[Marxism] John Kerry and tax: reply to Jose

Jurriaan Bendien bendien at tomaatnet.nl
Fri Mar 26 19:53:54 MST 2004


Hi Jose,

You are right, I really am being right. I am talking about the total federal
levy on private sector incomes and wealth transfers, and I am aware that it
includes both tax and social security. But if the working class receives
less in benefits than it puts in qua social insurance, then they're paying a
tax as well. Anwar Shaikh concluded from his calculations that:

"In the United States from 1952 to 1997, the average net social wage
ratio in the United States is a mere -0.33 percent. Thus, during the
entire postwar period, United States labor paid for its own social
benefits. Indeed, in the boom years of the postwar period, from 1950
to 1972, the United States net social wage was negative, which meant
that wage and salary earners paid out more in taxes than they
received. Rather than dragging down the rest of the economy in this
interval, United States workers actually subsidized it. It is only
after the unemployment rate rises when the boom runs out in the early
1970s that the net social wage ratio turns positive. But this is
because increased numbers of the unemployed and the poor led to
increased benefit payments, while at the same time their decreased
incomes reduced the taxes they pay. This same effect also raised the
government deficit. Thus a positive net social wage became associated
with a rise in the government deficit once the growth slowdown had
begun, giving rise to the mistaken impression that the observed
correlation between the two was causal."
Anwar Shaikh, Who pays for the "welfare" in the welfare state? A
multicountry study. Social Research, Summer 2003 v70 i2 p531(21)
That is just to say that the welfare state grows
when you need it less, and when you need it more,
you can afford it less.
J.









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