The Bedroom Tax IS A Tax

TV news presenters seem today to have been under instruction from Tory HQ to challenge the idea that the Bedroom Tax is a tax. But, it quite clearly IS a tax!

A tax, in this sense, is any charge levied by Government on some defined basis of assessment. The bedroom tax is clearly a charge levied by Government on people living in social housing, receiving housing benefit, who are deemed to have excess rooms. So it is a tax! Someone who does not meet those criteria will not pay the tax.

The argument put forward by the Liberal-Tories and by the news media is ridiculous. It is basically that because what is being taxed is income received by those being taxed which is itself from the State, then it cannot be a tax, because it is only the State taking back some of the money it has paid out. But, on that basis, many taxes today would have to be described as not being taxes!

For example, millions of pensioners only income is their State Pension; a payment of income from the State. So, when those pensioners pay VAT, is that not a tax as far as they are concerned then, because it is only the State taking back some of the money it has previously paid to them in pension??? If you receive State Pension, as well as maybe a company pension, or private pension, and it takes you over the Personal Allowance limit of £9,440 (as of 5^th April 2013), which is hardly a massive sum, being much less even than the Minimum Wage, then you will pay Income Tax. So, is this Income Tax not then really a tax, because it is only the State taking back some of the money it has previously paid you as State Pension.

Similarly, if you are in receipt of a company pension and receive Incapacity Benefit or ESA, then the latter counts as income, and is deducted from your annual tax allowance, which means that you may pay Income Tax on your company pension. Again is this not really an Income Tax at all, because it is only the State taking back some of the money it has previously paid you in IB or ESA?

In all these cases what is being deducted is clearly a tax. The fact that the tax is paid by someone out of an income that is itself paid by the State, is neither here nor there. In fact, every worker that works in the State Capitalist sector, like a BBC news presenter, nurse, doctor, teacher, soldier, policeman and so on, is paid their income by the State. So are none of the taxes they pay really taxes, because it is only the State claiming back some of the money it has previously paid to them out of its coffers?

On a more pedantic point, however, none of these payments are really taxes. A tax is really what is charged to enable the State to function. Those real taxes are paid by Capital out of profits, because the State is there to meet its needs. The vast majority of “taxes” today are not for that purpose. What they are is payments for services provided by the State as commodities, such as healthcare, education, social services, education and so on. They are really prices for those commodities provided by the State. Those prices are levied on the working-class as a whole, as the main consumer of these services, and paid individually nominally a taxes. In other words, payment for these services comes not out of taxes, but out of society's consumption fund, just as workers wages to cover their food, clothing, shelter etc. comes out of that fund.

The same is true of payment of benefits. Benefits are nothing more than a payment of an insurance claim. If you take out house contents insurance, and your carpet is destroyed, you claim for it against your insurance. With Social Insurance, paid by workers as a whole, they insure against the possibility of being unemployed, of being sick, and to cover their old age. All of these things could be insured against through private insurance, or via insurance organised by workers themselves via their Trades Unions or Friendly Societies. In fact, at one time they were. The fact that it is the Capitalist State, which has assigned itself the absolute right to collect these insurance premiums, and thereby have to pay out the benefits does not change the matter. Insurance is just as much a commodity as any other.

The only reason that workers actually need such insurance is because of Capitalism itself. Before Capitalism, the vast majority of the population owned their own means of production. Peasant families could provide their own food from a small piece of land, from rearing sheep, pigs and cattle on the common land, and could produce their own clothing via a spinning wheel and loom kept in every cottage. When you have the means of thereby providing for yourself, you have no need of social insurance.

But, Capitalism arises by robbing all of these millions of peasants of their own means of production, and thereby forcing them to have to work in factories for Capital. Its rather like the way the Cypriot Government is currently robbing people there of their savings, and the way the Government here is doing the same thing via inflation and low interest payments, and below inflation wages.

Compared to peasant production, Capitalism brings about a massive increase in productivity, of total production, and thereby of general living standards. But, it does so by removing the previous certainty and security that peasant producers, able to provide for themselves enjoyed. It creates massive social wealth, but at the expense of uncertainty and fear for the vast majority, and misery for a significant minority. That is why workers have to have social insurance to provide some degree of certainty, and to remove the fear that Capitalism engenders. What workers should increasingly be realising, whether it is in relation to their pensions, their healthcare, their education, and their protection against sickness and unemployment, is that although they can rely on the Capitalist State continuing to demand payment of the premium from them, like every other insurance company, it is always reluctant to pay out the benefits! Workers need to take back that responsibility for themselves, of providing their own collective social insurance, if they really want to change that situation.

The Government, of course, is keen when it suits them, to point out that it is not their money they are paying out, but the taxpayers. But, the taxpayers in their vast majority are workers. What is being paid out is our money, our social insurance premium to cover such eventualities, yet we are given no say, no control over how it is paid out when we need to claim against that insurance. If, I've only just started paying my house insurance premiums, and my carpet or my house is destroyed, I still expect to be able to claim the full amount back. If you only ever got back what you had paid in, there would be no point in taking out insurance! The whole point about insurance is that it covers everyone for the risk, on the basis that the majority will not need to claim.

If I have been unfortunate enough never to have had a job, or to be born with a disability that prevents me from working, as a member of the working-class that pays this insurance, I still have a right to claim against it! Of course, the working class needs to ensure that the payments it makes in are not being abused, but the biggest abuse is not by other workers, but by the Capitalist State itself, which uses their payments inefficiently, and builds upon them a huge bureaucratic state apparatus, used to oppress them. If workers really want to prevent that they need to take back the task of social insurance out of the hands of their enemies in the Capitalist State, and bring it back under their own ownership and control.

We have Trades Unions with experience of how to do that – TU subscriptions themselves are a basic form of social insurance for workers to cover them when they are on strike – as well as Co-operative Banks, Insurance Companies, and so on. If workers really want to wrest back control of their lives, they need to reinvigorate all of these institutions, rather than leaving control, of their lives in the hands of the Capitalist State. Otherwise they should not be surprised if that State continues to screw them over in the interests of Capital.