Jak's View From Vancouver

Why Both Parties Deserve To Lose

Regular readers know that I am an anarchist:  I hold no truck with the phony "freedom" offered by modern electoral politics.  With that out of the way, it is probably also obvious that I am fascinated by the power games that political parties play and that therefore I follow electoral politics rather closely.  With that in mind, I want to draw your attention to a smart and clever piece in Fortune magazine by Cait Murphy entitled "Why The Republicans Deserve To Lose." 

Despite the title, Murphy constructs an argument that neither side deserves to win next week, but that the Democrats will take the prize based on anti-Bush sentiment rather than anything positive to do with Democratic policies.

"Democrats may well benefit politically from the mess in Iraq - but only by default, because the only discernible Democratic policy on the matter is to blame Bush for it. More troops? Fewer? A timetable for withdrawal? With conditions? Who knows?

On immigration, entitlement reform, military tribunals, education, the environment - the Democrats have been intellectually missing in action. (Hint: Bashing Wal-Mart  is not an economic policy and trashing Big Oil is not an environmental one.) If they take Congress in November, it will not be because they did the soul-searching Labor did in the '90s or the Republicans in the '70s. It will be because the public wants to spank Bush."

As Murphy concludes, the Democrats are going to need a lot more than anti-Bush to win in 2008.

This is a thoughtful piece that deserves to be read.

Leave My Money Alone!

I'm sure I have written before about my loathing for the spending of taxpayers' money on the arts and sports and similar hobbies.  Almost every day my opinions on this are hardened with new evidence.

This morning I listened to a locally-based nationally-known stage actress tell a CBC radio interviewer that, with the reduction of Federal (i.e. taxpayer) subsidies, Canadian theatres are being forced to rely on box office receipts.  She said this with shock and horror, and with that professional certainty that the vast majority of her white middle-class audience would agree with her disgust at this wanton neglect.   She claimed that this would stiffle creativity because theatres would be obliged to put on old shows with a guaranteed clientele. The unspoken corollary is that the ticket-buying public is too stupid or too stuck in its ways to pay for new and inventive works and so they have to be forced to pay for them through their taxes. 

Such arrogance!  It is no wonder that such "liberals" or "left wingers" (for they would certainly describe themselves in such terms) are detested by anyone who actually cares to listen and think about what they are saying.  Their solution to every damned thing is to put their hands in my pockets and to do it while telling me how much better they know what I need than I do myself!  Social conservatives and corporate marketers are no less grasping and omniscient.

Liberals, left-wingers, corporatist fascists, Trotskyites, fundamentalists -- they are all the goddam same!   Leave me and my money alone!

In the US, All Men Are Created Unequal

The gap between rich and poor in America has never been wider, and the latest figures show it is getting much worse.  New figures from the Internal Revenue Service show that income disparities grew substantially from 2002 to 2003. After adjusting for inflation, the after-tax income of the one percent of households with the highest incomes shot up in 2003 by an average of nearly $49,000 per household while the after-tax incomes of the bottom 75 percent of households fell on average.

And the corporations and the bosses have done even better. 

During this recovery period, wages and salaries as a whole have grown less than half as fast as the average growth during other post-World War II recoveries. Meanwhile, corporate profits have grown more than half as fast as in other recoveries.  Separate surveys of pay trends by Business Week and Forbes magazines both found huge increases in the compensation of chief executive officers (CEOs) in 2004. The Business Week article observed that from 2003 to 2004 “CEO raises and total pay once again dwarfed those of theaverage worker.” The Forbes report found that the CEOs of the nation’s 500 largest companies received an “aggregate 54 percent pay raise last year…. That easily outpaced 2003’s eightpercent raise.”

Capitalism is by definition designed to create inequality, and modern consumerist-capitalism merely exacerbates that built in tendency.  But rarely do we see a government encouraging this income spread as Bush as his allies do.  The Bush family slogan should be: From the many to the few.

Voluntary Taxation

Back in June 2002, well before it became a cause de jour for the conservative set, I proposed doing away with all non-voluntary taxation by replacing income and all other taxes with a consumption tax. Since Hastert's musings in his autobiography, and Rep. Linder's introduction of HR 25, both of which suggest such a system, there have been a number of commentaries on the proposal, nearly all of them negative. However, they are negative because they assume (a) that government expenditures will stay roughly the same (thus pushing the proposed sales tax percentage to extraordinary levels); and (b) they assume that the sales tax will fall on ALL consumption which they claim, correctly, would impose a significant regressive taxation on the poor and lower middle class.

