Marx quotes a piece of nonsense from Proudhon, which, today, could come from the mouth of Starmer or Reeves, but, unfortunately, also from many on “the Left”, who pursue a petty-bourgeois, moralistic approach to big-capital. In it, Proudhon puts forward his antidote to monopoly, as taxes, so that the proceeds could be handed to workers. The ideas of welfarism, windfall taxes, and other petty-bourgeois rubbish are all here, in Proudhon's statement.
“after striding with a jaunty step, without repenting and without halting, reaches the corner of monopoly, casts backward a melancholy glance, and, after profound reflection, assails all the objects of production with taxes, and creates a whole administrative organization, in order that all employments be given to the proletariat and paid by the men of monopoly.” (p 140)
As Marx sets out in The Critique of the Gotha Programme, his programme for the First International and so on, this notion about taxes was nonsense for several reasons. Taxes are the foundation of the capitalist state, its revenues for sustaining itself, and, thereby, for sustaining the position of the ruling-class – against the proletariat! Secondly, the state is a capitalist state, and so the idea that its going to apply taxes that damage the interests of capital, and enhance the interests of workers is utopian. Furthermore, in the form of welfarism, the other side of such taxes – benefits – represents only a social wage, as against individual wages, and so comes under the heading of distribution. But, distribution is a function of production, and so long as capitalism exists, its specific economic laws will apply, and so determine that distribution.
If combined money and social wages rise to a point where profits are squeezed, and capital is, thereby, overproduced, a crisis will arise; workers will lose their jobs, and wages will fall. As seen repeatedly, because social-democratic welfarism, ultimately, sees workers' fortunes tied to that of capital, all social-democratic governments, in such periods, not only acquiesce in falling money wages, but also actively cut the social wage too, in order to restore profits, and encourage capital accumulation. But, also, in such periods, capital itself engages in the introduction of labour-saving technology that creates a relative surplus population, and so lowers wages and the value of labour-power.
“What can we say of this genius, which, while fasting, walks about in a zigzag?? And what can we say of this walking which has no other object in view than that of destroying the bourgeois by taxes, whereas taxes are the very means of giving the bourgeois the wherewithal to preserve themselves as the ruling class?” (p 141)
Marx examines Proudhon's argument, in relation to the tax on consumption, which he claimed “was established with a view to equality, and to relieve the proletariat.” (p 141) Such a claim was even more nonsensical, because, as Adam Smith had established, in his canons of taxation, such taxes are regressive, forming a bigger proportion of the income of the less affluent. In his programme for the First International, Marx also deals with the question of such indirect taxes as against direct taxes. However, he opposes indirect taxes, there, not because of their regressive nature, but because they enable the state more easily to expand its sphere of operation, due to their hidden nature, or what in more recent times have been described as stealth taxes.
“Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisticated, and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.”
This reflects Marx's anti-state position, and insistence on the independence of and self-government of the working-class, as the means of their liberation, by the development of their own property forms in opposition to those of the bourgeoisie and its state.
“The tax on consumption has assumed its true development only since the rise of the bourgeoisie. In the hands of industrial capital, that is, of sober and economical wealth, which maintains, reproduces, and increases itself by the direct exploitation of labour, the tax on consumption was a means of exploiting the frivolous, gay, prodigal wealth of the fine lords who did nothing but consume, James Steuart clearly developed this original purpose of the tax on consumption in his Recherches des principes de l’economie politique, which he published 10 years before Adam Smith.” (p 141)
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