Sunday, 14 September 2014

How radical is the CLIPH-rate tax?

My tax system proposals are in many ways very radical. However, they may not be radical in the way that everyone would think of the term.

The proposal to calculate tax (or for some a subsidy) taking account of the number of hours that people have worked (or been excused from work) in their lifetime is a significant break from previous ways of calculating taxation. In this sense, hourly averaging is a radically new proposal.

The CLIPH-rate tax is also radical in the way it would change the economy and the distribution of resources therein. Everyone would effectively become working class, since all would need hour credits from working in one form or another. The difference in income between the highest and lowest earners would be radically reduced.

Of course differences in wealth would remain, since some would spend all their income while others would save. Nevertheless, the differences would be much less marked than they are in any other capital-based economic system.

However, radicalism can also means something further which does not apply to the CLIPH-rate tax. This is the idea that society should be altered and reimagined through the process of revolution or class warfare.

My tax proposals pursue equality through a continual redistribution of income from the fortunate to the less fortunate rather than any kind of revolution or change in social or human nature. People would still pursue their interests in a society with a market and almost all of life would work as it does not.

The CLIPH-rate tax proposal is not radical in this latter sense of the term, and some may see this as a bad thing. Some may simply want society to be totally different than it is and blame capitalism and free markets for the problems they perceive with current societies. The CLIPH-rate tax offers nothing to such radicals.

However, the CLIPH-rate tax does offer a challenge to those who defend the status quo; while the other radical plans may appear utopian the CLIPH-rate tax does not require the leap into the dark that revolutionary radicals propose. To those who believe in capitalism and markets, the challenge is to say why can’t there be radically more redistribution, given that it is possible within a capitalist economy?

(Photo Credit: Flickr Creative Commons/Ed Gaillard. Occupy Wall Street marched into Lower Manhattan on September 17)

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