In terms of distribution, as Marx describes, in the Programme for the First International, direct as against indirect taxation can have no fundamental effect. If consumption taxes have the effect of raising workers' cost of living, that raises the value of labour-power, and so wages, thereby, reducing profits. But, that is not the case with accumulated wealth. The old landed aristocracy funded their lavish consumption from borrowing against the value of their estates. A tax on their consumption only increased the amount they borrowed, the amount of rent they could levy being outside their control, and determined by the average industrial rate of profit. So, such taxes acted to more quickly dissipate their wealth and power, and to provide revenues for the capitalist state. Its why that state, today, opposes effective wealth taxes, which would now undermine the wealth and assets of the bourgeoisie.
Marx quotes, Steuart's work setting this out.
“Under the pure monarchy, the prince seems jealous, as it were, of growing wealth, and therefore imposes taxes upon people who are growing richer. Under the limited government they are calculated chiefly to affect those who from rich are growing poorer. Thus the monarch imposes a tax upon industry, where everyone is rated in proportion to the gain he is supposed to make by his profession. The poll-tax and taille are likewise proportioned to the supposed opulence of everyone libel to them.... In limited governments, impositions are more generally laid upon consumption.” (p 141)
Taxes were Proudhon's antidote to monopoly, and as set out, he saw a series of such antidotes being applied to resolve the “bad” side of the previous synthesis. All of it was separated from any actual analysis of real history. Had he examined Britain, for example, as Marx notes, he would have seen that, after the English bourgeoisie established a capitalist state, following the Glorious Revolution, it proceeded quickly to establish a system of taxes, pubic credit, and protective duties that allowed a more rapid accumulation of its capital. It was able to do that, even though that permanent state apparatus had to contend with a parliament still dominated by the old landed aristocracy, much as the Russian capitalist state had to deal with a tsarist political regime.
“This brief summary will suffice to give the reader a true idea of M. Proudhon’s lubrications on the police or on taxes, the balance of trade, credit, communism, and population. We defy the most indulgent criticism to treat these chapters seriously.” (p 141)
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