For example, in a review of possible Bush second term policies, J.K. Galbraith muses on the proposal, concluding that "the whole tax burden will then fall on the middle class, on working American, and on the poor." In a more detailed analysis, the Institute on Taxation and Exconomic Policy calculates that, under HR 25, "the bottom 80 percent of taxpayers would face much higher taxes under a sales tax. Nationwide, these tax increases would average about $3,200 a year." And this is after taking into account the rebate system that HR 25 proposes to deal with regressivity.

I agree that simply replacing the current taxation revenue with an across-the-board sales tax is a proposal without hope. Luckily, that is not the solution that I proposed.

Before I recap the details of my own proposal, let me make it clear that in an anarchistic society there would be no taxation of any sort. There would, no doubt, be voluntary levies -- probably in goods and labour -- contributed by the voluntary members of various mutual aid groups to move certain projects ahead. However, this would be on an ad-hoc basis, without coercion, and would not be considered by most to be a form of taxation at all. The following proposal is designed for a transitional state between capitalism and anarchism.

This is what I wrote in 2002, and I see little need to change the basic structure proposed:

The basic principles for the tax scheme are that it should be essentially voluntary, and concerned with ensuring equal opportunities for all. Therefore, I would propose the elimination of all personal and corporate income taxes as they violate by their nature the voluntary aspect of taxation. I propose to replace the revenue with an all-inclusive sales tax on all goods and services with a few, well-defined exceptions (the figures below represent Vancouver costs of living and could be adjusted as required):

• all foods
• shelter (to $12,000/year rent or the first $200,000 of purchase)
• medical and dental services
• educational services
• financial services to $500/year

The sales tax should be a single percentage across all categories of goods and services in order to reduce accounting and bureaucratic requirements.

My tax plan would also include a 100% estate or death tax. Those who approve of giving advantages to those who have not earned them but have merely acquired them through accident of birth (closet monarchists, all of them) can insert some other percentage into their model.

Finally, I would also grant the government revenues from criminal fines, all of which would be levied (above a certain minimum) based on the criminal's net worth. The purpose of this is to end the regressive nature of the cost of criminality (the current arrangement allows, say, the same $1,000 fine on a millionaire -- for whom it means nothing and therefore no deterence -- and a welfare gasper -- for whom it may mean starvation or worse.)

That would be it for government revenues -- sales taxes, death taxes, criminal fines. The use of the sales tax for the bulk of government revenues brings a great deal of volunteerism to the matter: The exceptions provide an important and necessary break for those goods and services which can be described as the necessities of life; above that, the more I choose to buy, the more taxes I choose to pay.

On the other side of the ledger, also to the good, the simplicity of the scheme allows for huge bureaucratic savings in both administration and compliance.

It assumes that significant portions of current governmental activity have been done away with, returned to the people for their own handling. Those portions of government activity that do remain should be easily categorised into line items that can be shown to have a direct bearing on the level of the sales tax. In this way, the people are enabled to make decisions about what sections of government can be further cut to reducde the level of taxation. Conversely, any additional work to be performed by the government can be easily calculated as an addition to the sales tax. In other words, the cost of a government service will be immediately and directly calculable -- and the people can make their judgements on whether to go ahead with it on that basis. It is one thing to say that a government program costs $600 million -- an abstraction at best; it is quite another to say that program x will cause a rise in the sales tax by 1%.

In a capitalist system where the government bureaucracy acts as a nanny on so many issues, taxation of some sort is inevitable, as will be resistance to such taxation. The sales tax that I propose will allow the taxation system to operate on a voluntary basis, thus achieving considerably greater support and compliance.

Why Should I Be Forced ...

We are about half way through the Olympic Games, and already there are calls of distress that Canada is not winning many medals. And all of these calls have one thing in common: They all blame a shortage of government financial support. Apparently, according to all these pundits, Canada's athletes will be golden only if they can reach even further into my pocket and squeeze an extra dollar or two out of me.

Well, count me out!

