✨Begone, rich fu*ks!✨
Enchanting our way out of inequality... (cover your ears kids, this might feature some rough language!)
Once upon a now-and-then, some masochist brings up the subject of a wealth tax.
And, boy, is there a pile on!
If “wealth tax” is somehow a foreign term to you, I envy your sheltered life. But it’s probably fair to understand it as a way to claw back a bit of the:
Good that we’ve collectively invested in: The public education, the R&D, the infrastructure, the legal system etc. That is, all the stuff which has been build on the backs of all citizens, and subsequently syphoned off by people who had a little more money and a lot more evil1 than average; the little group of meritocracy-incarnate, who have put those public goods to use transforming the world around them into a place that would hail them as ‘heroic’ and ‘successful’, and reward them with comfort and adoration… at the expense of absolutely AS MANY PEOPLE AS IT TAKES!
Democracy that we all believe in, but get unequal access to: Because we’ve allowed democracy—to varying degrees, depending on your despondency about all this shit—to be purchased. In simple terms, we’ve allowed people with more wealth to benefit from more democracy.
If I’m honest, not everyone is on-board with that 2nd one. There’s plenty of recent calls for ‘techno-utopian’ style wealth taxes that call for a simple rebalancing of wealth so we can pay for cool things like wind farms and public transport. I’m all for this outcome, but I think it’s also a super-big-mistake to just hand-wave away the power that wealth grants.
I even wrote a whole series about it.
This is the first in a new series about taxing wealth. Honestly though, these first couple of newsletters are not really going to be much about wealth at all.
They’re about fucking fuck-fuckers who are fucking stupid. Fuck!
Sorry, that might be a bit harsh.
Let’s just say they are about ‘how some people are deliberately making up porkies to protect their unbelievable wealth’.
…And, more importantly, about some other people—sycophants who, confoundingly, don’t even benefit from the ‘existence of unbelievable wealth’ at all—are, regardless, ‘naively taking the wealthy at their word’. And, worse, these people are so invested in these not-even-beneficial-to-them lies that they internalise them. And then start making up more idiotic lies all on their ownsome; all to protect people they will never meet, never be friends with, and who will never even grace them with a single second of thought.
I’m not going to lie. I’ve totally been one of those naïve ning-nongs myself at points in my history. I’ve totally said stuff like “you earn what you’re worth” and “taxes suck”. Anyone alive in the past 40 years, living in the developed world, who claims they’ve never suffered from a some variant of that capitalism-brain-parasite is just not telling the truth. It’s really hard to break away from these ideas because they are drilled into us hourly, in nearly every interaction; with nearly every media exposure; from our friends and families and colleagues and people we respect.
“Unfortunately” in the immortal words of Morpheus “no one can be told what [this bullshit] is. You have to see it for yourself”.
The thing is, wealth is magical. Not so much in how it can shazam! people into doing honestly-fucked-up things, or even in any community empowerment it might provide. It is those functional things. But it’s also magical in the way it causes the world to operate differently around it. It’s both too cliché, and also wildly insufficient, to describe wealth as simply having a magnetism. Wealth does indeed beget more wealth, but it also does it through a portal from another universe.
If you read my last series about AI, you’ll know I’m a bit of a conspiracist; just not the tin-foil-hat/anti-vax/flat-earth type. I just question narratives pitched at us by people who stand to benefit unevenly from their adoption—for example, the Silicon Valley billionaires who want “strong regulation on AI” to prevent young upstarts from sticking their noses in the trillion-dollar AI trough!
I think we should all be a bit more suspicious. And, I’m hoping to make you, dear reader, just a little more suspicious about wealth over the next few newsletters (and you won’t even need to join a Farcebook group!).
So, in this newsletter, I want to go right back to the blackboard and explain what tax is. In the next couple, I want to talk about the types of taxes we use, and the arguments the wealthy and their sycophants like to bring up about them. And maybe I’ll open some fucker’s eyes to the portal-world that hides behind simplistic, but persuasive, assumptions about wealth.
First things first. I’ve already described what I think a wealth tax protects—public goods, and democracy. Now I think it’s only fair to explain what a wealth tax actually is.
