Is "tax the rich" demagogic?

Submitted by martin on 22 December, 2024 - Author: Martin Thomas

WORKERS LIBERTY

Pic: Alexandria Ocasio-Cortez on Printerval

The Socialist Standard of December 2024 criticises our call to "tax the rich" to mend the National Health Service and other public services.

We cited detailed proposals from Tax Justice UK (experts on such matters) for a wealth tax, increased capital gains tax, and other measures which would bring in between £52 billion and £60 billion a year. We said such taxes would not redress social inequality, but they would restore the NHS and other public services to a moderate working order.

Socialist Standard responds: "Taxing the rich to increase wages and benefits and provide better public services is fantasy politics. It’s not going to happen and, if it was tried, would precipitate a massive economic crisis". They accuse us of manipulative politics: "proposing something to attract worker support but which [we] know won’t work, in the expectation that, when it doesn’t, the disillusioned workers who fell for it will turn to us for leadership in an assault on the capitalist state".

Socialist Standard is wrong, but there is a grain of truth in its arguments.

Socialist Standard comes at such questions from a different angle from most of the left. Its publisher, SPGB (Socialist Party of Great Britain, quite different from the Socialist Party which publishes The Socialist), was one section of a 1904 split from what was then the British Marxist group, the Social Democratic Federation, in protest against the SDF's advocacy of what it called "stepping stones", partial measures, as well as full socialism.

The other section was the "De Leonite" Socialist Labour Party, whose leaders mostly joined the then-revolutionary Communist Party when it was founded after the 1917 Russian revolution. The SPGB rejected the Russian revolution as only "state capitalist" from the start, and argues that the only road is via winning elections by first gaining workers' support for full socialism with no half-measures.

They have a way to go on that – the SPGB stood two candidates in the 2024 general election, totalling 193 votes – but at times the SPGB has been quite well-known on the left. It is willing to debate with other left groups, as sadly many others are not.

But pro-worker partial measures can be won, even under capitalism. They have been won. Despite the long waiting lists, the NHS is still a great improvement on what we had before 1948. Wages are much higher, work hours shorter, schools better, than in 1904. Winning improvements is the chief way that workers organise ourselves, increase our confidence, and gain time and facilities to study and discuss beyond the scanty minimum possible when workers cannot buy books or newspapers or travel to meetings, are illiterate, are exhausted after long work hours, and have our lives dominated by a battle to feed our households each week.

Higher taxes on the well-off paid for the NHS after World War Two. Thatcher cut the top rate of income tax from 83% to 40%, increased VAT (which hits poorer people harder) from 8% to 17.5%, and sent the NHS into funding difficulties which (with some periods from relief along the way) has continued since then and sharpened since 2010.

It is possible for Tories to cut taxes and deprive public services of revenue! It is also possible for us to resist and sometimes to push back our enemies. We do not make our demand as a trick to manipulate workers into revolution. We mean exactly what we say.

Marxists made such demands before the SPGB hived off in 1904. The Communist Manifesto called for a progressive income tax. The German Social Democrats' Erfurt Programme of 1891 called for "graduated income and property tax" and "inheritance tax". When in 1921-3 taxes on business became notional in Germany because of high inflation (by the time those taxes, as distinct from workers' PAYE, were collected, inflation had reduced their real amount to almost nothing), the then-revolutionary German Communist Party demanded "taxation of real values", the state to take a proportion of firms' "real property".

However, demands like "tax the rich" were relatively rare in those revolutionary times. The nearest equivalent in the German CP's founding "Spartacus Programme" was "Confiscation of all wealth above a [certain] level".

In May 1917 Vladimir Ulyanov (Lenin) dismissed a call by a Menshevik minister in Russia's bourgeois Provisional Government for 100% taxation of profits. "Our party is much more moderate", he wrote sarcastically, demanding "control [by the workers' and soldiers' councils] over the banks and... a more just progressive tax on incomes and properties".

"It is to the advantage of the capitalists and the bureaucrats to make 'extravagant promises'," even of notionally forgoing profits for a while, because that was "diverting people’s attention away from the main thing, namely, the transfer of real control to the workers".

In June-July 1919, Mussolini's then-infant fascist movement in Italy took up, so Angelo Tasca wrote in his history, "the refrain of all demagogues, whose demagogy covers up and serves a fundamental opportunism: 'make the rich pay'." Italy's economy was in such collapse that only reorganisation under comprehensive workers' control could redress it. Not a seizure of this or that stash of cash.

As I remember, Trotsky made a similar argument in a comment on French politics in the years after 1929, but I can't trace the reference.

To raise "tax the rich" as the first demand in a revolutionary crisis is to distract and confuse. It is not entirely wrong – individual plutocrats will still have large individual stashes even after all big industry and banks have been taken into workers' control and public ownership, and we will be demanding, for example, that their palaces and mansions be seized to accommodate the homeless and ill-housed – but it should not be the first demand.

We are not in a revolutionary crisis. In today's conditions, the danger of distraction is the converse. A message that nothing can be done about the NHS short of a comprehensive working-class takeover of large-scale productive wealth would be an alibi for passivity. A demagogic alibi, even.

Even today it is important to point out that feasible tax rises will bring only partial relief (£60 billion is little more than 2% of GDP). A working class sufficiently mobilised to win that partial relief will have to be ready to use our improved organisation and confidence to go on for control and ownership of major productive wealth. Otherwise we will see our raised aspirations thwarted, our political drive stalled, our gains annulled as soon as the capitalist class can regain its balance.

Our article, to avoid being reasonably charged with demagogy, had to point that out and explain that "tax the rich" is not a cure-all. But it did. We were not demagogic or opportunist.



The SPGB has its office at 52 Clapham High St. Pic: Google Street View