Opinion Sur
In a context of extreme concentration of wealth, it is indispensable to levy the wealthiest and those with highest incomes to reduce the opprobrious inequality and finance the eradication of poverty, provide for humanity’s wellbeing and caring for the environment. These taxes are resisted by large part of those who should pay them, but as the consequences of not collecting them are concealed, harmed sectors are also manipulated to support their victimizers.
Wealth and income taxes levy very different things. Patrimony of both corporations and people is the wealth they have. It could have been achieved in one year, or in longer periods, or even through corporate or family inheritance. Thus, patrimony is formed by a stock or groups of accumulated assets. Instead, incomes are not a stock of assets but rather a flow of resources, some are rents from patrimony and others are compensations obtained through different types of work. It is worth to keep these important differences in mind: one thing is to tax a stock of assets (wealth or patrimony) and another a flow of resources (income), flow which in turn can be differentiated in rents produced by accumulated wealth and compensations for work done.
Much is concealed regarding wealth and income taxes. Few know these issues and many ignore them.
Before beginning, it is important to highlight that we focus on taxing large patrimonies and highest incomes. These tax spaces will contribute to solving the stalemate generated by the concentrating process; we do not advocate for increasing taxes on middle and popular sectors. It is fundamental to differentiate large taxpayers that refuse to honor their responsibility from the rest of the population that bears the burden of regressive taxes.
Formation of large patrimonies
Social and economic history, hundreds of contemporary research, and countless of allegations show that large part of great patrimonies were obtained by appropriation of the wealth generated by others. In truth, no one can accumulate such quantity of assets just with his/her own effort. Soon, we will try to explain how they managed that but from the start it is worth noticing that, based on their power and the complicity of some sectors of the judiciary and the own officials responsible for regulating their actions, concentrated groups secured their impunity by concealing the appropriation modalities they used. Thus, once their patrimonies are consolidated, the powerful immediately make sure that those patrimonies become untouchable.
In the beginning, appropriations were made openly through military conquests. Further down and until today, though repression and silencing of the subdued are maintained, other more subtle conquer procedures appeared.
As concentration of wealth accelerated, the powerful used all their appropriation power in various ways. To begin with, by acquiring competitors and every new promissory venture, thus reinforcing even more their oligopolistic or monopolistic position and they keep on concentrating most of the wealth generated by society, not them. Those who resist being absorbed or integrated, are cornered up within subordinated spaces or are forced to go on bankruptcy. Therefore, the more and more powerful steadily clear the way to a concentration believed to be endless. The consequences of this process have been and are still terrible for humanity and the planet.
We need to add that concentrated capital operates by leading value chains, that is, it favors productive fabrics by squeezing out their middle suppliers, which in turn do the same with the smaller ventures they subcontract. Thus, a cascade of appropriations is established, one that punishes workers and weakest participants of the productive process. At the same time, oligopolistic enterprises expropriate incomes from consumers after imposing high prices for the products they offer due to the lack of competitors.
Greed does not stop at this level. Concentrated groups evade and elude taxes, that is, apart from appropriating the resources generated by other actors, they skimp their tax responsibility. With that, on the one side, they underfund the State, making impossible for it to provide all the social and productive infrastructure that the already punished society needs. On the other side, they flight abroad undeclared incomes, thus depleting national resources for funding investments.
This financial asphyxia of the State makes it impossible to use genuine resources to cover pressing social needs and assistance for the popular economy. This generates great pressure on public accounts (income less than public spending) producing fiscal deficit. If the State were controlled by neoliberal governments, far from trying to dismantle the appropriating engines, they would consolidate the concentrating trajectory. Among other measures, they impose harsh restrictions on social public spending and drive the country towards situations of sovereign and corporate over-indebtedness, eliminate regulations over capital flow thus facilitating the looting of resources through leonine speculative operations, open the country to a torrent of imports that sweeps away national production thus augmenting the external restriction (currency shortage for buying social equipment and inputs as well as essential products). This country project dramatically increases poverty and unemployment, fractures and selfishness, belittlement of social fabric and environmental protection. Its core idea and purpose is concentrating wealth and decisional power.
Differentiating high incomes
With wealth highly concentrated, a huge flow of income derives from those patrimonies which reinforce the concentrating process. This flow includes corporate dividends that each concentrated group has, land leasing, rental of real estate, financial investments, among many others. In almost every country, there already exist income tax but, as said before, every law has its loopholes, thus tax evasion and elusion prevail. We know who are the largest evaders and the mechanisms they use for materializing such criminal acts. The problem is that with their power, they corrupt the auditing of the larceny they commit and are able to impose tax norms that favor them in minimizing the amount of paid taxes. Once more, they turn legal what is illegitimate, substantial drainages that represent a looting they are trying to conceal.
At the same time, the tax structure in subdued countries is highly regressive. Instead of paying more those who have more, taxes on consumption are imposed as well as others where the rich and poor pay the same; outrageous but real. There is no lack of declarations in favor of transforming tax structures to make them more progressive and, however, few advances have been made in this field.
Something similar occurs with the structure of public spending. There are items of public investment that favor affluent sectors in terms of infrastructure works such as roads, irrigation, fire and flood protection, access to ports, among many others. It is not wrong to provide such support but if those who favor from them have resources to cover the expenses, it is indispensable to apply fully the mechanism of contributions for improvements. The State does the investment and those who can assume the cost, pay them.
Tax justice to help dismantle inequalities
In a concentrated context based on power abuses, illegal or illegitimate maneuvers, where appropriation mechanisms are concealed and public opinion is manipulated, it is not easy to establish taxes on large patrimonies and eliminate tax elusion and evasion that practice those who obtain pretty large incomes. What is at stake is equality, justice, and the support of large population majorities.
We need to tackle this enormous challenge that demands actions in every front for the countries, always considering the singularities of each situation and moment. However, a common denominator, that is a necessary though not sufficient condition to build another course and way of functioning, is to make appropriators pay for what they have done, without resorting to violence whatsoever but with democratic assertiveness. This is part of the critical process of liberating captured democracies from appropriators. Something possible if we are able to form powerful social coalitions united in their diversity and sustained with a permanent advancement in clarification and social organization.
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