We need to expand our definition of taxes
Given that 40% of global revenues are controlled by just 500 corporations and all major industries are oligopolies, why is it that we hear so little from the mainstream “left” about the obscene spread between prices and wages? This spread, often referred to as “profit”, is at record highs and the mega-corporations maintain it without fear of such quaint formalities as competition.
The excess of price over wage is a tax on consumers in exactly the same way as is government taxation. Something’s very wrong when our discourse focuses solely on government taxation and ignores the far higher and 100% regressive nature of taxation levied by these “private” concentrations of power.
Higher corporate income taxes aren’t necessarily the best answer either since the higher taxes can quite easily be passed on to the consumer through higher prices. The non-radical solution is to regulate the allowable profit margins of oligarchic firms in the exact same manner as public utilities. In my mind a far better case can be made for direct public management, but simple regulation would be a tremendous advance over today’s mafia-like system of power.
The benefits to the global economy would be at least two-fold. First, the average worker / consumer would see an immediate positive increment in living standards as “taxes” declined. And, second, the system as a whole would become more stable since a regime of high profits requires massive investment bubbles to sustain itself. Without such bubbles, profits cannot be realized. A regime with higher wages and lower profits requires far less investment spending – a key insight of Keynes that’s been almost totally forgotten.
Why is it we hear so little from “left of center” political parties or mainstream “left” economists about this “private” taxation? The answer’s pretty self evident, isn’t it? It’s one big party!