Fortunately, there’s really just two things to understand about wealth taxes: “Wealth” and “Taxes”.
Don’t get your hopes up, the ‘wealth’ bit is going to take a bunch of newsletters. But the good news is, I’m hoping to cover the foundations of ‘taxes’ in this one!
The birth of a tax
It’s probably worth pointing out right now that my fundamental understanding of tax is possibly a bit different from yours.
When I think of ‘tax’ I don’t think of it as a “taking value” process, but rather a “making value” one. The typical framing of tax is that is it the government ‘taking’ some amount of ‘earned value’ from you: Even if you believe in the principles of taxation; even if you believe taxes are essential to the operation of society… Even if you think we should all pay MORE taxes towards said operation-of-society, chances are you still think of taxes as a contribution that the government takes from you.
The thing is, to reach that conclusion, you need to ignore the fact that governments make money. Like, literally, they are the manufacturers of money.
If you’re onto it, you probably recognise this line of thinking leads in the direction of a (heterodox) macro-economics concept called ‘Modern Monetary Theory’ (MMT). We might talk more about the possibilities and challenges of that whole thing another time, but for now I don’t want you to get distracted by it, and just want to you to think about the philosophy of taxes.
See, money wasn’t just plopped onto earth, fully-formed by Santa Claus or something.
What happened was, someone with a big stick wanted some eggs or a cow or something, so they walked up to a local farmer and said, and I’m paraphrasing a bit here:
“You have two choices:
1. I can beat you with my stick until you pass out. Then I’ll take your cow.
or…
2. I can trade you these eight little metal buttons for your cow”
At that point, the farmer would puff up their chest and say
“Those buttons are useless rubbish—I don’t want them!… At least if I take option 1, there’s a chance I can fight back and keep my cow!”
But then the big-stick-dude snorts slightly, and with a lopsided smile, adds one more point
“Oh, I forgot to mention: Either way, a bunch of my heavily-armed friends will be passing through here early next week, with a plan to recover two metal buttons from each household in town. And if the household doesn’t have them, their house will get burnt to the ground”
And, all of a sudden, those eight “useless” metal buttons are worth four habitable houses.
Thus, taxes and, by extension, currency2 are born.
Pay attention to the order those things were invented in.
Now, I’m not an idiot. I realise modern global finances involve far more complex interactions than that simple story implies. But it’s worthwhile keeping in mind what the core purpose of taxes are. It’s especially valuable to think about how money collected as tax is different from the money that you personally might spend on bread and lampshades. An entity that creates money doesn’t actually need your money; however, the usefulness—the literal value—of money is entirely determined by it being taken off you.
PSA: Don’t buy crypto kids!
It’s the first of many grand magic tricks we’re going to see behind the curtain on around wealth. This one—the turning of metal buttons into cows and houses—is just where it starts.
Don’t get me wrong; it’s a bloody good trick. Even those of us that see it still play along nicely, for mutual ease of interaction… But it is still a trick.
With all that said then, the primary goal of a government imposing taxes should be to maintain the value of money at a level that maximises its motion.
And the primary goal of citizens—and this, I should add, is a thing we’ve do progressively worse on as we prioritise transactions over interactions—is to keep the money moving between us. Because, the whole secret to understanding the magic trick is understanding the leverage that prevents four houses from being razed is worth much more than one lowly cow.
Next time… how the sausage is made.
-T
That’s not really fair. “Evil” implies a rational choice. A long-run of propaganda and confusion and fear and human-desire-to-be-loved has taken rational choice away from these people. It’s probably more accurate to describe most ‘evil’ (including the bit that still lives in me, and drives many of my own life choices) as something like a “deranged ideology”
You might not have thought much about it, but “currency” comes from the same Latin (currens) as “current”, as in ‘water current’: It literally means “to flow”… It does not mean “to sit in a bank vault or on a spreadsheet for decades”. Of course, any well-managed currency is somewhat limited in quantity (to encourage thoughtful spending); and that means sometimes it should ‘sit’ for a little while to await the right opportunity to flow. But it should never exist just to be ‘collected’.