Taxes
APA-led Class Action Lawsuit Prevails
In February, a judge ruled in favor of the plaintiffs in a class action lawsuit known as American Philosophical Association et al. v. District of Columbia.
The lawsuit was started in 2017 by the American Philosophical Association and the American Anthropological Association.
It concerned a provision of District law that gave “semipublic institutions”—such as nonprofit academic, educational, and charitable organizations—that have offices in Washington, DC a hotel and sales tax exemption, but did not give the same exemption to semipublic institutions without offices in DC.
The Superior Court of the District of Columbia ruled that the law violates the U.S Constitution’s Commerce Clause. According to a press release from attorneys involved in the case,
that Clause prohibits a state, including the District, from discriminating against out-of-state entities when they participate in its economy. Thus, the District, in favoring its own resident organizations, was found to have discriminated un-Constitutionally against such entities from other states. Not a single other state imposes a residency requirement on semipublic institutions in order to obtain a tax exemption when engaging in commerce in it.
The case will now move to determining how much in damages DC must pay, and to whom.
Further details here.
The post APA-led Class Action Lawsuit Prevails first appeared on Daily Nous.
French economy minister tells EU to raid €35 TRILLION from private savings to fund war
“35,000 billion euros lying dormant today in European bank accounts… is no longer acceptable” – Bruno le Maire, who said he was going to collapse Russian economy, now wants the money of millions of EU citizens
Bruno le Maire’s ‘rant’
Bruno le Maire, arch-centrist French president Emmanuel Macron’s economy and finance minister, said in 2022 that France and the EU was going to collapse the Russian economy. Now, with Russia’s economy outperforming both the EU and US, le Maire has decided that the EU doesn’t have enough cash reserves and that he wants to raid the bank accounts of European citizens to get access to what he says is 35 trillion euros lying ‘dormant’.
And he wants them, at least in part, to fund war-readiness.
As French observer Arnaud Bertrand has pointed out, le Maire wants to “mobilize all the savings of Europeans” by taking their savings into a ‘European savings product’ – but while le Maire says that it will be ‘voluntary’ for EU nations to enter the scheme, there is no mention of ordinary people having the same freedom of choice if their country does enter it. In a video on the topic, le Maire says:
I am at the Council of Ministers of Finance in Ghent, Belgium, and I just raised a fuss because the capital markets union is not progressing. What is the capital markets union? It’s the ability to mobilize all of Europeans’ savings – 35,000 billion euros – to finance the climate transition, fund our defence efforts, and invest in artificial intelligence.
Since things aren’t moving forward with all 27 members, I proposed that we move forward on a voluntary basis with a small number of member states to propose a European savings product in the coming months, to propose European supervision of capital markets to ensure that regulation works well, and therefore to raise several tens of billions of euros to finance our growth and prosperity.
Europe cannot economically weaken as it has been doing for several months because it does not have sufficient financial reserves. Europe cannot miss the climate turning point because it does not have sufficient financial reserves. Europe cannot miss the artificial intelligence turning point because it is unable to agree on this capital markets union and make Europeans’ savings work.
35,000 billion euros lying dormant today in European bank accounts instead of fostering Europe’s prosperity tomorrow, instead of financing artificial intelligence, instead of financing the climate transition, is no longer acceptable. That’s the gist of my rant this morning in Ghent.
Deducing, probably correctly, that ‘defence’ really means the Ukrainian military, Betrand called le Maire’s plan:
immensely ironical that mister “I’ll collapse Russia’s economy” comes back to us 2 years afterwards, telling us “Europe cannot economically weaken as it has been doing for several months”, we need to take your savings… When Russia’s economy, far from collapsing, has been growing faster than all European countries. All this in part to “fund our defense efforts”, likely a code for “send it to Ukraine”, the most corrupt country on the continent currently fighting an endless money pit war that it has no chance of winning. Pure madness.
Europe and NATO seem increasingly determined to have war, with Sweden reintroducing conscription, other countries discussing it, the UK and EU banging the drum about Russia, whitewashing Ukrainian nazis and misrepresenting military goals, and many of them seemingly ready to conscript the life savings of civilians in order to fund endless conflict.
If only the same resolve was directed toward the actions needed to stop the actual genocidal war being perpetrated by Israel on the civilians of Gaza as there is to fanning the flames of war in Europe.
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What are taxes actually for?
We need to talk about taxation. I do not think it means what you think it means.