Why should I be forced to support someone else's hobby? Why should I be forced to pay money to a trampolinist or a sabre swordsman when I'd rather spend that same money sponsoring a poet to the National Poetry Slam, or buying dinner for my honey, or getting little Johnny a new pair of shoes? I don't see anyone else paying for my hobbies, and nor would I want them to.

And just in case anyone might think this is some sort of elitist anti-sports thing, let me hasten to say that I object just as strongly to my tax dollars being forwarded to arts organizations via the Canada Council, to tax-supports for Canadian movies, to government aid for anything like this. This entire "welfare-subsidy" mentality is nothing but liberal nonsense and needs to stop!

I frankly don't see why a sport should not be self-supporting. If it is popular enough to survive, it will. However, given that for some reason it is necessary for others to aid in that support, why not set up lotteries where the proceeds are directed to specific activities. There could be an archery lottery, a 100m sprint lottery, a synchro swimming lottery, and so on. This would allow anyone who wants to support a particular program -- or who just wants a lottery to play -- the opportunity to do so.

Of course, the lottery idea will never fly with the sports organizations. And why? Because they know that very few of these sports -- or arts activities -- could market themselves well enough to make the lotteries worthwhile; that voluntary funding would not be enough. They do not have popular support, and the only way they can get funding is through a coercive taxation system that forces people to do what they don't want to do, to give money to causes they do not support.

Let the legacy of the Athens Games for Canada be that we get our money back, and also our right to choose where to spend it!

Hastert Flies Kite on Voluntary Taxation

According to the Drudge Report, Speaker Dennis Hastert has been musing in his soon-to-be-published book about eliminating income tax altogether and replacing it with a sales tax. Of course, none of this radical nonsense makes it to the Speaker's official website.

However, it is fun to ponder the Speaker of the US House of Representatives having the same idea as me

"The basic principles for the tax scheme are that it should be essentially voluntary, and concerned with ensuring equal opportunities for all. Therefore, I would propose the elimination of all personal and corporate income taxes as they violate by their nature the voluntary aspect of taxation. I propose to replace the revenue with an all-inclusive sales tax on all goods and services with a few, well-defined exceptions.

Perhaps he reads Jak's View?

Tax Breaks

Now here is a story guaranteed to conflict someone with my set of beliefs and opinions about the way the economy should be ordered. The US House of Representatives yesterday passed a measure that shuffles $155 billion of corporate taxes, reducing the overall payment by corporations by $34 billion. The US Senate has already passed a similar measure.

The net reduction is made up of a $10 billion payment to tobacco farmers, the ability of certain taxpayers to recoup about $4 billion of local and state taxes from federal taxes, a special "one time only" concession allowing multinational corporations to repatriate foreign profits while paying only 5% tax, and a host of smaller reductions.

"Most Democrats and a handful of Republicans opposed the bill, saying it went far beyond its intended goal of offsetting [internationally-declared illegal subsidies] to provide tax breaks and other largesse to a wide range of special interests while driving up the deficit. "The Republican leaders sent the word out that every lobbyist in Washington has one day to get his favorite thing in this bill. It is just unfortunate that the American people didn't get their one day to get jobs in the bill," said Rep. Charles Rangel of New York, the senior Democrat on the tax-writing Ways and Means panel."

The denouncing of an outrageous giveaway by Bush to his corporate backers is an obvious and not unreasonable reaction.

But hang on. Don't I want a smaller government which, by definition involves the reduction of taxes? Yes, I do. I have written before about how I would eliminate all personal and corporate income taxes. So I should be pleased with a $34 billion dollar reduction in the size of government, right? I would be if that were an accurate depiction of what's going on. But, as Rangel said, this measure will have the effect of "driving up the deficit" and thus leading to bigger and longer-lasting taxes in the long run. This is because the US government (all parties) is incapable (or, rather, unwilling) of figuring out how to reduce the size of government without reducing their own power. Therefore, this $34 billion giveaway will simply be replaced with further borrowing.

Moreover, I object strongly to the further enhancement of the corporation over the individual. If the US government has $34 billion to give away, give it to the people! Let us get to the point where perosnal income taxes have been reduced to zero before the corporations get another break.

Taxing Times

It's that time of year again -- taxes are due. For many people -- those, apparently, who are happy to have paid too much tax to the government over the year in a kind of forced savings routine -- this is a time to look forward to refund checks and the additional consumerism they can create. For those like me who discover that -- yet again -- they just haven't paid enough on each paycheck, it is time to dig even deeper into one's pockets. However, for some, a band of dedicated crazies, this time of year is the season of the anti-Christ.

