The Coastal Post - April, 1996

Taxation And The Process Perspective Of The American System


Human beings, despite their vaunted intelligence, are astonishingly unthinking creatures. When they see something they don't like, their immediate impulse is to try to do away with the offending thing, be it a government, a tax system, or whatever.

The unfortunate thing is that these systems and organizations are usually much more powerful than the poor human. So the individual sits at his word processor and churns out articles in a futile attempt to rally the people, trying to build up his power to slay the evil organizations without concern for what might happen if he should succeed. I (foolishly, I suppose) expect better of my species.

To attempt to abolish the IRS, for example, would be striking out at a branch of the problem, not at the root. To get at the root of the problem, we must consider the most basic philosophy of what is best for our society as a whole. And in the case of a system of taxation, what is the place of that, or any, tax system within that philosophical system? In order to reach this level of philosophical enlightenment, we have to go back to the basics. One of the most basic social relationships is evidenced in the basic theory of supply and demand.

In an optimum market relationship, we are all motivated to get "utility," good stuff, money, warm and fuzzies or whatever. It can be graphically demonstrated that the greatest amount of utility to the entire society is created by the competition of a large number of social entities, each of whom is approximately equal in size.

If one entity becomes so large that they dominate the relationship, they are able to effect the system so that their benefits are increased while the benefits of the little guys are reduced. This is what happens with a monopoly, and to a lesser degree, an oligarchy. The big organizations get bigger at the expense of the little ones, because the big ones make the rules. This is the danger of unrestrained capitalism. Therefore, it is in the best interest of our society (and so to ourselves, as well) to slow down the big guys and help out the little guys.

One (and I suspect, unplanned) benefit of a progressive tax system that takes more money from the rich than it does from the poor is that it limits, to a small extent, the growth of the wealthy. If we do not limit the growth of the wealthy, as outlined above, the balance will keep tilting further and further until a very few have everything and the vast majority have their choice of being serfs or slaves.

Marxism has failed, that much is evident in the well-deserved collapse of the Soviet Union. The failure of capitalism is not so obvious. It started to become significantly imbalanced in the earlier part of this century, but was brought back into balance with the Sherman anti-trust act, high corporate and individual taxation and other legislation designed to keep the large organizations from becoming so large that their success would imperil the success of the nation.

Up until the '70s, the rich were getting richer, and the poor were getting richer also. This was due to the restraints on capitalism that we had built into our system through a progressive tax and the regulation of very large corporations through industry controls. Now, however, our capitalism is less restrained; and due to the changes in laws brought about by the power and influence of monied lobbyists, the rich are getting richer while the poor are getting poorer (and more numerous).

So, there is some good in a progressive tax, as distasteful as it may be. Is there a better method? Not that I know of, not yet, anyway. What I do know is that if you don't strike at the root of the problem, something worse may grow in its place. In Forbes' flat tax, for example, he would pay no tax at all, saving himself five or ten million each year. You and I would have to make up for that loss in governmental revenues. No wonder he wants it so badly! Then, of course, Forbes could use his new income to buy more representation. Would your representative sell out for a million dollars? I think so.

Having said that, I am led to a second point: The whole method of how things get done in this country, and the underlying reasons WHY they are done. Our governmental system is not that much different from a battleground, where various factions of society struggle for partial control so that they each get a slice according to the amount of influence they can wield, or the amount of money they can afford to spend on lobbyists. When this happens, the government is little better than an anarchistic whorehouse. It may be more civilized than a battlefield where people are killing each other and raping civilians who get in their way, but it is the same process of struggling for power that has existed from the dawn of time. The Constitution attempts to ameliorate the effects of this competition, but as we see more and more these days, that crusty scrap of parchment is a scanty defense against the powerful and the predatory.

As we approach the 21st century, I think it is high time we had an enlightened system of governmental organization. One that recognizes its role as the keeper of the basic social balance, and outside maintaining that balance, will leave us alone (which, not coincidentally, will help maintain that balance).

But how do we determine that social balance? Is there an underlying morality to social interaction and indeed to the entire universe? Is there some sort of natural law that says it is best for society as a whole when the strong are made stronger by enslaving the weak? Is there a natural law that says "we must all help one another, giving until we have nothing more to give, giving until we ourselves are dying"? I must say that there is a natural/social law of this sort. It is evident in the economic theory of supply and demand, where the greatest good for all of society is not obtained when a few powerful individuals possess everything, nor is the greatest good obtained when the majority tyrannizes the minority, stealing from the rich and spreading it among the poor.

There must be a middle ground, and we should seek to find it. Its roots, I think, may be evident in the governmental mismanagement of our own social system. For example, to accomplish some measure of social improvement, such as reducing poverty and its by-product of crime, there are two major components: resources and motivation. The current system provides so little of either that we consider abolishing welfare altogether. Not because we don't care for the poor, but because the system provides so little benefit to the society as a whole. The current system provides a warm and fuzzy feeling that helps our individual morality, but we need to do it better, if we are to meet the needs of the greater social morality.

Once we recognize that such an underlying social morality exists, and that it is manifested in the growth and balance of socioeconomic forces, places us in a precarious position. When we realize that the greatest benefit to our society overall, and to each of us as individuals in the long run, is to be achieved by developing such a balanced society, it becomes incumbent upon us all to strive for that society.

Our nation is now floundering in a morass created by the failures of its own system. If we are to make it better, to truly improve it, it will take more than throwing out one set of rascals and voting in another set. No, we must look to change the entire system. We do not want a social system which allows the rich and powerful to trample those in their way. Nor do we want a social system which hobbles those who strive to excel. We want and we need balance, a loose leash on those in the front, and provision for resources and motivational aid to help those who are in the rear. Without this combination, the class gap will increase until class warfare is a part of our everyday lives, not just an occasional news report from Oklahoma.

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