Taxation Without Representation

By Steve Halpern

Philadelphia Mayor James F. Kenny has proposed an increase in real estate taxes that will disproportionately affect working people. This tax increase comes on the heals of an onerous soda tax. The Mayor argues that these tax increases would fund a budget deficit in the public schools system that has already been cut to the tune of hundreds of millions of dollars. In my opinion, these tax increases demonstrate clearly that Mayor Kenny has a clear contempt for working people.

The media in Philadelphia and nationally have consistently refused to look at the basic facts surrounding this issue. What are those facts? We can begin by saying that the city, state, and federal governments are literally cash dumping machines, that literally dump obscene amounts of money on some of the most affluent people in the world. What are the facts?

Philadelphia has one of the most lucrative tax abatement programs in the nation. This means that while most working people in the city will see a tax increase on their homes, the owners of skyscrapers worth hundreds of millions of dollars pay no taxes for ten years.

The city put up the money for the construction of sports complexes and a huge convention center. Much of this money went towards a profit to the owners of the construction companies.

Every year the city government has a top priority to make interest payments on municipal bonds. We can assume that much of this money goes to some of the most affluent people in the region.

What has been the result of all these measures? Today Philadelphia is the poorest of the largest cities in the United States. Hundreds of thousands of residents of the city literally do not have enough food to eat.

Then, we can look at the massive amount of cash dumping carried out by the federal government. The federal government spent literally trillions of dollars in a scheme known as quantitative easing. When the banks discovered that many of their loans would not be paid back, the government reimbursed these banks with trillions of dollars. We might consider that both the democrats and republicans supported quantitative easing.

When working people loose money at the casino, we don’t expect the government to make it a top priority to return our lost money. However, when the banks loose huge amounts of money, the government works, as fast as it can, to insure the affluent will have no significant losses.

The tax system

Mayor Kenny argues that one of the reasons for this tax increase is because of the increase in the cost of education. This cost reflects the basic increase in the cost of living. What are the facts?

An issue the media rarely, if ever, reports on is the production cost of commodities. In the past few decades there has been a tremendous shift in manufacturing out of the United States. Numerous factories have relocated from this country where wages might be $10 to $20 per hour, to countries where wages are $1 to $10 per day. When this happens there is a sharp decrease in production costs.

This reflects the fact that corporations are routinely obsessed with cutting costs. When there are technological advances that make production less costly, the cost of production goes down.

So, why do prices go up when production costs of most commodities go down? The answer lies in the fact that corporations are also continually obsessed with generating a maximum profit.

What has been the result of this state of affairs? Today, the most affluent one percent of the population owns about half of all financial assets, while about 80 percent of the population owns no more than six percent.

Understanding this state of affairs we need to ask the question: Why are working people paying any taxes at all? Consider that working people routinely pay city, state, federal taxes, sales taxes, gasoline taxes, cigarette taxes, tolls on highways, as well the soda tax. Why do we pay all these taxes when one percent of the population owns half of all wealth?

We also might consider that working people are the ones who create all wealth. We make our contributions to society in the work we do every day.

So, let’s say a worker pays $100 for a commodity and there is $5 dollars in taxes on this commodity. Let’s say that the corporation that sells this commodity also pays $5 in taxes. In realty, the worker has paid $10 in taxes and the corporation has paid nothing.

Brown v. the Board of Education

In the year 1954 the Supreme Court ruled in it’s Brown v. Board of Education decision that segregation in public education is unconstitutional. What does this ruling have to do with Philadelphia?

The Philadelphia public schools system is overwhelmingly Black and Latino in composition. When we walk across the border of Philadelphia at City Line Avenue we enter the Lower Merion School District that is overwhelmingly caucasian in composition. Per student funding in Lower Merion is double of what it is in Philadelphia.

We might consider that Lower Merion is a bedroom community where most of the residents work in Philadelphia or New York. In other words, the salaries paid in Philadelphia go to the suburban communities where per student funding for education might be double of what it is in Philadelphia.

Given the Supreme Court ruling of Brown v. Board of Education, how is this possible? The Supreme Court ruling only applies to municipalities. Therefore, obscene discrimination is legal as long as it takes place outside of a municipality.

Conclusion

The facts in this blog underscore the idea that the interests of working people and capitalists are antagonistic. The government merely acts as a support committee of corporate power, and routinely dumps obscene amounts of money on the affluent.

Today there is a teachers strike in West Virginia which is one of the least affluent states in the nation. The teachers of that state are saying clearly that they will not be used as scapegoats for the crisis of capitalism.

Ultimately this is the best answer to the demands of government to increase taxes. Without the labor of working people, capitalists literally have no profits. As the standard of living continues to decline, sooner or later masses of workers will discover this fact.

When this happens, then we can talk about a significant improvement in the standard of living. This will happen, not because of increased taxation, but because we will put in place a government that declares that human needs are more important than profits.