(This piece was originally published on Patreon)
While some of us are pretty conscious of the importance of using the correct terminology when it comes to issues of social justice, race, gender and sexuality, when it comes to addressing inequality, we are still using language straight out of the neoliberal handbook.
We need to be honest about how the tax system works and what it is for. To do so isn’t radical, or even progressive. It is simply the economics of reality.
What are taxes for?
In countries whose governments issue their own currencies, taxes do not pay for federal services.
Governments like those of the US, UK, China, Australia, Canada, etc run spend & tax economies, not tax and spend. They do not need your taxes to pay for anything. You might be angered to know that, actually, your taxes are not used for anything after you pay it. Not at a federal level. Your taxes are essentially destroyed upon receipt. Taxation is the act of taking currency out of the economy. Using your taxes to pay for public services would keep that money in circulation, thus serving the very opposite of its purpose.
There are some exceptions here which are important to underline: Taxes pay for services at state and local levels, but that is only because they are themselves inadequately funded by federal governments and therefore raising taxes becomes necessary to make up the revenue shortfall. Taxes also nominally pay for spending in countries whose governments adopt foreign currencies (most EU member states, for example), or peg their gold to a foreign currency.
So why pay tax at all?
Taxes are important. Just not for the reasons that are often talked about.
Taxes exist for a number of reasons:
- To maintain the value of the currency.
- To stabilise aggregate demand.
- To manage growth and distribute wealth. and, depending on what you think government is for and who it exists to serve, ensure prosperity and equality of opportunity for their constituents.
- To discourage bad behaviours (taxation on cigarettes, for example, are designed to discourage smoking and reduce the burden on health systems) & encourage good behaviours, (like promoting sustainability through a tax on carbon and investment in renewable energy).
- It also exists to accurately cost public spending requirements: infrastructure, education, health, public safety: police, fire, ambulance, defence, intelligence etc.
As economist, Professor Randall Wray recently pointed out: Governments do not need a single dime from the wealthy to address inequality. That is not how taxes operate, or what they are for.
“Taxes on the rich might take ‘resources’ from people who have too much — in that their demand deposit account is debited,” he writes for Naked Capitalism. “But taxation does not ‘give resources’ to people who have too little.”
“Rather, government spending directed to those who ‘have too little’ is what gives the poor access to resources. (They can use their demand deposit credits to buy food, clothing and shelter, etc). They are functionally two separate entities.
“Government can spend to help the poor without taxing the rich or anyone else.”
Buying into the myth
Nonetheless, the idea that taxes pay for government spending persists as an inaccurate bipartisan consensus, one of the greatest collective myths of modern capitalism.
When you hear politicians or pundits squawking about workers’ hard-earned tax dollars paying for this or that, you can almost certainly guarantee they have no idea about how taxes work either.
Our acceptance of this lie is, to quote anthropologist David Graeber, “collectively acquiescing to our own enslavement.”
The continuation of the status-quo depends upon the public’s ignorance or blind consensus as to the true nature of banking, finance, government spending, job creation and the nature of work itself.
The very myth that the vast majority of us have settled on is the very thing preventing full and gainful employment, and guarantees a future (and a present) where the only way to buy our way out of public squalor is through rising private debt.
In his recent book, Bullshit Jobs, Graeber describes modern day capitalism as a system of ‘Managerial Feudalism’, a form of social and political control achieved through corporate bureaucracy: the proliferation of middle-managers, supervisors, administrators all employed to ‘appropriate labor through usury’, stealing wealth, resources, opportunity and power from the working and middle class and transferring ownership to the political and elite classes and the idle rich.
“Marx appears to have been right when he argued that ‘a reserve army of unemployed’ has to exist in order for capitalism to work the way it’s supposed to,” he writes.
“…we are identifying with our rulers when, in fact, we’re the one’s being ruled.”
To truly address inequality and abolish austerity politics, we must start being honest about how taxation works and what it is for.
Language is important. You can be as woke as you like about gender and racial politics, but using the wrong terminology for taxation is kryptonite for social justice. We cannot subvert the neoliberal playbook while continuing to use the very same language invented to ensure a permanent economy of inequality and austerity.
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The case against income tax
“If income tax were really important, how come those who make the most often pay the least?
Income tax doesn’t really pay for government services federally. So why do we, the 99%, even need to pay it? Isn’t it just punishing people for earning?”
Me at Renegade Inc. on the case against income tax. Click here for the full schpiel.