In ReasonOnline this month, Brian Doherty has an interesting piece about the folks of "We The People Foundation for Constitutional Education" who continue to believe that the US government simply has no right to demand of them payment of income taxes.

Americans have been protesting and avoiding taxes since before the U.S. officially existed. We are a nation born of tax protests. This tradition feeds the attitude that unites the serious, almost obsessed crowd here: the belief that they are the true patriots,staunch constitutionalists fiercely dedicated to the ideals that make America great. A radical transvaluation of values is going on right here in Crystal City. Far from being the very foundation of solid citizenry, acceding to the federal personal income tax is, among this crowd, an act of treason against what defines America: its Constitution and its "true laws" ...

The movement against the income tax has lately adopted one of the tropes that define an on-the-rise minority in modern America: Its members want to be called what they call themselves -- the "tax honesty" movement -- and not be slapped with the pejoratives that most people have known them by (if aware of them at all).

As Doherry points out these "cranks" have lost every single battle in every single court challenge they have laid against the government's income tax.

Never has any court anywhere -- much less the IRS -- accepted as valid any of the many arguments the movement offers for how and why there is no legal obligation for individuals to pay federal income tax. In fact, courts will fine you up to $25,000 for even raising them, insisting such arguments have been rejected so often by so many courts at so many levels that they are patently frivolous and time-wasting.

Of course, it doesn't help their credibility with me when they allow their conference to be lectured to by Mel Gibson's anti-semitic and Holocaust-denier father, Hutton Gibson, who gives "a rousing speech on the need to fight the New World Order to defend our traditional liberties and is cheered heartily. Many of these folks are not just "cranks" about the income tax.

In his role as general MC for the conference, [Bob] Schulz is clearly wearied by the obsessions of some of his audience members -- for example, the notion that hiring an attorney means abandoning personal sovereignty before the law, or that having a yellow-fringed flag in a room means you are under martial law. But he is generally polite about it, if in a pained way.

None of this would be an issue if we adopted the Jak King Voluntary Tax plan. This is the way I laid it out in June 2002:

Within a broader set of thoughts regarding movement toward a reduction in government, I have been sketching out my ideas for an altered tax structure. I thought I'd lay them out here in the hope that a debate is generated that will allow me to sharpen and focus my own thoughts.

[Note, although I am an anti-statist anarchist, I am also a pragmatist: I think there is little point in laying out idealistic end games without having some method of getting from here to there. The following ideas are a way of moving along that path.]

The basic principles for the tax scheme are that it should be essentially voluntary, and concerned with ensuring equal opportunities for all. Therefore, I would propose the elimination of all personal and corporate income taxes as they violate by their nature the voluntary aspect of taxation. I propose to replace the revenue with an all-inclusive sales tax on all goods and services with a few, well-defined exceptions (the figures below represent Vancouver costs of living and could be adjusted as required):

-- all non-prepared foods

-- shelter (to $12,000/year rent or the first $200,000 of purchase)

-- medical and dental services

-- educational services

-- financial services to $500/year.

The sales tax should be a single percentage across all categories of goods and services in order to reduce accounting and bureaucratic requirements.

My tax plan would also include a 100% estate or death tax. Those who approve of giving advantages to those who have not earned them but have merely acquired them through accident of birth (closet monarchists, all of them) can insert some other percentage into their model.

Finally, I would also grant the government revenues from criminal fines, all of which would be levied (above a certain minimum) based on the criminal's net worth. The purpose of this is to level out the cost of criminality (the current arrangement allows, say, the same $1,000 fine on a millionaire -- for whom it means nothing and therefore no deterence -- and a welfare gasper -- for whom it may mean starvation or worse.)

That would be it for government revenues -- sales taxes, death taxes, criminal fines. The use of the sales tax for the bulk of government revenues brings a great deal of volunteerism to the matter: The exceptions provide an important and necessary break for those goods and services which can be described as the necessities of life; above that, the more I choose to buy, the more taxes I choose to pay.

On the other side of the ledger, also to the good, the simplicity of the scheme allows for huge bureaucratic savings in both administration and compliance.

I have thought about this quite a lot since I first posted it, and I'm still very keen on the basic idea.