undertake actions or to set aside productive capacity for possible emergencies, or to address them after the fact, and the apportionment of payment responsibilities, will all still occur, in the end, via the planning process and thus self management.

Evaluating Capitalist Regarding Taxes

Capitalist taxes are used to serve owner’s interest first, coordinator’s interests second, and worker’s people’s interests third and only consistent with the former two priorities, unless workers are able to coerce better results. Taxes are collected with the same priorities, seeking to redistribute benefits from poor to rich, and certainly not, to the extent it can be avoided, the reverse.

In these ways capitalist taxes are good from the point of view of those sitting at the top of society’s hierarchies of wealth and power, but bad from the point of view of those on whose efforts such hierarchies sit.

Evaluating ParEcon Regarding Taxes

Parecon’s collective expenditures are carried out in the interest of those who seek them and pay for them, as are, presumably, associated government endeavors. Determination of payment for collective projects, like for all economic activity, is accomplished via participatory planning which properly discovers who beneift and who suffers costs and properly assigns influence in accord with extent affected.

In these ways parecon collective expenditures are positive from the point of view of all concerned, both in what is undertaken and in whose efforts permit it, any who pays the bill.

 Next Entry: Comparing Regarding Insurance  

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