Isn’t Profit a Tax on Workers?

The people of a country generate its Gross Domestic Product with the support of the nation’s infrastructure, judicial protection and public services, and a part of the overall revenue is channelled to fund the maintenance and development of the state’s capability to discharge its duties to the people. That is taxation.

The people in a company generate its turnover with the support of those in charge of the company putting in place effective systems and investment, and a part of the returns is diverted to cover what those who own/run the corporation believe are necessary to keep them doing what they do. It is their profit from the enterprise – it is in essence also a form of taxation.

Taxing people to pay for important support that would not otherwise be forthcoming – be it a deduction for the work of the government, or one for the input of corporate chiefs – makes sense, so long as the deductions are set at an optimal level.

Obviously if the people in charge are taking too much from those with whom they are meant to be working as a team, misspending the money on ill-conceived projects, or keeping large amounts for their own gratification with scant regard for those they have taken the money from, then the arrangements need to be challenged.

In the case of a country’s government, the closer we get to a democratic system of accountability, the more likely citizens can scrutinise how much is being taxed and choose through electoral contests the tax/spend options that make the most sense to them.

In the case of companies and those who control them, despite parallel arguments having been made about democratising corporate governance, most workers have no say at all how much of the revenue they generate together is taken away as profit. And if the amount taken away satisfies those with power, but leaves the company in question less viable or the workers more insecure, not much can be done under an autocratic regime.

It is ironic (though hardly surprising) then that the plutocratic elite complain incessantly about being taxed by a democratic government that citizens can freely play a part in electing, scrutinising, and removing; while at the same time they tax the workers of organisations they preside over without any form of democratic input from those workers to ensure that the proportion taken out as profit is fair and good for the business’s own future.

Of course, there’s the familiar retort that workers can move to another firm if they’re not happy with too much money taken away from them as profit for those in charge, whereas citizens cannot escape from their country and its taxes. In reality, economic conditions make all the difference. Workers, with unions’ negotiation powers curtailed and social security slashed, have little choice but stick with companies that treat them with scant regard. Wealthy citizens, by contrast, can set up a few homes abroad or hide their money off-shore, and avoid paying taxes.

But the plutocrats will no doubt point out, it’s their company, they can take out what they want as their profit, and they can’t see why anyone else should have a say about it. Just as the autocratic rulers of old used to say, it’s their country, they can take whatever they want, and they laugh at the thought that anyone else should have a say about it.

Let’s see how long the reign of corporate dictatorship lasts.

From Russia with Brexit & Trump

After the disintegration of the Soviet Union in 1991, the threat of a military attack from Russia was diminished. Many in the West were nonetheless concerned with two aspects of the successor regime. The democratic critics believed that, despite its move to multi-party elections, Russia still retained many illiberal traits in how it treated dissidents, the media, opposition leaders, and neighbouring countries such as Ukraine. The plutocratic detractors, by contrast, were mostly worried about the extent to which Russia might continue to get in the way of big businesses from the West making money there because in place of anti-capitalists, they were now facing oligarchs who also wanted to make money by all means necessary for themselves.

Putin had a choice. He could fight on both fronts, or he could flip one set of opponents and get them to inflict damage on the other. Given his illiberal nature, it is hardly surprising that he chose to woo the plutocratic-minded. It did not take him long to work out that those who would be most susceptible to his overture would be those with three core characteristics: (1) illiberal with little respect for human rights; (2) wanted money for their own ambitions; and (3) enthusiastic about promoting a brand of ‘nationalism’ that targets immigrants, refugees and Muslims, but not antagonistic towards Russia.

As to the specific individuals he would get on side, that was determined by the thorns he wanted to remove: first and foremost, the US-EU alliance that was on his back about his support of Syria, invasion of Ukraine, oppressive treatment of dissidents, and cyber intrusion against the West. To achieve that, a systemic weakening of the EU, coupled with the rampant destabilising of the US would be the priority.

Against this backdrop, moves were swiftly made on the geopolitical chessboard. People who could seriously damage the EU by promoting its disintegration and a candidate who would threaten the democratic foundation of the US if elected President (i.e., Farage, Le Pen, Trump), all came out in unison to say how reasonable Putin was, why they could all do business with him, and no one should criticise his foreign or domestic policies [Note 1].

In return, they were all helped, by one means or another, to pursue what they (and Putin) wanted. Investigators will in time tell us more about the widely suspected Russian interference in aiding the Brexit vote [Note 2], and helping Trump win the US Presidency [Note 3]. In the case of Le Pen, the chaos engendered by Brexit ironically persuaded the overwhelming majority of people in France to back the pro-EU Macron, irrespective of what Putin could do to help the Front National [Note 4].

The question is not what favour Farage or Trump would do for Putin, but how the destabilisation they have caused has already played to Russia’s advantage. The EU has to divert attention to negotiate with the UK over Brexit. A united front to challenge Russia’s oppressive stance at home and abroad is less likely with Trump’s unilateralism and the UK unsure what position it should take with its imminent departure from the EU. The US, instead of having a consistent, critical stance against the illiberal and corrupt practices of Russia, has itself come under an administration that is proudly illiberal and increasingly sued for corruption [Note 5].

The game-changing moves coming up? Special Prosecutor Mueller’s investigation, and UK’s Brexit negotiation. Either Trump continues to wreak havoc and UK goes into self-destructive ‘no deal’ mode, to Putin’s delight; or the Russian links are fully exposed, the UK reaches a sensible agreement with the EU, and Putin’s advance would at last be checked.

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Note 1: On Trump’s, Farage’s, and Le Pen’s admiration for Putin, see: http://www.france24.com/en/20161115-why-west-right-wing-admires-putin-le-pen-farage-trump

Note 2: On Brexit and Russian interference, see: http://uk.businessinsider.com/labour-mp-ben-bradshaw-suspicious-russian-interference-brexit-2017-2?r=US&IR=T

Note 3: On Trump and Russian money, see: http://uk.businessinsider.com/trump-russia-probe-follow-the-money-mueller-2017-6?r=US&IR=T

Note 4: On Le Pen and Putin: https://www.theguardian.com/world/2017/mar/24/putin-welcomes-le-pen-to-moscow-with-a-nudge-and-a-wink

Note 5: On Trump’s use of the Presidency for his own financial gains, see: https://www.theguardian.com/commentisfree/2017/jun/14/trump-ushering-kleptocracy-why-being-sued