• Graduated income tax, rates, and the Communist Manifesto

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What’s the link between these things? First, a little background information.

Income tax rates vary from 12.5% on income of less than $14,000, to 39% on income over $70,000. That’s graduated tax: the government steals from the rich to give to the poor.

Rates (local body taxes) are a graduated tax, since they’re based on the government valuation of the property (i.e. the thieves decide how much they’re going to steal). The rates rebate scheme for low income people exaggerates this effect even more.

The link is the Communist Manifesto, written in 1848 by Marx & Engels, where they listed ten steps for the transition from a capitalist society to a communist one. Step #2 applies here: ” A heavy progressive or graduated income tax”. It’s definitely heavy, with a true tax rate of about 45%, and it’s definitely graduated.

These ten steps are a method of accomplishing the following:

We have seen above that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy. [They obviously had a different idea of what democracy was. This was just a sales pitch; the proletariat never did gain power]

The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie [e.g. steal their money with a graduated tax system], to centralize all instruments of production in the hands of the state [State Owned Enterprises, hospitals, etc, etc], i.e., of the proletariat organized as the ruling class [so a communist revolution is just a change of rulers]; and to increase the total productive forces as rapidly as possible.

Of course, in the beginning, this cannot be effected except by means of despotic [despotic: think of Helen Clark or Sue Bradford and you've got the basic picture] inroads on the rights of property [money is property; we only lease our land from the government for 999 years and they can take it off us whenever they wish*; laws like the Resource Management Act restrict what we can do with the land], and on the conditions of bourgeois production [reminds me of the umpteen regulations that employers have to comply with]; by means of measures, therefore, which appear economically insufficient and untenable [yes, Marxism is economically insufficient and untenable: it's not a good omen when an economic theory starts out with insufficient and untenable policies], but which, in the course of the movement, outstrip themselves [how can insufficient and untenable measures outstrip themselves?], necessitate further inroads upon the old social order [this isn't just an economic doctrine, it's all about changing society], and are unavoidable as a means of entirely revolutionizing the mode of production.

Marxism is alive and well today, but it has a new name: Socialism. Poison is no less lethal if you call it cordial.

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*Step #1 “Abolition of property in land and application of all rents of land to public purposes.”

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The rates rape

Would you be a little annoyed if your rates (local body taxes) rose by up to 400%? How about 650%? If so, read on.

According to central government “Rates pay for a huge range of infrastructure and services crucial to the quality of life expected by New Zealanders”. That’s a justification for state-legislated theft, and unfortunately my magic wand is out of order, so rather than halting this rape I intend to show the internal inconsistency in the way in which local bodies calculate how much they’re going to steal.

First, let’s see how rates are calculated. There’s a base tax, and on top of that there is a large portion which is calculated from the property value. Therein is the kicker: although property values do fluctuate, the overall trend is that the value of a property rises over time. So, in calculating taxes this way you’ve got guaranteed tax increases. In the process, more of your power base – money is power – is taken from you by local government.

What is the internal inconsistency in this calculation? It is this: the rates are supposedly going to pay for services that you consume. But the way the tax is calculated has meant that this year people are paying up to 650% more tax. Has their consumption of services risen by 650%? I don’t think so.

Let’s look at a concrete example. The article linked to above mentions FHM Automotive, whose rates have gone from $3189 to $24,054: that’s an icrease of just over 650%. Has the business used an extra $20,865 of services this year? If it has, the owner must have improved the business performance by about 650% and the guy is a genius. Never mind, punitive taxes will help to stifle such a stellar performance.